MIPA Presentation Summary of Points

Overview of Money
Laundering, Financing of
Terrorism and Proliferation
Offenses (summary)
Presented by Me. Mokshda PERTAUB
LLB(UK), LLM(France), PGD( India),Bar-at-Law,
Director of Lex Aquila TCS Ltd
© Lex Aquila Training and Consulting Services

Any unauthorized use such as distribution, copying, modifying, or, reprinting is not permitted.
What is Money Laundering?
• ML is the process by which criminals attempt to conceal the

true origin and ownership of the proceeds of criminal
activities.
• If successful, the criminal property can lose its criminal

identity and appear legitimate, meaning that criminals can
benefit from their crimes without the fear of being caught by
tracing their money or assets back to a crime.

Traditional Model of ML
Rather than getting caught up in trying to establish whether an activity relates to a particular phase of
the traditional model, the financial institutions should ask themselves – “do I know, suspect or have
reasonable ground to suspect that the assets in question are derived from criminal activities?” The
assets does not have to be linked or suspected to be linked to a specific act of money laundering

What is Mauritius blamed of?
• That we are too lenient with enabling black money to enter the country and the financial system.
• Mauritius is on:
• 1) Black List of EU ( OECD-GAFI report)
• 2) ESAAMLAG- ( Africa) Grey list-
• [The Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) is a Regional Body of 18 commonwealth
countries established in 1999. ESAAMLG became an associate member of FATF in June 2010. Its members are committed to the
implementation of the global standards to combat money laundering, financing of terrorism and proliferation]
• National Committee on AML/CFT has been set up to ensure compliance with the international recommendations.
• See FSC website.
• FATF Joint-Book Report recently sent ( Sept 2020) confidential
• Mauritius had until 30th September to take corrective measures. Laws amended, AML/CFT 2020 introduced,etc.
Enhanced due diligence and reporting to FIU introduced for DNFBPs
• However, we still remain in Black List of EU. We are being closely monitored.
• Repercussions on businesses, banking, lending, exports and imports, investments…and more!
The Law Governing ML and FT
• 1) FIAMLA 2002, FIAMLA regu 2018,UN Sanctions Act 2019,
AML/CFT Act 2020, Finance Act 2020, ARA,etc etc
• 2) Drug-dealing ss.39 ( money laundering)
• 3) predicate criminal offences of fraud ( cyber crimes,
embezzlement; fraud, forgery, embezzlement, hawala). Fraud
not defined in our law.
• 4) high value larceny ( greater than Rs 100,000)
• 5) Illegal bookmaking ( GRA- regulator)
• 6) Corruption and Tax Evasion ( MRA/POCA)
Changes brought in the Law and New Reporting
Obligations- enhanced due diligence
 Part IV Financial Intelligence and Anti-Money Laundering Act 2002 – Reporting and other measures to combat money laundering
 Section14A - Cash transaction reports : Every reporting person shall, within the prescribed time, report to FIU the prescribed
particulars of any transaction in excess of the prescribed amount.
 Section 14B - Electronic transfer of money to or from Mauritius : Where a reporting person sends money through electronic
transfer in excess of the prescribed amount out of Mauritius or he receives money in excess of the prescribed amount from outside
Mauritius on behalf, or on the instruction of, another person, he shall, within the prescribed period after the money was transferred,
report the transfer, together with the prescribed particulars, to FIU.
 Section 17G - Obligation to report currency transactions : A reporting person shall, within the prescribed time limit, submit a
report to FIU in the prescribed manner of any currency transaction in an amount equal to or above the prescribed amount, whether
conducted as a single transaction or several transactions that appear to be linked.
 PART VII THE UNITED NATIONS (FINANCIAL PROHIBITIONS, ARMS EMBARGO AND TRAVEL BAN) SANCTIONS
ACT 2019
 Section 39 - Reporting of suspicious information : Any information related to a designated party or listed party which is known
to a reporting person, shall be immediately submitted by the reporting person to FIU in accordance with section 14 of the Financial
Intelligence and Anti-Money Laundering Act; or any other person, transmitted forthwith by that person, in writing, to FIU.

