On the 7 May 2020 the European Commission (the Commission) issued a Commission Delegated Regulation amending Delegated Regulation (EU) 2016/1675 supplementing Directive (EU) 2015/849 of the European Parliament and of the Council, as regards adding certain countries to the list of high-risk third countries. Mauritius was included in this list and the said article became applicable as from 1 October 2020. This list sets out those countries identified as presenting strategic deficiencies in their AML/CFT regime that pose significant threats to the financial system of the European Union.
In compiling this list the European Commission took into account, as appropriate, information from international organisations and standard setters in the field of AML/CFT, the recent FATF Public Statements, FATF documents “Improving Global AML/CFT Compliance: On-going Process Statement”, FATF reports of the International Cooperation Review Group, and mutual evaluation reports carried out by the FATF and the FATF-Style Regional Bodies (FSRBs) in relation to strategic deficiencies of individual third countries, in line with Article 9(4) of Directive (EU) 2015/849.
The Mauritius government is very critical of the Commission’s decision to include Mauritius on the EU List for a number of reasons, including (i) the listed countries were given no opportunity to provide any explanation or make representations; (ii) the Commission did not carry out its own autonomous process but relied exclusively on the Financial Action Task Force (the “FATF”) findings; and (iii) the Commission merely replicated the findings of the FATF without considering the fundamental differences between countries that form part of the FAFT blacklist and others such as Mauritius which are simply on the latter’s monitoring list for the purposes of addressing identified weaknesses in its AML/CFT system. Thus, the Commission’s decision effectively combined countries under observation, such as Mauritius, with countries that are blacklisted by the FATF instead of segregating the two categories.
If the Commission had undertaken an independent assessment prior to blacklisting Mauritius, it would have found that Mauritius had immediately embarked on the implementation of the FATF’s action plan with specific deadlines to remedy the identified shortcomings. The FATF found that Mauritius was compliant with 53 out of the 58 recommended actions and the deadline for addressing the 5 remaining deficiencies was set to September 2021. Mauritius has obtained technical assistance from the EU AML/CFT Global Facility and the German Government through the German Development Agency (the “GIZ”) to support the implementation of the FATF action plan.
Mauritius has always adhered to international standards and norms, namely in terms of good governance, transparency and taxation. It has also incorporated the FATCA and CRS standards in its local legislations and ratified the OECD’s Multilateral Instrument. In addition the EU and OECD recently confirmed that Mauritius’ tax framework meets their required criteria and is in line with their respective standards. The Government of Mauritius continues to work tirelessly to implement its action plan at the earliest opportunity and the authorities of Mauritius seek to reassure the global investment community that it is working so as to exit the FATF and EU lists as soon as possible. Notwithstanding this setback, Mauritius remains a credible and trusted jurisdiction.