The European Union (EU) has included Mauritius and 11 other countries on its revised list of high-risk countries allegedly having strategic deficiencies in their anti-money laundering and counter terrorist financing frameworks (AML-CFT Framework). The EU blacklist will become applicable as from 1 October 2020. The EU is of the view that these strategic deficiencies pose significant threats to the financial system of the European Union. The EU is committed to providing technical assistance to the listed countries to remedy the identified strategic deficiencies.
The revised methodology used by the EU to identify high-risk third countries takes into account the increased interaction between the EU and the Financial Action Task Force (FATF) listing process, an enhanced engagement with third countries and reinforced consultation with its member states. In February 2020, Mauritius was put on the FATF grey list of jurisdictions under increased monitoring and the proposed EU blacklisting is a direct consequence thereof.
For Mauritius, the EU identified 5 areas of deficiencies after assessing the latest information in this context from the FATF, namely: (i) deficiencies in demonstrating that the supervisors of its global business sector implement risk-based supervision; (ii) failure to ensure access to accurate beneficial ownership information by competent authorities in a timely manner; (iii) failure to demonstrate that law enforcement authorities have capacity to conduct complex money laundering investigations; (iv) failure in implementing a risk-based approach for supervision of its non-profit organisation sector; and (v) failure to demonstrate adequate implementation of targeted financial sanctions through outreach and supervision.
In a communique issued by the Government of Mauritius on the 9 May 2020, that the decision of the EU is ”contrary to the spirit of dialogue and partnership which binds Mauritius and the EU.” This proposition from the EU was seen as unjustified and provoked a public outcry in Mauritius. The Government of Mauritius has already initiated actions to open a dialogue with the EU. The government also reiterated its high level political commitment to implement the action plan of the FATF at the earliest so as to exit the FATF and the EU lists. The government and the private sector sought to reassure the international investment community that Mauritius remains a credible and trusted jurisdiction of substance and good repute.