Financial Crime World

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Mauritius Faces High Risk of Money Laundering and Terrorist Financing

Port Louis, Mauritius - A recent report has highlighted the significant threat of money laundering (ML) and terrorist financing (TF) in Mauritius. The island nation’s unique location and international financial center status make it a prime target for criminals seeking to launder illicit funds.

Money Laundering Threats

According to the report, there have been four detected cases of suspected complicit involvement of Mauritian Trust and Company Service Providers (TCSPs) in ML. TCSPs are responsible for registering and maintaining companies, as well as serving as nominees for businesses. This raises concerns that operators may be knowingly or through deliberate negligence involved in the laundering process.

  • The report notes that Mauritius is often just one layer in the ML process, with predicate offenses committed in other jurisdictions.
  • However, the country has fully collaborated with other jurisdictions and exchanged information to combat ML.

Sectoral Vulnerability

Mauritius’ strategic location in the Southern Indian Ocean and its international financial center status make it vulnerable to both domestic and external ML threats. The country is particularly at risk from:

  • Asian and European countries involved in tax fraud and drug trafficking.
  • Eastern and southern African countries linked to proceeds generated from drug trafficking domestically.

Level of Threat

The report assesses the level of external ML threat to Mauritius as HIGH, while the internal ML threat is rated MEDIUM. The overall ML threat to the country is therefore MEDIUM-HIGH.

Recommendations

  • Closer interagency collaboration.
  • More effective training for ML investigators and prosecutors.
  • A lack of operational framework for the preservation, protection, maintenance, and realization of seized assets.

Terrorist Financing Threats

Mauritius has not experienced any terrorist acts, but it is not immune to the threat posed by terrorism and violent extremism. The report notes that:

  • Signs of radicalization and allegiance to terrorist groups have been observed in recent years.
  • Authorities have detected several cases of suspected TF, with funds being transferred abroad from Mauritius to overseas jurisdictions.

National Strategy for Combating Money Laundering and Terrorist Financing

The Mauritian government has developed a national strategy for combating ML and TF, which outlines priorities and objectives in addressing financial crime. The strategy is based on the findings of the National Risk Assessment (NRA) and the gaps identified in the AML/CTF Mutual Evaluation Report (2018).

Conclusion

The report concludes by emphasizing the importance of implementing effective controls to combat ML and TF, as well as promoting international cooperation and information sharing to disrupt criminal networks.