The country was, in February, put on the list of jurisdictions that require increased monitoring.
These are done to counter money-laundering, terrorist financing, and proliferation financing in a more efficient manner.
Mauritius’ plan to wriggle out of the Financial Action Task Force’s (FATF’s) grey list - by the end of this year - could be hit by COVID-19.
The country was, in February, put on the list of jurisdictions that require increased monitoring.
This list is often referred to as the “grey list”.
Jurisdictions under increased monitoring actively work with the FATF to address strategic deficiencies in their regimes.
These are done to counter money-laundering, terrorist financing, and proliferation financing in a more efficient manner.
While Mauritius aims to fulfill all requirements ahead of schedule, the assessment of its progress report by the FATF may be delayed by the pandemic, thereby impacting investments routed through the country, said people in the know.
Globally, the FATF’s grey list could create a negative perception towards Mauritius, especially among large investors like pension, endowment, and sovereign wealth funds, said experts.
The RBI, too, rejected a few applications for NBFC licences recently, as the investment was routed through Mauritius.
The FATF has identified areas in which Mauritius has to demonstrate higher effectiveness of its AML/CFT system.
It has obtained technical assistance from the EU-funded AML/CFT Global Facility and the German government (through German Development Agency, GIZ) to support implementation of the FATF Action Plan.
Mauritius meets 53 out of the 58 recommended actions, including the big six recommendations, and there is an agreed timeline to cure the identified shortcomings.
“The country is committed to implement the action plan one year ahead of the schedule, as agreed with the FATF. Various technical committees have been set up to address each of the five shortcomings with a strict time frame and outcomes,” said a person familiar with matter.
“Mauritius has submitted a report to the FATF, addressing the five issues raised.”
“The Mauritian government is fully committed to exiting the FATF and EU lists.
"Mauritius is largely compliant with 35 of the 40 recommendations by FATF,” said Neha Malviya, director at Wilson Financial Services.
Last month, the European Commission included Mauritius in its revised list of high-risk countries, with strategic deficiencies in their anti-money laundering and counter-terrorist financing frameworks.
“The Mauritian Authorities delivered on their commitment and a first progress report was sent to the FATF on the agreed date.
"Regrettably, the FATF process has been halted owing to the Covid situation, and the progress report could not be assessed,” a May 9 communiqué by the Ministry of Financial Services and Good Governance observed.
Photograph: Zammit Lumi/Reuters
