FSC Warns Financial Institutions to Stay Vigilant Against Proliferation Financing

Port Louis, Mauritius - A Call to Action for Financial Institutions

The Financial Services Commission (FSC) has issued a stern warning to financial institutions in the country to remain vigilant against proliferation financing (PF), which poses a significant threat to global security.

Identifying and Reporting Suspicious Transactions and Customers

In a recent statement, the FSC emphasized the importance of identifying and reporting suspicious transactions and customers linked to PF. The agency highlighted that PF involves the provision or transfer of funds, goods, or services to support nuclear, biological, chemical, or missile programs, as well as other weapons of mass destruction (WMD).

Due Diligence and Screening Requirements

To combat this threat, financial institutions are required to conduct thorough due diligence on their customers, including:

• Account holders
• Signatories
• Directors
• Beneficial owners of corporate customers

This includes screening for sanctions lists and monitoring transactions for potential matches with such lists.

Implementing Robust Customer Relationship Management Systems

The FSC also emphasized the need for financial institutions to implement robust customer relationship management systems, which should include:

• Regular reviews of customer behavior and transaction patterns
• Any unusual or suspicious activity should be promptly reported to the relevant authorities

Red Flags and Sanctions Evasion Techniques

In addition, the agency stressed the importance of screening for red flags, including indications of sanctions evasion techniques such as:

• Use of aliases
• Falsified documentation
• Offshore banking

Reporting Obligations under UNSA 2019

The FSC has also reminded financial institutions of their reporting obligations under the United Nations Security Council Resolution 2019 (UNSA 2019). This includes submitting reports to the National Sanctions Secretariat and relevant supervisory authorities in cases where a match is identified with a designated person or entity.

Failure to Comply: Consequences and Penalties

Failure to comply with these requirements can result in severe penalties, including:

• Fines not exceeding MUR 5 million
• Imprisonment for up to 10 years

Preventing Proliferation Financing: A Proactive Approach

The FSC has urged financial institutions to take proactive measures to prevent PF, including:

• Conducting regular risk assessments
• Implementing enhanced measures to manage and mitigate products, services, customers, and locations that may be more prone to PF

Cooperation and Collaboration in Combating Proliferation Financing

In conclusion, the FSC has emphasized the importance of cooperation between financial institutions, regulatory bodies, and law enforcement agencies in combating proliferation financing. By working together, we can ensure a safer and more secure global financial system.

Contact Information

For further information, please contact:

Financial Services Commission FSC House, 54 Cybercity, Ebene 72201, Mauritius Tel: +230 403 7000 Fax: +230 403 7172 Email: info@fscmauritius.org Website: www.fscmauritius.org