Who should register to the FIU?
1. Financial Institutions licensed, registered or authorized under :
• Section 14, 77, 77A or 79A of the Financial Services Act;

• The Insurance Act, other than an insurance salesperson;
• The securities Act;
• The Captive Insurance Act;
• The Trusts Act
3. Law firm, foreign law firm, joint law venture, foreign lawyer, under the Law Practitioners Act
4. Attorney
5. Barrister
6. Notary
7. Dealer in Jewelry, precious stones or precious metals
8. Agent in Land and/or Building or local Government Act
9. Land promoter and property developer under the local government Act
10. Company Service Provider

MEASURES CONTAINED IN THE AML/CFT ACT 2020
• BO ( BENEFICIAL OWNERSHIP) INFORMATION (Disclosure
Exercise)
• Enhanced Reporting Obligations:
Stringent reporting standards on suspicious transactions have
been imposed across multiple sectors, including governmental
agencies and parastatal organisations.
A reporting person now has only five days from the discovery of
a suspicious transaction, or from the reasonable belief that a
suspicious transaction has been made, to file a Suspicious
Transaction Report to the Financial Intelligence Unit (“FIU”).

Regulators

Domestic Legal framework of AML/CFT
LEGISLATIONS AND REGULATIONS
 Financial Intelligence and Anti-Money Laundering Act (FIAMLA) 2002 – Updated 2019 & 2020
 AML/CFT (Miscellaneous Provisions) Act 2020
 FIAMLA Regulations 2018
 Financial Services Act 2007
 FSC Code on the Prevention of Money Laundering and Terrorist Financing – Updated 25 May 2017
 FSC Anti-Money Laundering and Countering the Financing of Terrorism Handbook – January 2020
 The Banking Act 2004
 Bank of Mauritius Guideline on AML-CFT – Updated 15 January 2020
 Prevention of Corruption Act 2002 (POCA)
 Prevention of Terrorism Act 2002 (POTA)
 Convention for the Suppression of the Financing of Terrorism Act 2003
 United Nations (Financial Prohibitions, Arms Embargo and Travel Ban) Sanctions Act 2019
 Dangerous Drug Act 2000
 Income Tax Act 1995 (Section 123D)
 Asset Recovery Act 2011
 The Companies Act 2001
 Biological and Toxic Weapons Convention Act 2004
 Chemical Weapons Convention Act 2004
 Gambling Regulatory Authority Act 2007
 Customs Act

Financial Intelligence and Anti-Money Laundering Act
2002
Contents of the Legislation:
- Inter Alia;
- Defines “Crime” under the Act (Section 2 FIAMLA)

- Defines “Transaction” under the act (Section 2 FIAMLA)
- Defines and establishes the elements of the offense of ML. (Section 3 FIAMLA)
E.g; Money Laundering:

(1) Any person who –
(a) engages in a transaction that involves property which is, or in whole or in part directly or indirectly
represents, the proceeds of any
crime; or [engages means no need for conviction]
Money Laundering may have overlapping definitions; for example under the Dangerous Drugs Act

New offence under FIAMLA
• Concealment of black money-new offence
• Disguising and transferring-e.g. through money changers (
under the radar anyway-Shibani finance case)
• Converts- e.g. through dentists- making of golden and
platinum teeth
• Derived and realized- i.e. what comes out of the black money-
clean purchases, etc.[ DDA]
• Bring into Mauritius even if legal elsewhere but illegal here-
e.g. cannabis sale legal in Holland – proceeds illegal in
Mauritius
FIAMLA-cash payment limitation
• Sec 5. Limitation of payment in cash
• (1) Notwithstanding section 37 of the Bank of Mauritius Act 2004,
but subject to
• subsection (2), any person who makes or accepts any payment in

cash in excess of 500,000 rupees or an equivalent amount in
foreign currency, or such amount as may be prescribed, shall
commit an offence.
• Exception: s. 37 BOM Act

