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Financial Institutions Must Stay Vigilant Against Proliferation Financing

The Financial Services Commission (FSC) has issued guidelines to ensure that financial institutions in Mauritius are equipped to detect and prevent proliferation financing (PF). PF is a serious threat to global security and stability, and the FSC’s guidelines aim to help financial institutions identify and report suspicious transactions.

Guidelines for Detecting and Preventing Proliferation Financing

According to the guidelines, financial institutions must:

• Conduct thorough screening of customers and transactions to detect potential matches with sanctions lists.
  • Screen account holders, signatories, directors, beneficial owners of corporate customers, and anyone with access to an account or exercising control over it.
  • Monitor transactions for potential matches with sanctions lists, including parties involved in the transaction, vessels and IMO numbers, bank names and codes, and free text fields.

Red Flag Indicators

The guidelines also outline several red flag indicators that may indicate PF, including:

• Customer behavior such as involvement in the supply of dual-use goods
• Complex or opaque ownership structures
• Frequent changes in directors or owners
• Transactions that are inconsistent with normal business activity

Combating Proliferation Financing

To combat PF, financial institutions must:

• Have a dedicated person or team responsible for proliferation financing
• Conduct risk assessments
• Take enhanced measures to manage and mitigate products, services, customers, and locations that may be more prone to PF

Knowing Your Customer (KYC) Procedures

The guidelines emphasize the importance of knowing your customer (KYC) procedures reflecting PF risk assessment. Financial institutions should assess clients’ geographic activity, previous ties with proliferators or high-risk jurisdictions, and participation in WMD technology/dual-use supply chains.

Reporting Obligations

Reporting obligations are also a critical aspect of combating PF. The guidelines require reporting persons to immediately report any matches with sanctions lists to the National Sanctions Secretariat (NSS) and relevant supervisory authority.

Call to Action

“We urge all financial institutions to take these guidelines seriously and implement them promptly,” said [Name], Director General of the FSC. “We must work together to prevent proliferation financing and ensure that our financial system remains secure and stable.”

For more information, please contact the FSC at [contact email or phone number].