Financial Crime World

Mauritius: The Importance of Beneficial Ownership Disclosure

As part of the Customer Due Diligence (CDD) requirements, reporting persons in Mauritius have a legal obligation to identify and verify the beneficial owner of their customers. This is crucial for preventing money laundering (ML) and terrorism financing (TF).

The Financial Intelligence Anti-Money Laundering Act 2002 (FIAMLA) and the Financial Intelligence and Anti-Money Laundering Regulations 2018 (FIAMLR 2018) require reporting persons to take reasonable measures to identify and verify the beneficial owner. This includes:

  • Verifying the identity of individuals and legal entities
  • Identifying the ultimate beneficial owners behind complex ownership structures

Consequences of Lack of Transparency

The lack of transparency in beneficial ownership can facilitate the movement of proceeds of crime by concealing the identity of the person, the true purpose of an account or assets, and the origin of the funds or assets. This is often achieved through:

  • Complex legal arrangements
  • Jurisdictions that do not ensure a satisfactory degree of transparency on beneficial ownership

Common Techniques to Obscure Beneficial Ownership

Some common techniques used to obscure beneficial ownership include:

  • Generating complex ownership and control structures through the use of legal persons and legal arrangements
  • Using individuals and financial instruments to obscure relationships between beneficial owners and assets
  • Falsifying activities through false loans and invoices
  • Misusing naming conventions

Common structures used to conceal beneficial ownership include:

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

Reporting Person Obligations

Reporting persons in Mauritius are required to apply CDD and Enhanced Due Diligence (EDD) measures to customers and beneficial owners to effectively identify the beneficial owner and take reasonable measures to verify their identity. This includes:

  • Updating and accurate information obtained during the CDD and EDD process

Definition of a Beneficial Owner

The definition of a beneficial owner is provided in the FIAMLA, FIAMLR 2018, and the Companies Act 2001.

Consequences of Non-Compliance

Failure to keep beneficial ownership information can result in serious consequences, including:

  • Fines
  • Imprisonment

Conclusion

Beneficial ownership disclosure is essential for preventing ML and TF in Mauritius. Reporting persons must ensure that they comply with their obligations under the CDD requirements and maintain accurate and up-to-date information on beneficial ownership.