Mauritius is on the FATF List of Countries that have been identified as having strategic AML deficiencies
FATF Statement re AML Strategic Deficiencies: 23 October 2020
Since February 2020, when Mauritius made a high-level political commitment to work with the FATF and ESAAMLG to strengthen the effectiveness of its AML/CFT regime, Mauritius has taken steps towards improving its AML/CFT regime, including by developing a risk-based supervision plan for the global business and management companies. Mauritius should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) implementing the risk-based supervision plan effectively for The Financial Services Commission and focusing on different stages of outreach across DNFBP supervisors; (2) ensuring the access to accurate basic and beneficial ownership information by competent authorities in a timely manner; (3) demonstrating that law enforcement have capacity to conduct money laundering investigations, including parallel financial investigations and complex cases; (4) implementing a risk-based approach for supervision of its NPO sector to prevent abuse for TF purposes, and (5) demonstrating the adequate implementation of targeted financial sanctions through outreach and supervision.
Compliance with FATF Recommendations
The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Mauritius was undertaken in 2019. According to that Evaluation, Mauritius was deemed Compliant for 26 and Largely Compliant for 9 of the FATF 40 Recommendations. It was deemed Highly effective for 0 and Substantially Effective 0 of the Effectiveness & Technical Compliance ratings.
US Department of State Money Laundering assessment (INCSR)
Mauritius 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: -
Although Mauritius has developed a reputation as a well-regulated financial jurisdiction, its regulatory and enforcement scheme has some limitations. A new government came to power in Mauritius after general elections in December 2014, announcing its intention to curb fraud and corruption and promote good governance. Yet investigations thus far have centered on members of the former government and its financiers. Opposition parties and the media have criticized some of these actions as being politically motivated.
The major sources of laundered funds in Mauritius are crimes involving drug trafficking (mainly heroin and the prescription drug subutex), as well as theft of goods, conspiracy, forgery, swindling, Ponzi schemes, and corruption. Media reports indicate money laundering occurs in the banking system, the offshore financial sector, and the non-bank financial sector. Criminal proceeds are derived from both domestic and foreign criminal activities. There is no known black market for smuggled goods in Mauritius.
Mauritius is a significant foreign investment route into the Asian sub-continent and, increasingly, into mainland Africa. As of the end of October 2015, there were 21,606 global business companies (GBCs) registered in Mauritius, including 942 licensed global funds. The Financial Service Commission (FSC) licenses the management companies that provide professional services to GBCs. Shell companies and bearer shares are not allowed in the Mauritian GBC sector, nor are nominee or anonymous directors or trustees.
The Government of Mauritius established the Mauritius Freeport, a free-trade zone (FTZ), to promote the country as a regional FTZ center for Eastern and Southern Africa and the Indian Ocean rim. As of November 20, 2015, 231 companies operate in the Freeport. For the period January 1 – November 20, 2015 Freeport turnover was approximately $1.3 billion.
There are no international sanctions currently in force against this country.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index 52
World Governance Indicator – Control of Corruption 63
Since independence in 1968, Mauritius has undergone a remarkable economic transformation from a low-income, agriculturally based economy to a diversified, upper middle-income economy with growing industrial, financial, and tourist sectors. Mauritius has achieved steady growth over the last several decades, resulting in more equitable income distribution, increased life expectancy, lowered infant mortality, and a much-improved infrastructure.
The economy currently rests on sugar, tourism, textiles and apparel, and financial services, but is expanding into fish processing, information and communications technology, and hospitality and property development. Sugarcane is grown on about 90% of the cultivated land area and accounts for 15% of export earnings. The government's development strategy centres on creating vertical and horizontal clusters of development in these sectors. Mauritius has attracted more than 32,000 offshore entities, many aimed at commerce in India, South Africa, and China. Investment in the banking sector alone has reached over $1 billion. Mauritius’ textile sector has taken advantage of the Africa Growth and Opportunity Act, a preferential trade program that allows duty free access to the US market, with Mauritian exports to the US growing by 40% from 2000 to 2014.
Mauritius' sound economic policies and prudent banking practices helped to mitigate negative effects of the global financial crisis in 2008-09. GDP grew in the 3-4% per year range in 2010-14, and the country continues to expand its trade and investment outreach around the globe. Growth in the US and Europe fostered goods and services exports, including tourism, while lower oil prices kept inflation low in 2015.
Agriculture - products:
sugarcane, tea, corn, potatoes, bananas, pulses; cattle, goats; fish
food processing (largely sugar milling), textiles, clothing, mining, chemicals, metal products, transport equipment, nonelectrical machinery, tourism
Exports - commodities:
clothing and textiles, sugar, cut flowers, molasses, fish, primates (for research)
Exports - partners:
UK 13.2%, UAE 12.4%, France 11.9%, US 10.7%, South Africa 8.6%, Madagascar 6.5%, Italy 5.4%, Spain 4.4% (2015)
Imports - commodities:
manufactured goods, capital equipment, foodstuffs, petroleum products, chemicals
Imports - partners:
India 18.7%, China 17.8%, France 7.1%, South Africa 6.5%, Vietnam 4.4% (2015)
Investment Climate - US State Department
Mauritius is an island nation with a population of 1.3 million people. Its land area of only 2,040 square kilometers understates its importance to the Indian Ocean region as it controls a maritime zone of approximately 2 million square kilometers, one of the largest in the world. Mauritius has a stable and competitive economy, with a GDP of USD 11.6 billion and per capita GDP over USD 9,218 in 2015. The economy grew by 3.4 percent in 2015 and IMF estimates it will continue to grow at a moderate rate of 3.8 to 4 percent in the medium term. Inflation remains low (1.5 percent in 2015), reflecting in part declining oil prices and shipping costs. Unemployment hovers around 8 percent, although it is higher among women and youth. According to the World Bank’s 2016 Ease of Doing Business Index, Mauritius ranks first in Africa and 32d worldwide (out of 189 countries).
Since achieving independence in 1968, Mauritius has made a remarkable economic transformation from a mono-crop economy based on sugar production to a diversified economy driven by export-oriented manufacturing (mainly textiles), tourism, and financial and business services. With sluggish growth in the past several years, the government of Mauritius has announced plans to stimulate economic growth in four areas: serving as a gateway for investment into Africa, moving the country towards renewable energy, facilitating the development of smart cities, and developing economic activities related to the country’s vast oceanic resources.
Government policy in Mauritius is firmly centered on promoting foreign and domestic investment, having signed Double Taxation Avoidance Agreements with more than 40 countries and maintaining a legal and regulatory framework that keeps Mauritius highly-ranked on “ease of doing business” and good governance indices. In recent years Mauritius has been especially intent on attracting foreign direct investment from emerging economies. In support of this, the government highlights its democratic tradition and good governance. However, following the Central Bank’s revocation of the banking license of Bramer Bank in 2015, the Government of Mauritius (GOM) nationalized the bank’s assets. There is an ongoing lawsuit alleging that this was an illegal appropriation of assets.
Although corruption in Mauritius is low by regional standards, its generally positive reputation for transparency and accountability has been affected by recent allegations of corruption involving high-level government officials.
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