Sanne's Rubina Toorawa joins industry experts for Edelweiss' Big Shift Interview to discuss how Mauritius addressed FATF’s concerns, the impact of its removal from the grey list and what Mauritius can offer global fund managers as an established international financial center.
The Financial Acton Task Force (FATF) is an international body that aims to enhance the integrity of the international financial system. It sets standards and promotes the implementation of legal, regulatory and operational measures. FATF continually reviews, identifies and publishes jurisdictions that it deems to have significant weaknesses in their anti-money laundering and counter-terrorist financing (AML/CFT) regimes. Jurisdictions placed under FATF’s “Increased Monitoring” list (also commonly referred to as “grey list”) have strategic deficiencies in their AML/CFT regimes but are actively working with the FATF to address those issues.
Mauritius was included in FATF’s grey list in February 2020. In order to exit the list, FATF had called on Mauritius to implement an “Action Plan” that included measures such as enhanced risk-based supervision, increased transparency on beneficial ownership and stronger enforcement actions. Mauritius made a high-level political commitment to the implementation of the action plan. Its industry ecosystem of regulators, banks, market intermediaries and service providers worked in unison for the last 20 months to implement the standards of a fully complaint jurisdiction.
Their efforts reaped rewards when in the 5th Plenary of the FATF in October 2021, it was announced that Mauritius has been re-rated and removed from the grey list and included in the “White-List”. This accomplishment has enhanced global investors’ confidence in Mauritius as a preferred and credible fund jurisdiction, especially for India-focused investments.
Mauritius IFC has evolved over the last three decades, into an attractive global investment destination and a hub for financial services excellence. While the announcement of the FATF grey listing and the EU blacklist did understandably spark cause for concerns amongst the users of MIFC, the country has adopted an open communication to all stakeholders by acknowledging certain technical deficiencies, taking public commitment to resolve all the issues within a relatively short timeframe both at an industry and political level, and regularly publishing updates on the progress made. Through this approach, we have been able to weather the storm by upholding the trust of our long-standing partners, ensuring continuity of business operations, simultaneously putting in exceptional efforts to resolve all pending issues from an FATF perspective and finally exiting the list within a commendable timeline.
Also, remarkable is the MIFC determination to continue its growth strategy and pursue its innovation track irrespective of the listing by the EU and the FATF. This is translated with
the strengthening of our economic collaboration with our main partners in 2021 through the signature of a Free Trade Agreement with China, as well as a Composite Economic Cooperation and Partnership Agreement (CEPCA) with India. Additionally, Mauritius has been an early signatory of the African Continental Free Trade Area (AFCFTA) Agreement, which brings together 54 out of the 55 African Union’s Member States. With the recovery expected in this post Covid-19 environment, the MIFC has consolidated its position as an essential node to drive global capital in the major emerging markets.
The MIFC has also been pursuing its efforts in broadening its product offerings, capturing the evolving global demands. We remain at the forefront of FinTech regulatory innovations through the recent publication of guidelines for Security Token Offerings (“STOs”), revamped regulations for peer-to peer lending as well as new regulations for crowdfunding aimed at bolstering new sources of finance for SMEs in the jurisdiction. The new Special Purpose Fund regime shall also help in expanding the targeted clientele for the Fund industry in the jurisdiction.
We remain confident that the MIFC has emerged stronger from the experience, with an even more robust regulatory & compliance environment, whilst remaining agile & business friendly, taking the jurisdiction to new heights with renewed confidence from our global partners & players.
The Mauritius IFC offers a bouquet of globally competitive financial products and services to the international investment and corporate community. Serving as a hub for financial service excellence & leveraging on its rich skill base, MIFC continues to be a jurisdiction of choice as the logical springboard into Africa & Asia, gaining momentum following the FATF de-listing as a resilient & competitive financial centre. Ultimately, Mauritius ticks all the boxes from an investor’s perspective, a cost-effective jurisdiction and a comprehensive IFC.
The aim of the Government has been to position the MIFC as a well-regulated, transparent platform, keeping pace with the ever-evolving norms and best practices introduced by standard setting multilateral organisations whilst ensuring the predictability and certainty of the business environment are preserved. In line with such policy and commitments, MIFC has adopted a number of reforms in its regulatory, legal and tax regime in the past two years. As MIFC pursues its journey as an innovative IFC, cognisant of the burgeoning fintech space and the need for a diverse toolbox of financial products and services, the IFC continues to upgrade its level of sophistication aligned to the needs of international stakeholders.
The latest FDI data confirms the MIFC’s leading position for inbound investments into India. The value propositions of the MIFC are quite unique with a combination of long-standing experience and expertise, and a reliable, credible, stable, cost-efficient environment with strong cultural, economic and political ties with India. The sheer size of the economy allows for a healthy competition with alternate jurisdictions across the globe with the MIFC remaining a key contributor.