Mauritius

The laws in Mauritius are largely based on the Financial Intelligence and Anti-Money Laundering Act (FIAMLA), which requires obliged institutions to adopt a stringent and risk-based approach in detecting and preventing any form of financial crime, money laundering, terrorism financing, and proliferation financing. The obliged organizations are required to put in place internal controls; conduct obligatory customer due diligence and confirm the ultimate beneficial owner (UBO) at 25%; undertake continuous transaction monitoring, and keep compliance records for a minimum period of 7 years. There is a need to have a structure where institutions appoint an officer to act as the Compliance Officer (CO) to handle the daily compliance process, conduct business risk assessments, and arrange independent audits. On the other hand, there is a need for organizations to appoint an MLRO, who acts independently to evaluate the red flags and file suspicious transaction reports (STRs) to the FIU through the goAML system within 5 working days after detection of the anomaly. Failure to adhere to the requirements makes them susceptible to sanctions, which may include administrative sanctions of Rs 250,000 for structure violations, or criminal prosecution with penalties of Rs 10 million.

As per Section 17F of the Financial Intelligence and Anti-Money Laundering Act (FIAMLA) of Mauritius, it is mandatory for the reporting institutions to maintain all compliance documents for a minimum duration of 7 years. The maintenance of these documents within the defined time frame makes it necessary that CDD documentation, identification document records, and account records are retained for a minimum of 7 years from the end of the business relationship. Likewise, individual transaction records, account books, and STRs whether internal or external have to be maintained for a minimum of 7 years since the completion of the transactions or reporting of the transactions. The records must be retained in such a manner that transactions can be reconstructed instantly and FIU and supervisory authorities can easily retrieve the historical asset trails.

The requirements on Customer Due Diligence (CDD) and Know Your Customer (KYC) are part of regulatory framework in Mauritius as per Financial Intelligence and Anti-Money Laundering Act (FIAMLA), regulated by Bank of Mauritius (BoM) and Financial Services Commission (FSC). All clients must be identified and verified using the strict threshold of 20% in order to identify the Ultimate Beneficial Owner (UBO) in the corporate structure. The process involves the application of the risk-based approach where Simplified Due Diligence (SDD) is applied to low-risk clients, whereas Enhanced Due Diligence (EDD) is used to high-risk clients or Politically Exposed Person (PEP), including verification of his Source of Wealth and Funds. Moreover, ongoing monitoring and periodic reviews should take place, depending on the risk level, ranging from annually for high-risk clients up to every four years for low-risk clients, and keeping transactions and identification data for 5-7 years.

Suspicious Transaction Report (STR) under Mauritian law requires any suspicious activity that may be involved in money laundering, terrorist financing, and proliferation financing to be reported to the FIU using the electronic goAML system. STR is governed by the Financial Intelligence and Anti-Money Laundering Act (FIAMLA), which states that reporting entities should file an STR within a maximum period of 5 working days after determining reasonable grounds for suspicion by the Money Laundering Reporting Officer (MLRO); however, reporting within the day is highly recommended. STR is a very strict process that does not allow “tipping off” or informing the customer about reporting. The FIU can freeze funds for a maximum of 72 hours while doing analysis on transactions. Penalties for failure to report a suspicious transaction include a fine of MUR 1,000,000 and imprisonment for a term of 5 years, and in case of illegal disclosure, a fine of up to MUR 5,000,000 and a term of 10 years' imprisonment.