ESAAMLG's Mutual Evaluation of Kyrgyzstan - 2018

1. Anti-money laundering and counter-terrorist financing measures in Mauritius – Mutual Evaluation Report – July 2018 1
Anti-money laundering and counter-
terrorist financing (AML/CFT)
measures in Mauritius
Fourth Round Mutual Evaluation
Key findings, ratings and priority actions
July 2018
www.fatf-gafi.org/publications/mutualevaluations/documents/mer-Mauritius-2016.html

2. Anti-money laundering and counter-terrorist financing measures in Mauritius – Mutual Evaluation Report – July 2018
Ratings – Effectiveness (1/3)
2
Immediate outcome of an effective system to combat money
laundering (ML) and terrorist financing (TF)
Extent to
which
Mauritius
has achieved
this objective
1. ML and TF risks are understood and, where appropriate,
actions co-ordinated domestically to combat ML and TF
Low
2. International co-operation delivers appropriate information,
financial intelligence, and evidence, and facilitates action
against criminals and their assets
Moderate
3. Supervisors appropriately supervise, monitor and regulate
financial institutions and designated non-financial
businesses and professions (DNFBPs) for compliance with
AML/CFT requirements commensurate with their risks.
Low
4. Financial institutions and DNFBPs adequately apply AML/CFT
preventive measures commensurate with their risks, and
report suspicious transactions.
Moderate

3. Anti-money laundering and counter-terrorist financing measures in Mauritius – Mutual Evaluation Report – July 2018 3
Immediate outcome of an effective system to combat money
laundering (ML) and terrorist financing (TF)
Extent to
which
Mauritius
has achieved
this objective
5. Legal persons and arrangements are prevented from misuse
for money laundering or terrorist financing, and information
on their beneficial ownership is available to competent
authorities without impediments
Low
6. Financial intelligence and all other relevant information are
appropriately used by competent authorities for money
laundering and terrorist financing investigations.
Moderate
7. Money laundering offences and activities are investigated
and offenders are prosecuted and subject to effective,
proportionate and dissuasive sanctions
Moderate
8. Proceeds and instrumentalities of crime are confiscated. Low
Ratings – Effectiveness (2/3)

4. Anti-money laundering and counter-terrorist financing measures in Mauritius – Mutual Evaluation Report – July 2018 4
Immediate outcome of an effective system to combat money
laundering (ML) and terrorist financing (TF)
Extent to
which
Mauritius
has achieved
this objective
9. Terrorist financing offences and activities are investigated
and persons who finance terrorism are prosecuted and
subject to effective, proportionate and dissuasive sanctions.
Low
10. Terrorists, terrorist organisations and terrorist financiers are
prevented from raising, moving and using funds, and from
abusing the non-profit sector.
Low
11. Persons and entities involved in the proliferation of weapons
of mass destruction are prevented from raising, moving and
using funds, consistent with the relevant United Nations
Security Council Resolutions.
Low
Ratings – Effectiveness (3/3)

5. Anti-money laundering and counter-terrorist financing measures in Mauritius – Mutual Evaluation Report – July 2018 5
Ratings – Effectiveness
00
4
7
High
Substantial
Moderate
Low

6. 6
Ratings – technical compliance
(1/5)
September
2016
AML/CFT POLICIES AND COORDINATION
1. Assessing risks & applying a risk-based approach Non NonNonNon Non Compliant
2. National cooperation and coordination PartiParParPar Partially Compliant
MONEY LAUNDERING AND CONFISCATION
3. Money laundering offence Larg LarLarLar Largely Compliant
4. Confiscation and provisional measures Larg LarLarLar Largely Compliant
TERRORIST FINANCING AND FINANCING OF PROLIFERATION
5. Terrorist financing offence PartiParParPar Partially Compliant
6. Targeted financial sanctions related to terrorism & terrorist
financing Non NonNonNon Non Compliant
7. Targeted financial sanctions related to proliferation Non NonNonNon Non Compliant
8. Non-profit organisations Non NonNonNon Non Compliant

7. 7
Ratings – technical compliance
(2/5)
September
2016
PREVENTIVE MEASURES
9. Financial institution secrecy laws PartiParParPar Partially Compliant
Customer due diligence and record keeping
10. Customer due diligence Non NonNonNon Non Compliant
11. Record keeping Larg LarLarLar Largely Compliant
Additional measures for specific customers and activities
12. Politically exposed persons PartiParParPar Partially Compliant
13. Correspondent banking Non NonNonNon Non Compliant
14. Money or value transfer services PartiParParPar Partially Compliant
15. New technologies Non NonNonNon Non Compliant
16. Wire transfers Non NonNonNon Non Compliant

