In a most heartening sign for the Mauritius International Financial Centre (IFC), the Financial Action Task Force (FATF) announced on October 21, 2021 that Mauritius had been removed from its list of jurisdictions under increased monitoring.
This sends out a strong signal to the international investor community in terms of the effectiveness of Mauritius’ efforts on the crucial battle fronts of anti-money laundering (AML) and combating the financing of terrorism (CFT).
The favourable decision by the FATF can be expected to boost the competitiveness of the financial sector and to increase investments in the country. Indeed, the FATF decision is already bearing fruit with the UK having re-evaluated Mauritius’ status on its own list of high-risk countries for due diligence requirements, which has led to a delisting, and should soon pave the way to the highly anticipated removal of Mauritius from the EU blacklist (list of high risk third countries).
What were the events that led up to last month?
It was in February 2020 that the FATF’s decision to include Mauritius on its list of jurisdictions under increased monitoring shook the Mauritius IFC, almost as much as the first wave of COVID-19 soon thereafter in March 2020 shook the entire economy. Despite the twin setbacks following on each other’s heels, the government worked tirelessly with regulatory authorities and industry stakeholders to implement a series of institutional amendments to enhance the country’s AML-CFT framework and to meet international requirements.
This led, at its June 2021 Plenary Session, to the FATF endorsing the substantial and expeditious progress made by Mauritius to consolidate the jurisdiction’s AML/CFT regime, a situation which warranted an on-site inspection to validate the progress made by Mauritius. The much-anticipated on-site visit was conducted from 13 to 15 September 2021 – and sent a wave of hope through the island economy following FATF’s favourable observations.
Subsequently, on 15 October, the FATF’s International Co-operation Review Group recommended that Mauritius should exit the FATF list, and it was altogether a huge vindication of the government’s efforts when the decision was ratified and announced at the end of the FATF hybrid plenary session held from 19-21 October.
Mauritius’ reforms heralded on the international stage
Speaking at the FATF press conference on 21 October, Dr Marcus Pleyer, President of the FATF, congratulated Mauritius for being removed from the grey list. He noted that Mauritius had given a high-level commitment to implement reforms that had improved the country’s AML and CFT system, and had now been removed from the list after completing its action plan and a successful onsite visit. In terms of the progress made by Mauritius, Dr Pleyer mentioned that Mauritius has enhanced the capacities of investigative authorities to detect cases in medium and high-risk sectors and significantly increased domestic and international corporations.
He said: “They have taken appropriate efforts to investigate and prosecute money laundering, including through parallel financial investigations in line with its risk profiles and they developed and boosted capacity of the AML supervision of the global business sector and adequately supporting the supervision of the non-financial sector. So, these are just some of the reforms that Mauritius has implemented, and this achievement only happened due to the hard work and determination of the officials who recognised that changes needed to be made.”
At the level of the island economy, the Mauritius Bankers Association has compiled a table that demonstrates Mauritius’ laudable progress on the 40 FATF recommendations over the period from July 2018, when the Mutual Evaluation Report (MER) for Mauritius (4th round MER) was published, till the latest round of evaluations in September 2021. Hearteningly, it underlines that only 1 recommendation remains in the ‘partly compliant’ category, with all others going to show that Mauritius is either largely (13/40) or fully compliant (26/40).
Mauritius IFC looks ahead to a brighter future in Africa, and beyond
Welcoming the FATF decision, Roshan Nathoo, Managing Director of Rogers Capital Corporate Services Ltd, noted, “It was an honour for me to interact with FATF authorities during their on-site visit and inspection in September 2021. It is an even greater honour to find that the visit has culminated in the removal of Mauritius from the FATF list. This long-anticipated development will lead to an increase in investments in the country and allow us to meet the challenges head on that our economy has faced since early last year when Mauritius was first included on the list.”
In what is already a positive development for the island and augurs extremely well for a favourable outcome on the EU side, following the delisting of Mauritius by the FATF, the United Kingdom (UK) has in the first week of November removed Mauritius as a high-risk country for the purposes of enhanced customer due diligence requirements.
Roshan Nathoo adds, “This milestone has been achieved through amendments made to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulation 2017. It signifies yet another laurel for Mauritius in the fight against money laundering, even as it renews confidence from international parties with the country well on track to regain its status as a compliant domicile for international trade and investment.”
In terms of the way forward, the recent Capital Economics report has definitively proved that Mauritius has a vital role to play as a hub for investments into Africa. The report underlines that the island economy supports 4.2 million jobs on the continent, crucial in a COVID-19 context. We can now look forward to reinforcing the position of the Mauritius IFC as a jurisdiction of substance and repute in Africa and internationally.