Mauritius further strengthens its anti-money laundering framework
The Parliament of Mauritius has recently enacted the Anti-Money Laundering and Combating of the Financing of Terrorism And Proliferation (Miscellaneous Provisions) Act 2019 (Act) which came into force on 29 May 2019. The objective of the Act is to amend various enactments (including the Companies Act 2001, the Banking Act 2004, the Financial Intelligence and Anti-Money Laundering Act 2002 (FIAMLA) and the Financial Services Act 2007 with a view of meeting international standards of anti-money laundering and combating the financing of terrorism and proliferation and to address threats to international peace and security. A summary of some of the key changes made by the Act in the FIAMLA is set out below:
Penalties and offences
The penalties for money laundering offences have been increased from a fine not exceeding MUR 2 million to a fine not exceeding MUR 10 million and from a term of penal servitude not exceeding 10 years to a term not exceeding 20 years.
A reporting person (i.e. a bank, a financial institution, a cash dealer or a member of a relevant profession or occupation) and its officers are prohibited from disclosing to any person that a suspicious transaction report is being or has been filed, or that related information has been submitted to the Financial Intelligence Unit (FIU). The law now imposes a sanction for breach of such provision being a fine not exceeding MUR 5 million and imprisonment for a term not exceeding 10 years.
A director or an officer of the FIU or the chairperson or any member of the board of the FIU needs to file with the Independent Commission Against Corruption within 30 days of his appointment, a declaration of his assets and liabilities. Failure to comply with this obligation may result into penalties in the form of a fine not exceeding MUR 1 million and imprisonment for a term not exceeding 2 years.
New obligations on reporting persons and officers of the FIU
New provisions have been added to section 13 of the FIAMLA to empower the Director of the FIU to request information from a reporting person on its client or on any person acting on behalf of its client. The reporting person is required to comply with such request within such time as may be specified in the FIU's request.
A person who qualifies as a reporting person is now required to register with the FIU. The timing and manner to effect registration will be prescribed.
The Minister responsible for AML matters, may identify a jurisdiction as a high risk country based on the recommendation of the National Committee for AML/CFT. With respect to business relationships or transactions involving a high risk country, a reporting person will need apply enhanced CDD measures and additional mitigating measures where applicable and proportionate to the risks, to persons and legal entities carrying out transactions involving a high risk country. In addition, where a jurisdiction has been identified as a high risk country, the Minister can, on the recommendation of the Financial Action Task Force or the National Committee for AML/CFT, specify certain measures to apply to dealings related to the high risk countries such as limiting business relationships or financial transactions with the identified country or persons in the high risk country or prohibiting reporting persons from relying on parties located in the high risk country to conduct elements of the CDD process.
The list of relevant profession or occupation, to whom FIAMLA applies, has been amended to include a company service provider. The Companies Act has also been amended by the Act to include the registration of a company service provider which is defined as a person who provides the following services as a business: (i) acting as a formation agent of a legal person with a view to assisting another person to incorporate, register or set up, as the case may be, a company, a foundation, a limited liability partnership or such other entity as may be prescribed, (ii) acting or causing for another person to act, as a director, as a secretary, as a partner or in any other similar position, as the case may be, of legal person such as a company, a foundation, a limited liability partnership or such other entity as may be prescribed; (iii) providing a registered office, a business address or an accommodation, a correspondence or an administrative address for a legal person such as a company, a foundation, a limited liability partnership or such other entity as may be prescribed; or (iv) acting, or causing for another person to act, as a nominee shareholder for another person.
Company secretaries and holders of management licences which provide any of the above services are, however, not required to be registered as company service provider. A company service provider has to comply with the obligations of a reporting person under the FIAMLA and the rules and regulations thereunder.
Another major amendment to the FIAMLA is the introduction of a new part (Part IVB) titled "supervision by regulatory bodies". Each member of a relevant profession or occupation has a regulatory body which supervises and ensures compliance of its members with the applicable anti-money laundering laws. This new part sets out the functions and powers of the regulatory body vis-a-vis to the members of a relevant profession or occupation who falls under its purview, including the power to issue guidelines and to give directions to ensure compliance by members with relevant anti-money laundering laws. Part IVB also provides for a review panel who is responsible to review certain decisions of a regulatory body.
Amendment to Part 2 of the First Schedule of the FIAMLA
- Finally, the Act has repealed Part 2 of the First Schedule of the FIAMLA (which previously set out a list of countries where overseas financial intelligence units are constituted) and has replaced it with a list of transactions, which when being undertaken, members of a relevant profession or occupation must comply with the applicable provisions of FIAMLA and the rules, regulations or guidelines made or issued thereunder. An example of such a transaction is where a person licensed, under the Gambling Regulatory Authority Act, operates a casino in which any of his customers engages in financial transactions equal to or above MUR 100,000 or an equivalent amount in foreign currency.
The above changes demonstrate the continuous efforts of the Government of Mauritius to strengthen the anti-money laundering framework and to adhere to international initiatives to combat money laundering and financing of terrorism. These measures ensure that the country remains a compliant, secure and safe business and investment destination and reinforces the International Financial Centre of Mauritius for being of good international repute.
*This article should not be construed as legal advice and is made for information purposes only. Should you require legal advice on AML/CFT related matters please contact firstname.lastname@example.org.