Reporting obligations of companies and other
stakeholders under FIAMLA – Applicable for Accountancy
Firms

REPORTING OBLIGATIONS: CRIMINAL SANCTIONS s14
FIAMLA Suspicious transaction reporting obligation
Main Provision Obligation Applies to Protection to person Liability

reporting
S14 FIAMLA On becoming aware Bank etc (bank, financial Not disclosable or Criminal offence to fail to
‘suspicious transaction’ institution, cash dealer admissible in any court make a report
report to FIU as soon as proceedings (Fine Rs 1 million)
practicable and within 15 Or member of a relevant S15(3) FIAMLA (Imprisonment 5 years)
days profession or occupation S19(1)(a) FIAMLA
(unless privileged) s14 (1) Immunity from suit if
& (2) FIAMLA reported in good faith
S16(2) FIAMLA

Reporting of Suspicious Transaction
Any financial institution or any director or employee thereof who knowingly or without
reasonable excuse fails to:
(i) supply any information requested by the FIU under section 13(2) or 13(3) of the FIAMLA within the date specified in the request;
(ii) make a report under section 14 of the FIAMLA; or shall on conviction be liable to a fine not exceeding one
The legislation provides immunity
million rupees and to imprisonment for a term not exceeding 5 years.
from suit for reports made in
good faith, even though the
suspicion ultimately proves not to (iii) verify, identify or keep records, registers or documents, as required under section 17 of FIAMLA shall on
be well founded. conviction be liable to a fine not exceeding 10 million rupees and to imprisonment for a term not exceeding 5 years.
Failure to comply with request for information by FIU (s13(2) &
s13(3) FIAMLA)

UN Sanctions Act 2019
PART 2

The United Nations (Financial Prohibitions, Arms
Embargo and Travel Ban) Sanctions Act 2019
The United Nations (Financial Prohibitions, Arms Embargo and Travel Ban) Sanctions Act
2019 (the Sanctions Act) was enacted on 29 May 2019 to allow the Government of Mauritius to
implement targeted sanctions and other measures imposed by the United Nations Security
Council (UNSC) under Chapter VII of the Charter of the United Nations (UN) in response to
threats to the peace, breaches of the peace and security, including terrorism, the financing of
terrorism and the proliferation of weapons of mass destruction.
So basically, there are 2 dimensions in which the Sanctions Act exists:
1. International Law
2. National Law
The Sanctions Act has been enacted domestically, to enforce the existing International Law Doctrine
under Chapter VII of the UN Charter ensuring compliance at International Law level.
The Domestic Law has also been developed to reflect the recommendations of The Financial Action
Task Force (FATF); require States to implement targeted financial sanctions related to
proliferation financing under Recommendation 7.
Rationale
• As an international financial centre Mauritius needs to be committed to
protecting its financial services sector from abuse by illicit actors engaging
in proliferation financing and other proliferation efforts.
• The Sanctions Act provides the legal framework for the implementation of UN
sanctions as adopted by the UNSC under Chapter VII of the UN Charter. This
legislation also implements the requirements of the FATF regarding targeted
financial sanctions under Recommendation 7.
• All natural and legal persons in Mauritius should exercise caution and
vigilance in order to ensure that they do not in any way whatsoever support
individuals or organisations which are subject to United Nations Security
Council (UNSC) proliferation-related sanctions under UNSC Resolutions
1718 (2006) related to the Democratic People’s Republic of Korea (DPRK),
2231(2015) related to the Islamic Republic of Iran, and their successor
resolutions.
Resolution 2231 (2015) on Iran Nuclear Issue
Background
• United Nations Security Council Resolution 2231 was a 20
July 2015 resolution endorsing the Joint Comprehensive Plan
of Action on the nuclear program of Iran.
• It sets out an inspection process and schedule while also
preparing for the removal of United Nations sanctions
against Iran.
• The 15 nations on the Security Council unanimously endorsed
the resolution, which had been negotiated by the permanent
members of the United Nations Security Council—
China, France, Russia, the United Kingdom, and the United
States—plus Germany, the European Union, and Iran.

