Insight 4 February 2020

Mauritius Regulatory Update - AML/CFT Handbook issued by the Financial Services Commission

The main points of the Anti-Money Laundering and Countering the Financing of Terrorism Handbook (the “Handbook”) issued by the Financial Services Commission (“FSC”) in January 2020.

As a continuation to our regulatory update of 31 October 2019, this briefing note outlines the main points of the Anti-Money Laundering and Countering the Financing of Terrorism Handbook (the “Handbook”) issued by the Financial Services Commission (“FSC”) in January 2020.

The Handbook has been issued to assist financial institutions [1] in complying with the changes in existing legislation and new legislations enacted during the past few years to meet the recommendations from the Eastern and Southern Africa Anti-Money Laundering Group (“ESAAMLG”).

As a member of ESAAMLG, Mauritius endorses the international standards on Combating Money Laundering and the Financing of Terrorism and Proliferation issued by the Financial Action Task Force (“FATF” [2]). The MER and FUR conducted by ESAAMLG is essentially an evaluation to assess the effectiveness of AML/CFT legal framework and Mauritius in complying with the internationally recognised 40 Recommendations of FATF. The latest consolidated assessment ratings issued by FATF in January 2020 shows a marked upgrade in the rating of Mauritius.

Salient features:

Financial institutions are now required to carry out Business Risk Assessment and Customer Risk Assessment of their clients.

Financial institutions have to appoint a Compliance Officer for the implementation and ongoing compliance with internal programmes, control and procedures with the requirements of the FIAMLA and FIAMLA Regulations 2018, including monitoring and testing.

Changes in requirements for identification and verification of legal persons, Enhanced Due Diligence (EDD) and categorisation of Politically Exposed Persons (PEPs).

Any person who contravenes these regulations shall commit an offence and shall on conviction, be liable to a fine not exceeding one million Mauritian rupees (equivalent approx. US $27,000) and imprisonment for a term not exceeding five years.

Scope:

The Handbook is a supplement to the Code on Prevention of Money Laundering and Terrorist Financing issued in 2012 by the FSC and updated in 2017 (the “Code”). The FSC is currently in the process of aligning the Code with the updated national AML/CFT legislations (in line with global requirements) and the Handbook.

When carrying out periodic reviews of a financial institution’s adherence to Mauritius AML/CFT regulatory framework, the FSC will assess a financial institution’s compliance with reference to the combined adherence to the Code, Handbook and other applicable legislations.

Any resulting regulatory action will be in function of the severity of breach.

How can Sanne assist?

Following issue of the Handbook Sanne, together with other industry representatives, are seeking clarifications from the FSC on the application of some of the guidance notes. Hence, we shall be providing regular updates in the coming weeks on how Sanne can assist you with the implementation of the new guidelines provided in the Handbook and revised Code, once issued.

[1] ‘financial institution’ also includes entities holding financial services licenses issued under section 14 of the Financial Services Act (FSA), i.e. Collective Investment Schemes, Closed End Fund, CIS Manager, Investment Advisor, etc.

[2] See https://www.fatf-gafi.org/media/fatf/documents/4th-Round-Ratings.pdf

Should you require any further information, please contact our people.

Let's talk...

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Yash Beeharee Director, Compliance & Control - Mauritius
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Varounen Goinden Director, Head of Business Development, Mauritius & India - Mauritius
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