Financial Crime World

Mauritius Faces High Risk of Money Laundering and Terrorist Financing

Introduction

A recent assessment has highlighted the significant threat posed by money laundering (ML) and terrorist financing (TF) in Mauritius. The report, conducted by international experts, identified four cases of suspected complicit involvement of Mauritian Trust and Company Service Providers (TCSPs) in ML.

Vulnerability of TCSPs

According to the assessment, TCSPs are at a higher risk of being involved in money laundering due to their role in registering and maintaining companies, as well as serving as nominees for companies. This vulnerability is further exacerbated by the fact that Mauritius is a strategic location in the Southern Indian Ocean, making it an attractive destination for international financial transactions.

Sectors Vulnerable to ML and TF

The report identified several sectors that are vulnerable to ML and TF, including:

  • Banking sector: medium-high risk
  • Securities sector: medium-high risk
  • Real estate sector: high risk
  • Jewellery sector: medium-high risk
  • Gambling sector: high risk

Recommendations for Improvement

The assessment highlighted the need for:

  • Closer interagency collaboration to combat financial crime
  • More effective training for ML investigators and prosecutors
  • Better management of seized assets
  • A reporting culture in designated non-financial businesses and professions (DNFBPs)

Terrorist Financing Risks

The report found that Mauritius faces a medium-low level of threat from terrorist financing, with most suspected cases involving funds being transferred abroad to overseas jurisdictions. The sources and channels identified for TF include:

  • Banks: medium-high risk
  • Money value transfer services: high risk
  • Physical transportation of cash and gold: high risk
  • Non-profit organizations: medium risk

Government Response

The Mauritian government has responded to these findings by launching a national strategy for combating ML and TF, which outlines priorities and objectives in addressing financial crime. The strategy aims to address the gaps identified in the country’s anti-money laundering and combating the financing of terrorism (AML/CFT) mutual evaluation report and to meet international obligations set by the Financial Action Task Force (FATF).

References

  • National Risk Assessment Report 2019
  • National AML/CFT Strategy 2019-2022