This article discusses the enhanced measures implemented to strengthen the anti-money laundering legislative framework through the Financial Intelligence and Anti-Money Laundering Act (FIAMLA). The most noteworthy change is the replacement of the FIAMLA Regulations 2003 with a new version (Regulations 2018), which came into force on 1 October 2018.

A highlight of the key changes is provided below and a comprehensive summary of all changes to FIAMLA is set out in the Annex and below.

THE CHANGES

The Regulations 2018 have refined or introduced the following key definitions:

“Customer” & “Competent Authorities” (Regulation 2)

Customer

The term ‘customer’ means a natural person or a legal person or a legal arrangement for whom a transaction or account is arranged, opened or undertaken. Its definition now captures ‘an applicant for business’ in the list of designated persons who meet with this definition.

Competent Authorities

This is a new definition which has been introduced. It means ‘a public authority to which responsibility to combat money laundering or terrorist financing is designated; and includes a supervisory authority, regulatory body and an investigatory authority’.

“Close Associates” & “Family Members (Regulation 15)

These are new definitions and mean the following:

‘Close Associates’

an individual closely connected to a PEP, either socially or professionally; and

any other person, as may be specified by a supervisory authority or regulatory body, after consultation with the National Committee.

‘Family Members’

an individual related to an PEP either directly through consanguinity, or through marriage or similar civil forms of partnership; and

any other person, as may be specified by a supervisory authority or regulatory body, after consultation with the National Committee.

“Ownership Interest” (Regulation 6)

This phrase now designates ‘a controlling ownership interest’ instead of “an ownership interest of 20 per cent or more”.

“Reporting Person” (Regulations 9 & 21)

The Regulations 2018 have repealed the existing provisions on the question of undertaking verifications on the identity of customers and beneficial owners.

Accordingly, under the new regime, the relevant supervisory authority or regulatory body has a discretion to allow a reporting person to complete the verification of the identity of a customer and beneficial owner once the business relationship has been established. However, this is subject to the following conditions:

this is essential not to interrupt the normal conduct of business;

the verification of identity occurs as soon as reasonably practicable; and

the money laundering and terrorism financing risks are effectively managed by the reporting person.

An important caveat to this new regime is that once a reporting person has been allowed to establish the business relationship before the completion of the verification exercise, s/he has an obligation to adopt and implement risk management procedures concerning the conditions under which a customer may use the business relationship prior to verification.

Furthermore, the new regime is to the effect that where a reporting person relies on a third party that is part of the same financial group, the host or home supervisors may consider that the requirements of paragraphs (1), (2) and (3) in Regulation 21 are met, where –

the group applies CDD and record-keeping requirements and programmes against money laundering and terrorism financing, in accordance with FIAMLA and these regulations;

the implementation of those CDD and record-keeping requirements and programmes against money laundering and terrorism financing is supervised at a group level by a competent authority; and

any higher country risk is adequately mitigated by the group’s policies to combat money laundering and terrorism financing.

CONCLUSION

The impact of the measures adopted in the National Budget 2018/2019 remains to be seen in the long term. However, it cannot be disputed that the strengthening of anti-money laundering measures in a jurisdiction which focuses significantly on cross-border and other offshore transactions is a hallmark of the Mauritian Government’s continuing efforts to position Mauritius as a sound and reliable international jurisdiction for global business.

Type

Insight

Locations

Mauritius

Share
Twitter LinkedIn Email Save as PDF
More Publications
10 Jun 2022

‘’With the people, for the people’’ – the Mauritian National Budget 2022-2023

On 07 June 2022, the Minister of Finance, Economic Planning and Development (Minister of Finance) ta...

Contributors: Vaishali Damonaiko
26 Apr 2022

Appleby Mauritius Newsletter, April 2022

In the April 2022 issue of Appleby’s newsletter, we give you an overview of the latest legal and r...

26 Apr 2022

Employment rights during and following a pandemic under the Workers’ Rights Act

In view of the ongoing COVID-19 pandemic which is currently affecting the community at a global leve...

22 Sep 2021

The Financial Services Commission of Mauritius issues the Financial Services (Crowdfunding) Rules 2021

In line with the National Budget 2021-2022 and the ambition of the Mauritian Government to establish...

12 Mar 2021

Material adverse change clauses in light of the Covid-19 pandemic

Experts from each of our key global offices provide jurisdiction specific advice and answer question...

8 Mar 2021

Appleby Celebrates International Women’s Day

International Women’s Day is celebrated annually in support of gender equality and equal participa...

30 Oct 2020

When Worlds Collide – How COVID is Connecting Technology with Natural Resources

Dating back to the beginning of 2020, the natural resources sector has been extremely active at both...

Contributors: Peter Colegate
21 Sep 2020

The role of Private Equity in economic recovery from Covid-19

Against this gloomy backdrop, we expect private equity firms and their investors to play a key role ...