Resolution 1718 (2016) on North Korea Sanctions
• United Nations Security Council Resolution 1718 was adopted

unanimously by the United Nations Security Council on October 14,
2006. The resolution, passed under Chapter VII, Article 41, of
the UN Charter, imposes a series of economic and
commercial sanctions on the Democratic People's Republic of
Korea (the DPRK, or North Korea) in the aftermath of that nation's
claimed nuclear test of October 9, 2006.
• UNSCR 1718 banned a range of imports and exports to North Korea
and imposed an asset freeze and travel ban on persons involved in
the country’s nuclear program. This trade ban included “battle
tanks, armoured combat vehicles, large caliber artillery systems,
combat aircraft, attack helicopters, warships, missiles or missile
systems.” The resolution also prohibited imports of luxury goods to
the country.
SUPERVISION- NATIONAL SANCTIONS
SECRETARIAT
• The NSSec is the focal point for UN sanctions related matters, including coordinating
and promoting effective implementation of the obligations under the UNSC resolutions
in Mauritius.
• The NSSec has, under section 18(1) of the Sanctions Act, the responsibility to
immediately give public notice of any changes to any UN sanctions lists, including the
1718 and 2231 Lists. This includes new designations, changes to existing designations,
and removed designations. The process for dissemination and consultation of sanctions
lists is detailed in Section 4 of these guidelines.
• As outlined in Section 40(3) of the Sanctions Act, individual supervisory authorities shall
supervise and enforce compliance by reporting persons over whom they exercise
supervisory control or oversight with the requirements imposed under the Sanctions Act.
• Supervisory authorities may develop additional guidelines relevant to the reporting
persons they supervise. It is important that reporting persons consult both these
guidelines issued by the National Sanctions Secretariat, as well as any guidance issued
by their supervisory authority.
National Sanctions Committee ( s.4)
• S. 7 of the Sanctions Act establishes the National Sanctions Secretariat (NSSec) which is the
focal point for UN sanctions related matters, including targeted financial sanctions related to
proliferation financing.
• It supports the work of the National Sanctions Committee (NSC) which is established under
section 4 of the Sanctions Act.
• Among others, the NSC is the competent authority for;
a. Proposing to the relevant UN Sanctions Committee targets for designation;
b. Making decisions in relation to the declaration of a person or entity pursuant to UNSC
1373(2001);
c. Coordinating and promoting effective implementation of the obligations under the United
Nations Security Council Resolutions in Mauritius;
d. Coordinating the development of, review and implement national policies and activities for
the effective implementation of UNSC Resolutions;
e. Coordinating international cooperation in the cross-border implantation of the UNSC
Resolutions between Mauritius and other countries and foreign counterpart agencies; and
f. Approving guidelines developed by the National Sanctions Secretariat.

