This is the second in a series of posts around the 'blacklisting' of Mauritius by the European Union (EU) in 2020 and the steps that the jurisdiction is taking to ensure its removal from the list at the earliest opportunity. We will track the progress made by the Mauritian government in reversing this decision and any related developments.
On 7 May 2020, the EU included Mauritius (along with 11 other countries) on its revised list of high-risk countries that have 'strategic deficiencies in their anti-money laundering and counter terrorist financing frameworks' (AML-CFT Framework). The EU blacklist became applicable on 1 October 2020.
The revised methodology used by the EU to identify high-risk third countries took 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 placed on the FATF's 'grey list' of jurisdictions subject to increased monitoring. The EU blacklisting was a direct consequence.
Mauritius made a high-level political commitment to the FATF and the ESAAMLG (Eastern & Southern Africa Anti-Money Laundering Group) to address the identified strategic deficiencies in its AML-CFT Framework. A high-powered committee headed by the Prime Minister was assembled to accelerate Mauritius' implementation of its FATF Action Plan and secure removal from the FATF list by September 2021.
Implementation of the Action Plan is being monitored by the FATF Africa Middle East Joint Group (AMEJG). Together with the submission of different progress reports, three virtual face-to-face meetings have been held between the Mauritian delegation and the AMEJG in September 2020, January 2021 and May 2021.
Progress reports are then submitted for discussion by the full
FATF at its next Plenary meeting. If the Plenary is satisfied that
all deficiencies have been remedied, a jurisdiction will be removed
from the 'grey list'.
Outcomes from the FATF Plenary June 2021.
A third Progress Report in respect of Mauritius was submitted on 2 April this year, and questions relating to the report were addressed in a virtual meeting with the AMEJG on 12 May. The Report was then now scheduled for discussion at the next FATF Plenary on 11 June.
The good news for Mauritius is that the FATF made a determination at the Plenary that Mauritius has "substantially completed" its Action Plan and now warrants an on-site assessment to verify that implementation of its AML/CFT reforms has begun and is being sustained, and that the necessary political commitment remains in place to sustain implementation in the future.
Specifically, the FATF said Mauritius had made the following key reforms, including by:
- Conducting outreach to promote understanding of ML and TF risks and obligations.
- Developing risk-based supervision plans effectively for the Financial Services Commission.
- Ensuring access to accurate basic and beneficial ownership information by competent authorities in a timely manner.
- Providing training for law enforcement authorities to ensure that they have the capability to conduct money laundering investigations.
As a result, the FATF said it will continue to monitor the COVID-19 situation and conduct an on-site visit to Mauritius at the earliest possible date.
Moving forward – FATF 'onsite visit' to Mauritius
At the beginning of June 2021, the AMEJG concluded that Mauritius has substantially completed its action plan well ahead of the agreed deadline and made a recommendation to the formal FATF International Cooperation Review Group (ICRG) for an onsite visit to Mauritius.
The Minister of Financial Services has now announced that an FATF delegation is to carry out an onsite visit in Mauritius in September 2021, after which a decision on the delisting of Mauritius will be taken by the FATF at its next Plenary meeting, scheduled for October 2021. A further report on the sustained progress of Mauritius will also be sent to the FATF by end of July 2021.
"All measures taken so far demonstrate the underlying unflinching commitment of the government of Mauritius to ensure the sustainability and effectiveness of our efforts to combat money laundering, terrorism financing and proliferation financing in the future," said Mahen Kumar Seeruttun, Minister of Financial Services.
"Government is committed to continue along this path, not only to confirm the progress made during the onsite assessment, but also to take all necessary steps to sustain reforms well beyond the ICRG process in order to strengthen our AML/CFT regime, thereby strengthening our financial system."
Ghana exits the FATF 'grey list'
At its June Plenary, the FATF congratulated Ghana for the significant progress it had made in addressing the strategic AML/CFT deficiencies identified earlier by the FATF and included in its action plan. Ghana will no longer be subject to the FATF's increased monitoring process. This comes after Ghana received an on-site visit, despite the COVID-19 crisis.
In other words, Ghana was officially removed from the FATF 'grey list' following its on-site assessment and, as a result, the European Commission is now understood to have started the administrative process to remove Ghana from its 'blacklist' of high-risk third countries.
This indicates that Ghana could be removed from the EU blacklist in August this year, which is a very encouraging scenario for Mauritius.
The FATF Plenary in June also added Haiti, the Philippines, South Sudan and Malta to the list of countries subject to its increased monitoring process. Malta is the first EU member state to appear on the FATF 'grey list' and it will be very interesting to see if the European Commission now adds Malta to its own blacklist.
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