In February 2020, the Financial Action Task Force (FATF) grey-listed Mauritius and highlighted shortcomings in the financial regulation ecosystem. In a record 18 months’ time, Mauritius was delisted yesterday. Dr. Navin Beekarry, Director General of the Independent Commission Against Corruption (ICAC), also chairperson of the Core Group on the Anti- Money Laundering/Combating the Financing of Terrorism (AML/CFT) tasked to engineer the necessary reforms, answers our questions on this landmark achievement.
Since yesterday Mauritius has been removed from FATF’s grey list. Can you tell us more about it?
It is a very important decision taken by FATF to remove Mauritius from its grey list following the completion of the country’s Action Plan and on-site visit by FATF assessors. This decision is an acknowledgement by the FATF global community of the amount of work done by the Mauritian authorities and they confirm the independence and the credibility of our institutions.
The FATF is an international organisation that develops international standards to combat money laundering and terrorist financing. Countries have the obligations to put in place institutions and adopt laws so as to implement these international standards. Accordingly, Mauritius has adopted its laws and set up institutions.
The FATF has another important functioning which is to evaluate the performance of these laws and institutions.
If a country does not have any laws regarding combating money laundering and terrorist financing and has not established effective systems to prevent money laundering and terrorist financing, the financial services of the country will weaken and thus represent a risk to the international financial system.
What is the key information in the report?
The FATF and the international community have recognised Mauritius as an improved and effective AML/CFT system through measures adopted and well-performing institutions. The country no longer represents risks in terms of its financial services.
In February 2020, Mauritius was placed on FATF’s grey list as a result of strategic deficiencies identified by the FATF in its anti-money laundering and combating the financing of terrorism (AML/CFT) system.
In order to exit that list, Mauritius was called upon by the FATF to implement an Action Plan. From February 2020 till June 2021, Mauritius has continued to improve and consolidate its AML/CFT system.
What were the strategic deficiencies?
The banking and non-banking financial services sectors, investigation and prosecution, and designated non-financial businesses, casinos and gambling, and professions such as lawyers, had weaknesses that represent strategic deficiencies.
Following the implementation of the Action Plan, the FATF in June 2021 concluded that these sectors no longer represent strategic deficiencies as there are more rigorous laws, reinforced institutions and effective systems which limit the risks of black money entering the country.
What are the actions undertaken by Mauritius to improve its AML/CFT system?
Government has adopted measures to strengthening the effectiveness of its AML/CFT system through effective laws and institutions. At the end of this process, the FATF’s assessors have concluded that the country has substantially completed its Action Plan ahead of time.
In June 2021, the FATF decided that there should be an on-site visit of assessors in Mauritius to confirm that the measures have been adopted and that the country can exit the grey list.
The decision was taken last week by the FATF International Cooperation Review Group (ICRG) and ratified at FATF’s plenary yesterday to remove Mauritius on the grey list.
What does the delisting of Mauritius on the grey list imply for the institutions in the country?
The delisting demonstrates the recognition of the international community on efforts of Mauritius to strengthen its AML/CFT regime and financial system. It is also an acknowledgement by the FATF global community that the relevant institutions are independent and effective in their tasks to minimise risks of money laundering and financing of terrorism, and black money entering the country.
When was the country scheduled to exit the list?
Depending on the progress made, it was scheduled for Mauritius to exit the list some time in 2022. The international community, in their intervention at the IGRC indicated that it is the first time that a country is exiting this grey list well ahead of the scheduled deadline.
This indicates that the Mauritian authorities, the public and private sector have been engaged to reinforce the AML/CFT system and Mauritius can serve as an example in the region to support other countries in engagement towards AML/CFT.
What is now the way forward?
The Core Group on the AML/CFT which was established to monitor progress on the FATF Action Plan is now a permanent committee. The dedicated sub-committee of the Core Group chaired by myself has been working progressively since December 2020 and will continue with its follow up to further reinforce the system so that Mauritius does not get back on the grey list. The FATF will conduct its evaluation every 4/5 years.
