FATF AML Deficiency List
US Dept of State Money Laundering assessment
Non - Compliance with FATF MER Recommendations
Corruption Index (Transparency International & W.G.I.)
World Governance Indicators (Average Score)
Mauritania is not on the FATF List of Countries that have been identified as having strategic AML deficiencies
Compliance with FATF Recommendations
The latest follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Mauritania was undertaken in 2020. According to that Evaluation, Mauritania was deemed Compliant for 11 and Largely Compliant for 21 of the FATF 40 Recommendations. It was also deemed Highly Effective for 0 and Substantially Effective for 0 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.
US Department of State Money Laundering assessment (INCSR)
Mauritania was deemed a ‘Monitored’ Jurisdiction by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR). Key Findings from the report are as follows: -
The Islamic Republic of Mauritania has a largely informal and under-developed economy. Its economic system suffers from a combination of weak government oversight, lax financial auditing standards, a large informal trade sector, porous borders, and corruption in government and the private sector. Money laundering is difficult to detect in Mauritania because of the informal nature of much of the economy and speculation that large amounts of drug money pass through the economy. The banking system and black market currency exchanges constitute the focus of this activity, which affects the operation of the entire financial sector in the country. There are strong indications that large amounts of money are being pumped into the financial system from outside or suspicious sources, some of which are transported across borders or through ports. Border security is a severe challenge in Mauritania.
Mauritania imports almost 70 percent of its food needs. In 2015, mining represented approximately 20 percent of Mauritanian GDP, and 70 percent of national exports. Only an estimated 12 percent of Mauritanian adults have bank accounts, and informal banking and financial systems remain vulnerable to exploitation. The Government of the Islamic Republic of Mauritania has continued an aggressive campaign against terrorist networks, including al-Qaida in the Islamic Maghreb.
There are no international sanctions currently in force against this country.
The Arab League (comprising 22 Arab member states), of which this country is a member, has approved imposing sanctions on Syria. These include: -
Cutting off transactions with the Syrian central bank
Halting funding by Arab governments for projects in Syria
A ban on senior Syrian officials travelling to other Arab countries
A freeze on assets related to President Bashar al-Assad's government
The declaration also calls on Arab central banks to monitor transfers to Syria, with the exception of remittances from Syrians abroad.
The Arab League has also boycotted Israel in a systematic effort to isolate Israel economically in support of the Palestinians, however, the implementation of the boycott has varied over time among member states. There are three tiers to the boycott. The primary boycott prohibits the importation of Israeli-origin goods and services into boycotting countries. The secondary boycott prohibits individuals, as well as private and public sector firms and organizations, in member countries from engaging in business with any entity that does business in Israel. The Arab League maintains a blacklist of such firms. The tertiary boycott prohibits any entity in a member country from doing business with a company or individual that has business dealings with U.S. or other firms on the Arab League blacklist.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index 29
World Governance Indicator – Control of Corruption 20
Corruption is an obstacle to business in Mauritania. All sectors of the economy suffer from pervasive corruption. Licenses and permits are often obtained through bribery or clientelistic networks, and the same applies for obtaining public contracts, particularly in the country's extractive industries. The political landscape is dominated by deeply entrenched patronage networks with stakes in the economy, so practices of favoritism are common. Mauritania's investment climate is further hampered by administrative barriers and an inefficient legal system. Corruption offenses are criminalized under the country's Penal Code (in French) and encompass both the public and the private sectors. However, laws are poorly enforced, and government officials engage in corruption with impunity. Unofficial payments and gifts are widespread practices in Mauritania. For further information - GAN Integrity Business Anti-Corruption Portal
Mauritania's economy is dominated by natural resources and agriculture. Half the population still depends on agriculture and livestock for a livelihood, even though many nomads and subsistence farmers were forced into the cities by recurrent droughts in the 1970s and 1980s. Recently, GDP growth has been driven by foreign investment in the mining and oil sectors.