8. 8
Ratings – technical compliance
(3/5)
September
2016
PREVENTIVE MEASURES (continued)
Reliance, Controls and Financial Groups
17. Reliance on third parties Non NonNonNo Non Compliant
18. Internal controls and foreign branches and subsidiaries PartiParParPa Partially Compliant
19. Higher-risk countries PartiParParPa Partially Compliant
Reporting of suspicious transactions
20. Reporting of suspicious transactions ComComComCo Compliant
21. Tipping-off and confidentiality PartiParParPa Partially Compliant
Designated non-financial Businesses and Professions (DNFBPs)
22. DNFBPs: Customer due diligence Non NonNonNo Non Compliant
23. DNFBPs: Other measures Non NonNonNo Non Compliant
TRANSPARENCY AND BENEFICIAL OWNERSHIP OF LEGAL
PERSONS AND ARRANGEMENTS
24. Transparency and beneficial ownership of legal persons Non NonNonNo Non Compliant
25. Transparency and beneficial ownership of legal arrangements PartiParParPa Partially Compliant

9. 9
Ratings – technical compliance
(4/5)
September
2016
POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES
AND OTHER INSTITUTIONAL MEASURES
Regulation and Supervision
26. Regulation and supervision of financial institutions PartiParParPar Partially Compliant
27. Powers of supervisors Larg LarLarLar Largely Compliant
28. Regulation and supervision of DNFBPs Non NonNonNon Non Compliant
Operational and Law Enforcement
29. Financial intelligence units Larg LarLarLar Largely Compliant
30. Responsibilities of law enforcement and investigative
authorities ComComComCom Compliant
31. Powers of law enforcement and investigative authorities ComComComCom Compliant
32. Cash couriers PartiParParPar Partially Compliant

10. 10
Ratings – technical compliance
(5/5)
September
2016
POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES
AND OTHER INSTITUTIONAL MEASURES (continued)
General Requirements
33. Statistics PartiParParPar Partially Compliant
34. Guidance and feedback Larg LarLarLar Largely Compliant
Sanctions
35. Sanctions PartiParParPar Partially Compliant
INTERNATIONAL COOPERATION
36. International instruments Larg LarLarLar Largely Compliant
37. Mutual legal assistance Larg LarLarLar Largely Compliant
38. Mutual legal assistance: freezing and confiscation Larg LarLarLar Largely Compliant
39. Extradition Larg LarLarLar Largely Compliant
40. Other forms of international cooperation Larg LarLarLar Largely Compliant

11. Anti-money laundering and counter-terrorist financing measures in Mauritius – Mutual Evaluation Report – July 2018 11
Ratings – technical compliance
3
11
13
13
Compliant
Largely compliant
Partially compliant
Non compliant

12. Anti-money laundering and counter-terrorist financing measures in Mauritius – Mutual Evaluation Report – July 2018
Key findings
 Mauritius is one of the first countries in Eastern and Southern African Anti-
Money Laundering Group (ESAAMLG) Region to develop an anti-money
laundering and the combating of terrorist financing (AML/CFT) regime.
However, the regime has not kept pace with the evolving global AML/CFT
environment and therefore it has several weaknesses that negatively affect its
effectiveness.
 At the country level, there is no shared understanding of ML/TF risks facing the
country. The National Risk Assessment (NRA) exercise started early 2017 and
was still underway at the time of the onsite visit. Nevertheless, the majority of
the agencies identified drug trafficking as a major proceeds generating crime. In
addition, Mauritian authorities identified the real estate sector and the global
business sector as vulnerable to abuse for ML/TF purposes.
 Financial institutions (FIs) demonstrated an understanding of ML/TF risks albeit
at varying degrees, depending on size and level of sophistication of business
operations. On the other hand, with the exception of management companies
(MCs), majority of the designated non-financial businesses and professions
(DNFBPs) had little or no understanding of ML/TF risks.
12September
2016

