Mauritius exits the Financial Action Task Force (FATF) ‘Grey List’

The Financial Action Task Force (FATF) announced, at its Plenary meeting on 21 October, that it had removed Mauritius from its ‘grey list’ of jurisdictions with strategic deficiencies in their approach to anti-money laundering and combatting terrorism financing (AML/CFT) and therefore subject to increased monitoring.

The move followed an onsite assessment of Mauritius’s AML-CFT Framework by the FATF’s Africa/Middle East Joint Group (AME JG) from 13 to 15 September. The delegation met with the relevant ministries and authorities and visited the premises of a number of institutions.

“Mauritius has strengthened the effectiveness of its AML/CFT regime and addressed related technical deficiencies to meet the commitments in its action plan regarding the strategic deficiencies that the FATF identified in February 2020. Mauritius is therefore no longer subject to the FATF’s increased monitoring process,” said the FATF President Dr. Marcus Pleyer.

Mauritius was first placed on the FATF ‘grey list’ in February 2020. Consequently, it was also included (along with 11 other countries) on the European Union’s revised list of high-risk countries that have ‘strategic deficiencies in their AML-CFT framework’. The EU ‘blacklisting’ applied as of 1 October 2020.

Following its listing, Mauritius made a high-level political commitment to the FATF to address the strategic deficiencies identified. A committee headed by the Prime Minister was assembled to accelerate implementation of its FATF Action Plan and secure removal from the FATF list by September 2021.

The FATF decided at its previous Plenary meeting in June that Mauritius had “substantially completed” its Action Plan. It commended Mauritius for the progress achieved in addressing its strategic deficiencies, especially under difficult circumstances caused by the COVID-19 pandemic. Specifically, the FATF said Mauritius had made the following key reforms:

• Conducting outreach to promote understanding of ML and TF risks and obligations
• Developing risk-based supervision plans effectively for the Financial Services Commission
• Ensuring access to accurate basic and beneficial ownership information by competent authorities in a timely manner
• Providing training for law enforcement authorities to ensure that they have the capability to conduct money laundering investigations.

The AME JG assessment was to verify that implementation of its AML/CFT reforms had begun and was being sustained, and that the necessary political commitment remained in place to sustain implementation in the future.

In parallel, the applications made by Mauritius for an upgrading against FATF Recommendations 8, 24 and 33 were considered during the 21st Council of Ministers Meeting and 42nd Task Force of Senior Officials’ Meeting of the Eastern & Southern Africa Anti-Money Laundering Group (ESAAMLG), for 26 August to 7 September, and the island was re-rated as follows:

• ‘Non-Compliant’ to ‘Largely Compliant’ for Recommendation 8 (Non-Profit Organisations)
• ‘Partially Compliant’ to ‘Largely Compliant’ for Recommendation 24 (Transparency and Beneficial Ownership of Legal Persons)
• ‘Partially Compliant’ to ‘Compliant’ for Recommendation 33 (Statistics).

This means that Mauritius is now ‘Compliant’ or ‘Largely Compliant’ with 39 out of the 40 FATF Recommendations and is only now rated as ‘Partially Compliant’ in respect of Recommendation 15 (New Technologies). Mauritius continues to work with the ESAAMLG to strengthen its AML/CFT regime. The government has now circulated a draft Virtual Assets Business Bill for consultation in view of seeking the comments from stakeholders.

In its communique issued on 21 October 2021, the Financial Services Commission (FSC) reiterated its unflinching commitment in the fight against money laundering, terrorism financing and proliferation financing. The FSC said it will spare no effort to take all necessary actions to protect the integrity of the financial services sector, including the global business sector, with a view to uphold the reputation of Mauritius as a robust and credible jurisdiction.

The European Commission will now review available information from the FATF and should now remove Mauritius from the EU ‘blacklist’ at the earliest opportunity.

Mauritius was rated highest out of all African countries in the World Bank’s 2020 ‘Ease of Doing Business’ report and ranked thirteenth globally. The removal of Mauritius from the FATF ‘grey list’ re-establishes its position as a jurisdiction of substance and reinforces its credentials as the leading investment destination and domicile of choice for structuring cross border investment into Africa and Asia.