Financial Crime World

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Mauritius Takes Step towards Beneficial Ownership Transparency

In a move to combat money laundering and terrorist financing, Mauritius has emphasized the importance of beneficial ownership transparency in its financial sector.

Guidelines for Reporting Persons

The country’s Financial Intelligence Unit (FIU) has issued guidelines for reporting persons to identify and verify the identity of beneficial owners. According to FIAMLA and FIAMLR 2018 regulations, reporting persons are required to:

  • Apply customer due diligence measures to customers and beneficial owners to effectively identify the beneficial owner
  • Take reasonable measures to verify their identity
  • Update and maintain accurate information on beneficial owners

The Importance of Beneficial Ownership Transparency

The concept of beneficial ownership is crucial in preventing the misuse of legal entities and arrangements for money laundering and terrorist financing. Anonymity can be sought through complex legal arrangements and jurisdictions that do not ensure transparency on beneficial ownership, allowing criminals to:

  • Conceal their identity
  • True purpose of accounts or assets
  • Origin of funds or assets

FATF Recommendations

The Financial Action Task Force (FATF) has issued recommendations on the transparency of beneficial ownership of legal persons and legal arrangements, requiring countries to take measures to prevent the misuse of these entities for money laundering or terrorist financing.

Common Structures Used to Conceal Beneficial Ownership

In Mauritius, common structures used to conceal beneficial ownership include:

  • Trusts
  • Shell companies
  • Shelf companies
  • Bearer shares
  • Nominees

Consequences of Non-Compliance

The FIU has warned that failure to comply with beneficial ownership transparency requirements can result in severe penalties, including fines and imprisonment.

Tips for Reporting Persons

Reporting persons are advised to:

  • Take reasonable measures to identify and verify the identity of beneficial owners using relevant information or data obtained from a reliable source
  • Ensure that the information obtained is updated and accurate

Conclusion

The FIU has emphasized that beneficial ownership transparency is crucial in preventing money laundering and terrorist financing, and has called on reporting persons to comply with the regulations to ensure the integrity of the financial sector.