Feb 25, 2020
PR No.:
10/2020
Inclusion of Mauritius in the FATF list of “jurisdictions under
increased monitoring”
The Financial Action Task
Force on February 21, 2020, has placed Mauritius in the list of “jurisdictions
under increased monitoring”, commonly referred to as the “grey list” and has
stated the following:
“In
February 2020, Mauritius made a high-level political commitment to work with
the FATF and ESAAMLG to strengthen the effectiveness of its AML/CFT regime.
Since the completion of its MER in 2018, Mauritius has made progress on a
number of its MER recommended actions to improve technical compliance and effectiveness,
including amending the legal framework to require legal persons and legal
arrangements to disclose of beneficial ownership information and improving the
processes of identifying and confiscating proceeds of crimes. Mauritius will
work to implement its action plan, including by: (1) demonstrating that the
supervisors of its global business sector and DNFBPs implement risk-based
supervision; (2) ensuring the access to accurate basic and beneficial ownership
information by competent authorities in a timely manner; (3) demonstrating that
LEAs 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.”
There have been apprehensions
among market participants that whether inclusion of Mauritius in the ‘grey
list’ would have an effect on the registration of FPIs from Mauritius.
SEBI (Foreign Portfolio
Investors) Regulations, 2019 inter-alia states that an applicant is eligible to
become a FPI if it is not resident in the country identified in the public
statement of FATF as- i) a jurisdiction having a strategic Anti-Money
Laundering or Combating the Financing of Terrorism deficiencies to which
counter measures apply; or ii) a jurisdiction that has not made sufficient
progress in addressing the deficiencies or has not committed to an action plan
developed with the FATF to address the deficiencies. This condition was also in
SEBI (Foreign Portfolio Investors) Regulations, 2014.
It is noted from FATF
website that when a jurisdiction is placed under increased monitoring, it
construes that the country has committed to resolve swiftly the identified
strategic deficiencies within agreed timeframes and is subject to increased
monitoring. The FATF does not call for the application of enhanced due
diligence to be applied to these jurisdictions, but encourages its members to
take into account this information in their risk analysis. The intermediaries
should take note of the same.
Additionally, FATF
identifies jurisdictions that have significant strategic deficiencies in their
regimes to counter money laundering, terrorist financing, and financing of
proliferation. For all such countries, the FATF calls on all members and urges
all jurisdictions to apply enhanced due diligence, and in the most serious
cases, countries are called upon to apply counter-measures to protect the
international financial system. This
list is often referred to as the “black list”. It is mentioned in FATF website
that this was previously called "Public Statement".
Therefore, FPIs from
Mauritius continue to be eligible for FPI Registration with increased
monitoring as per FATF norms.