Financial Crime World

Money Laundering and Terrorist Financing Risks in Mauritius

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A comprehensive investigation by Mauritian authorities has revealed a significant threat of money laundering (ML) and terrorist financing (TF) in the country. The findings indicate that international corrupt individuals, known as Politically Exposed Persons (PEPs), have been abusing the financial sector to invest in countries identified as highly-corrupt.

Money Laundering Risks

The investigation found that PEPs have been using Mauritius as a hub for their illicit activities, with funds being transferred from the country to overseas jurisdictions. The majority of these transactions were linked to real estate and cash-intensive businesses.

Key Findings

  • 75% of all ML cases detected in Mauritius are linked to PEPs.
  • The majority of funds laundered through Mauritius are from Africa, Asia, and Eastern Europe.
  • The most common methods used for laundering funds include:
    • Use of shell companies
    • Cash-intensive businesses
    • Real estate investments

Terrorist Financing Risks

The investigation also identified several cases of suspected terrorist financing (TF) in Mauritius. These findings indicate that funds are being transferred from the country to overseas jurisdictions, believed to be controlled by ISIS.

Key Findings

  • Authorities have detected several cases of money being transferred abroad where TF was suspected.
  • The majority of these transactions were linked to legitimate sources, with some funds also coming from family members and associates.
  • Identified channels for transferring funds include:
    • Banks
    • Mobile virtual telephone services (MVTS)
    • Physical transportation of cash or gold
    • Non-profit organizations (NPOs)

Overall Risks

The report concludes that both ML and TF risks are rated as medium-high in Mauritius. The authorities have identified several areas for improvement, including the need for more resources, better controls mechanisms, and ongoing training for law enforcement investigators.

Recommendations

To address these risks, the Mauritian government has launched a national strategy for combating money laundering and the financing of terrorism and proliferation (2019-2022). This strategy outlines priorities and objectives to address financial crime and meet international obligations set by the Financial Action Task Force (FATF).

The report recommends several measures to improve the country’s ability to combat ML and TF, including:

  • Implementing controls mechanisms with new legislation on NPOs
  • Providing more resources, including human and technical resources
  • Setting up a sophisticated cell focusing on TF-related matters at law enforcement agencies
  • Conducting ongoing trainings for law enforcement investigators, particularly in the area of terrorist financing

The full report can be accessed on the website of the Mauritian Financial Intelligence Unit (FIU).