Reporting Persons as per FIAMLA and also
applicable to Sanctions Act
• 1. Banks and other financial institutions licensed by the Bank of Mauritius or the Financial
Services Commission;
• 2. a credit union;
• 3. a professional accountant, public accountant and member firm under the Financial Reporting
Act;
• 4. a law firm, foreign law firm, joint law venture, foreign lawyer, under the Law Practitioners
Act;
• 5. an attorney;
• 6. a barrister;
• 7. a notary;
• 8. a person licensed to operate a casino, a hotel casino, as a horse racing organiser,
• the Mauritius National Lottery, a limited payout machine, a sweepstake, a local pool promoter,
the agent of a local pool promoter, a gaming house, a gaming machine, as a bookmaker and
interactive gambling under the Gambling Regulatory Authority Act;
• 9. a dealer in jewellery, precious stones or precious metals;
• 11. an Agent in land and/or building or Estate Agency under the Local Government Act;
• 12. a Land Promoter and Property Developer under the Local Government Act;
• 13. a company service provider.
Proliferation as defined in Domestic Law
• In Mauritius:
“proliferation” is defined under s.2 of the Financial Intelligence and
Anti-Money Laundering Act 2002 (FIAMLA) and means;
a. the manufacture, production, possession, acquisition, stockpiling,
storage, development, transportation, sale, supply. transfer, export,
transhipment or use of –
i. nuclear weapons
ii. chemical weapons
iii. biological weapons
iv. such materials, as may be prescribed, which are related to nuclear
weapons, chemical weapons or biological weapons; or
v. the provision of technical training, advice, service, brokering or
assistance related to any of the activities specified in paragraph (a).
Proliferating Actors – how they operate
Proliferating actors who have been designated or listed by the UNSC
use complex networks of front companies and diversion techniques
borrowed from the world of money laundering to access the global
financial system and circumvent increasingly stringent counter-
proliferation financing (CPF) sanctions measures.
However, whereas money laundering is a circular process deployed
by criminals to conceal the illicit origin of the proceeds of crime,
sanctions are about the individuals to whom funds are made
available (designated persons and entities) or the purposes for
which they are being used (proliferation).
It is therefore important that proliferation financing is considered as
distinct from other types of financial crime and other types of
sanctions compliance.

Recommendation 7 of the FATF
Standards
• FATF Recommendation 7 - requires countries to implement proliferation
related targeted financial sanctions (TFS) made under UNSC Resolutions
without delay.
“Countries should implement targeted financial sanctions to comply with
United Nations Security Council resolutions relating to the prevention,
suppression and disruption of proliferation of weapons of mass
destruction and its financing. These resolutions require countries to
freeze without delay the funds or other assets of, and to ensure that
no funds and other assets are made available, directly or indirectly,
to or for the benefit of, any person or entity designated by, or under
the authority of, the United Nations Security Council under Chapter VII
of the Charter of the United Nations.”
With the enactment of the Sanctions Act under domestic law, the
Government possesses the legal capacity to implement TFS imposed
by the UNSC.

Mauritius TFS prohibitions – Domestic Law-s.23
• Under Section 23 of the Sanctions Act, no person shall deal with the funds or other
assets of a listed party, including all funds and other assets :
a) that are owned or controlled by the listed party,
b) that are wholly or jointly owned or controlled, directly or indirectly, by the listed
party;
c) that are derived or generated from funds or other assets owned or controlled, directly
or indirectly, by the listed party, and
d) Funds or other assets of a party acting on behalf of, or at the direction of the listed
party.
• Under Section 24, no person shall make any funds or other assets or financial or other
related services available, directly or indirectly, or wholly or jointly, to or for the
benefit of :
a) A listed party;
b) A party acting on behalf, or at the direction, of a listed party; or
c) An entity owned or controlled, directly or indirectly, by a listed party.
NB: TFS provisions are applicable to persons and entities specifically listed on the
1718 or 2231 List, as well as those who are:
1. Acting on behalf of or at the direction of listed persons or entities.
2. Owned or controlled
Any unauthorized use such persons
by listed as distribution,or entities.
copying, modifying, or, reprinting is not permitted.
Implementation by Reporting Persons
• As stated in Section 41 of the Sanctions Act, reporting

persons are required to implement internal controls and other
procedures to effectively comply with their obligations under
the Act, including counter proliferation financing obligations.
• The Sanctions Act also establishes several reporting
obligations and authorisation mechanisms which reporting
persons must implement. The internal controls and procedures
required for implementation are outlined in this section.