Mauritania's extensive mineral resources include iron ore, gold, copper, gypsum, and phosphate rock, and exploration is ongoing for uranium, crude oil, and natural gas. Extractive commodities make up about three-quarters of Mauritania's total exports, subjecting the economy to price swings in world commodity markets. Mining is also a growing source of government revenue, rising from 13% to 29% of total revenue between 2006 and 2013. The nation's coastal waters are among the richest fishing areas in the world, and fishing accounts for about 25% of budget revenues, but overexploitation by foreigners threatens this key source of revenue.
Risks to Mauritania's economy include its recurring droughts, dependence on foreign aid and investment, and insecurity in neighbouring Mali, as well as significant shortages of infrastructure, institutional capacity, and human capital. Mauritania has sought additional IMF support by focusing efforts on poverty reduction. Investment in agriculture and infrastructure are the largest components of the country’s public expenditures.
Agriculture - products:
dates, millet, sorghum, rice, corn; cattle, sheep
fish processing, oil production, mining (iron ore, gold, copper)
Exports - commodities:
iron ore, fish and fish products, gold, copper, petroleum
Exports - partners:
China 32.7%, Switzerland 11.1%, Spain 8.6%, Italy 6.7%, Cote d’Ivoire 6.6%, Japan 5.7% (2015)
Imports - commodities:
machinery and equipment, petroleum products, capital goods, foodstuffs, consumer goods
Imports - partners:
China 25.5%, Algeria 8.4%, France 6.3%, Morocco 5.1%, Spain 4.8%, Brazil 4.5%, US 4% (2015)
Investment Climate - US State Department
Mauritania is in northwestern Africa. Historically, Mauritania has been relatively open to foreign direct investment, especially in the mining, hydrocarbon, and fishing sectors. In June 2012, to encourage further investment, the government updated provisions in the Investment Code to enhance the security of investments and facilitate administrative procedures. The Code provides for free repatriation of foreign capital and wages for foreign employees. Despite Mauritania’s open policy towards foreign direct investment, certain jobs in key sectors, such as security and fisheries, must be filled by Mauritanian nationals.
The Civil and Commercial Codes include legislation that protects contracts, although court enforcement and dispute settlement are often challenging. The judicial system remains weak, unpredictable, and inefficient in its application of the law. Judges lack training and specialized experience in commercial and financial law. Familial, political and tribal considerations too often trump commercial law in judicial decision-making.
The tax system remains opaque. Over the last two years the rate of tax collection has increased, although in a targeted manner. Tax rates on businesses start at 25 percent on profits and two percent on revenue; moreover, procedures required to pay taxes lack transparency and are time-consuming. Some businesses have faced retaliatory tax bills when they sought in good faith to follow provisions of the law. As the external economic shock from the steep drop in commodity prices has been more persistent than originally foreseen, authorities have begun to adjust their policies in 2015, soliciting more revenues from the private sector to bail out government owned enterprises by adopting even stricter measures to increase tax revenues.
Labor laws and conditions of employment are complex, encouraging annual labor contracts over permanent employment. Terms of employment limit companies’ ability to hire and dismiss employees freely. Likewise, environmental, health, and safety laws and policies exist on paper, but are costly to implement and rarely or inconsistently enforced.
Although legally outlawed, de facto slavery continues to exist in Mauritania, particularly in domestic situations and in rural and agricultural settings. In 2015 Mauritania adopted an improved anti-slavery law that more clearly defines the practice and raises the penalties for those convicted. Foreign investors should be aware that it is not uncommon for local suppliers or contractors to engage slave labor.
Corruption remains a concern. During the July 2009 presidential election, President Aziz launched an anti-corruption campaign. In 2014 it was renewed and has resulted in the imprisonment of several officials and business leaders. Though corruption remains a strong concern, companies generally cite high taxes, insufficient access to credit, underdeveloped infrastructure, and a lack of skilled labor as the main impediments when investing in Mauritania.
The overall investment climate in Mauritania remains challenging for U.S. and other foreign investors. The Mauritanian government encourages foreign direct investment, but a weak judicial system, opaque tax laws, complicated labor laws, a fragile political system, underdeveloped infrastructure, and lack of skilled labor should all be considered before investing.
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