13. Anti-money laundering and counter-terrorist financing measures in Mauritius – Mutual Evaluation Report – July 2018
Key findings
13
 Authorities have not assessed the vulnerabilities of the non-profit organisations
(NPO) sector in order to identify which categories of the sector are exposed to
TF risks and determine the nature and scope of action to mitigate the risks.
 FIs operating in the global business sector are legally subject to AML/CFT
obligations. However, the compliance responsibilities for FIs lie almost wholly
on MCs (except in the case of banks) which results in a significant concentration
of risks. Apart from potential conflict of interests, the number of clients against
the resources of the MCs is also a matter of concern.
 The banks lead the way on filing of suspicious transaction reports (STRs),
distantly followed by MCs. However, the level of STR reporting, particularly
from FIs in the global business sector and DNFBPs is very low which is a concern
given the size of the sectors and ML/TF risk exposure.
 Supervisory authorities have not adopted robust systems to assess ML/TF risks
in individual FIs and across sectors which would inform an integrated and
comprehensive risk-based supervision consistent with the dynamics of the
global business sector. The supervisors for DNFBPs were at the embryonic
stages of commencing their regulatory activities and none have established a
risk-based AML/CFT supervisory framework.
September
2016

14. Anti-money laundering and counter-terrorist financing measures in Mauritius – Mutual Evaluation Report – July 2018
Key findings
 The compliance monitoring through onsite inspections by Financial Services
Commission (FSC) is considered to be low relative to the size of the global
business sector and its perceived/related ML/TF risks.
 The legal and regulatory frameworks in relation to sanctions are limited in
coverage and do not provide for a broad range of sanctions which are
commensurate with the nature, severity and frequency of AML/CFT violations
by all FIs and DNFBPs.
 The majority of specific requirements in relation to preventive measures
particularly as regards CDD requirements on PEPs, legal persons and legal
arrangements are contained in BoM Guidance Notes, FSC Code and FIU
Guidelines (issued by BoM, FSC and FIU respectively). However, only the FSC’s
Code on AML/CFT meets the requirements of Other Enforceable Means.
 FIs apply a risk-based approach, and hence apply enhanced CDD measures for
higher risk customers and have developed appropriate AML/CFT controls and
processes, including CDD and transaction monitoring. The MCs, who carry out
these functions for FIs in the global business sector, were also able to
demonstrate these controls and processes, although feedback received
indicated that there were varying levels of compliance within this sector.
14September
2016

15. Anti-money laundering and counter-terrorist financing measures in Mauritius – Mutual Evaluation Report – July 2018
Key findings
15
 Although there is relatively a good number of investigations being carried out
by the Independent Commission against Corruption (ICAC) on corruption
related ML, the number of cases taken to court and conviction secured are
relatively low. Also, of concern is the limitation of ICAC’s powers to effect
arrests.
 Law enforcement agencies (LEAs) do not conduct parallel financial
investigations in a majority of cases, and particularly for offences such as drug
trafficking which is a high risk offence in Mauritius. In addition, tax offences are
not being investigated as a predicate offence and for purposes of ML.
 The LEAs do not have adequate capacity to carry out specific investigative
techniques, although they were noted to be receiving a lot of training in other
areas of investigations and also tended to rely on experienced officers in their
respective units to assist in investigating complicated cases where some of the
investigative techniques are needed.
 Authorities have focused more on gathering intelligence on persons suspected
of terrorist activities and therefore assessors could not assess effectiveness of
TF investigation and prosecution.
September
2016

16. Anti-money laundering and counter-terrorist financing measures in Mauritius – Mutual Evaluation Report – July 2018
Key findings
 Mauritius’s implementation of targeted financial sanctions (TFS) against terrorist
financing (TF) in terms of UNSCRs 1267 and 1373 and successor resolutions is
ineffective, mainly because of serious technical deficiencies that are inherent
within the legal frameworks and absence of appropriate mechanisms.
 Although Mauritius has generally adequate legal framework to enable provision
of mutual legal assistance and extradition, this is affected by the inadequate
criminalisation of TF and legal limitations in the scope of offences which LEAs can
apply for a court order to access all information relating to trusts and Global
Business licensees in terms of the FSA. These limitations restrict the information
which can be exchanged under international co-operation, including beneficial
ownership information. Effectiveness could not be determined due to absence of
a case management system relating to mutual legal assistance matters.
 Mauritius has in place a legal framework relating to obtaining beneficial
ownership of legal persons and arrangements which are customers of FIs. This is
not comprehensive enough to cover all requirements on identification of
beneficial owners and disclosure of such information when required by LEAs.
Furthermore, Mauritius has not yet determined the risks associated with legal
persons and arrangements making it difficult for the authorities to fully
understand the ML/TF vulnerabilities associated with the sectors.
16September
2016

17. Anti-money laundering and counter-terrorist financing measures in Mauritius – Mutual Evaluation Report – July 2018
Priority Actions for Mauritius to
strengthen its AML/CFT System
17
Mauritius should:
 Complete its NRA exercise and implement a National AML/CFT plan of action in
a coordinated manner, involving both the public and private sector to address
the key areas of risk identified.
 On the basis of the findings of the NRA and sectoral risk assessments,
authorities should develop and implement risk-based supervision of the sectors
to promote AML/CFT compliance.
 Take necessary legislative action to amend the FIAMLA to broaden the scope of
preventive measures applicable to FIs and DNFBPs consistent with the FATF
Standards. In addition, the authorities should issue regulations and other
enforceable means within the scope of the FIAMLA to promote proper
interpretation and implementation of the law by the FIs and DNFBPs.
 Considering the size of FIs in the global business sector, authorities should
increase resources in order to ensure that there is optimal supervisory
coverage of the sector in particular MCs. The FIU and other DNFBP regulators
need to be given additional resources to enable them develop capacity and
undertake supervisory activities in order to foster compliance by their entities.
 Take steps to ensure that adequate, accurate and current BO information of
legal persons and legal arrangements in Mauritius is available to competent
authorities in a timely manner.
September
2016

18. Anti-money laundering and counter-terrorist financing measures in Mauritius – Mutual Evaluation Report – July 2018
Priority Actions for Mauritius to
strengthen its AML/CFT System
 Develop a more comprehensive legal framework for MCs to have those firms
perform at a standardized level and to ensure that they apply appropriate
resources given the level of risk that resides in the global business sector.
 Enhance the legal provisions by including effective, proportionate
administrative sanctions and mandating supervisory authorities to apply them
against non-compliance with AML/CFT obligations.
 Remove all legislative impediments to law enforcement’s accessing information
directly from trusts and the global business sector.
 Revise its legal framework with regard to the TF offence in order to make it
consistent with the TF Convention and develop proper mechanisms to
implement measures related to targeted financial sanctions (TFSs), including
allowing authorities to apply interim measures without undue delays and
reliance on court orders.
 Establish a legal, regulatory, and institutional framework to monitor, supervise,
and effectively implement targeted financial sanctions related to proliferation
and ensure that reporting entities are complying with the obligations relating to
implementation of targeted financial sanctions related to proliferation.
18September
2016

19. Anti-money laundering and counter-terrorist financing measures in Mauritius – Mutual Evaluation Report – July 2018
Priority Actions for Mauritius to
strengthen its AML/CFT System
 Ensure that the FIU has access to information relating to tax and
corruption held by MRA and ICAC respectively by repealing the
statutory restrictions.
 Provide more resources to the FIU to enable it develop necessary
capacity to execute its core functions and the other additional
statutory mandates under FIAMLA and ARA such as confiscation
and strategic analysis and produce ML/TF typologies and trends.
 Conduct parallel financial investigations in general, and particularly
for offences such as drug trafficking which is a high-risk offence in
Mauritius. In addition, investigate tax evasion as a predicate
offence of ML.
 Establish an efficient case management system in the Attorney-
General’s office for the collection and dissemination of MLA and
extradition.
19September
2016

20. Anti-money laundering and counter-terrorist financing measures in Mauritius – Mutual Evaluation Report – July 2018
Priority Actions for Mauritius to
strengthen its AML/CFT System
 Gain a clear understanding of the risks posed by the possible
misuse of legal persons and arrangements through the conclusion
of the national risk assessment.
 Conduct outreach to the various reporting entities in order to
ensure better appreciation and understanding of the ML/TF risks
associated with the functions they perform in relation to customer
identification and suspicious transaction reporting.
 Revise the TF legislative framework by removing the requirement
for terrorism offences to be connected to an act of terrorism in
order to broaden the scope of international cooperation.
 Implement the mechanism for the sharing of assets confiscated in
Mauritius with foreign countries that provide assistance especially
where predicate offenses have been committed in those foreign
jurisdictions.
20September
2016