Sanctions Screening
• Sanctions apply to all clients and transactions, and there is no
minimum financial limit or other threshold for when to conduct
screening.
• Section 25 of the Sanctions Act requires that when a party is

listed as a listed party, every reporting person shall, immediately,
verify whether the details of a listed party match with the
particulars of any customer, and if so, to identify whether the
customer owns any funds or other assets in Mauritius.
• All customers and transactions must therefore be screened against

sanctions lists for potential matches.

Transaction Monitoring
Each incoming and outgoing transaction should similarly be screened
for a potential match with sanctions lists. Screening prior to
completing a transaction is known as real-time screening and is the
most widely used.
In transaction monitoring, some of the most common screening data
points include:
• Parties involved (remitter, beneficiary, other financial institutions
involved in the transaction, intermediaries)
• Vessels and International Maritime Organization (IMO) numbers
(unique identifier number assigned to each vessel) – especially
relevant for DPRK.
• Bank names, bank identifier codes (BIC) and other routing codes
• Free text fields (e.g. payment reference).

Suspicious Transaction Reports
Section 39 of the Sanctions Act states that any information related to a listed party shall be
immediately submitted by the reporting person to the FIU or by any other person in writing to the
FIU.

Sanctions evasion techniques
• Common sanctions evasion techniques used by proliferators include:
• a. The use of aliases and falsified documentation to hide involvement of
listed party.
• b. Bank accounts owned by nationals not from a proliferating country,
who act as financial representatives on behalf of listed parties from the
proliferating country.
• c. Offshore, front and shell companies to hide beneficial ownership
information, and the involvement of listed parties.
• d. Listed parties entering joint ventures with non-listed companies.
• e. Use of diplomatic staff bank accounts, on behalf of listed parties and
proliferating countries.
• f. Use of virtual currencies by listed parties to circumvent the formal
financial system and evade sanctions.
• g. Conduct cyber-attacks against financial institutions and crypto
currency exchanges to raise funds and evade sanctions.

MIPA SANCTIONS POLICY AND
OPERATIONAL COMPLIANCE
PART 3

Addressing Non – Compliance/MIPA Inspections
In conducting its inspection activities the MIPA may identify non-compliance with AML/CFT
obligations.
The AML/CFT Department will determine the most appropriate response to non-
compliance and coordinate interventions with the entity. Non-compliance issues are
identified in the following ways.
They are:
• identified by voluntary information on non-compliance received; or
• identified as a result of the compliance inspection.
If non-compliance is detected during an inspection, the inspection team will take the
following steps:
• define the areas of possible non-compliance;
• retain copies of records in support of the determination of non-compliance; and
• discuss the findings with the Senior Management.
If areas of vulnerability or breaches of compliance are detected, the inspection team will
develop solutions and recommendations to help the entity meet its obligations.

Non-compliance with Legislative Measures part 1
• Non-compliance with Mauritius’s respective legislative measures should be
identified in an inspection findings letter. If AML/CFT officers identify the
potential need to revise a legislative requirement, this should be documented.
Completed forms must be submitted to the appropriate Head for review.
• Article 19H (1) (d) of FIAMLA outlines the following options to address non-
compliance:
(i) issue a private warning;
(ii) issue a public censure;
(iii) impose such administrative sanction as may be prescribed by the regulatory
body;
(iv) ban, where the regulatory body has licensed or authorised the member to
conduct his business or profession, from conducting his profession or business
for a period not exceeding 5 years;
(v) revoke or cancel a licence, an approval or an authorisation, as the case may
be.

Non-compliance with Legislative Measures part 2
• All instances of non-compliance should result in a request for

the identified deficiencies to be addressed by submitting a
report on corrective measures pursuant to Article 19H 1(c) of
FIAMLA. The entity should provide an attestation that the
non-compliance has been addressed within a 21 to 28-day
timeframe. The timeline for addressing the deficiency should
be agreed upon with the Senior Management.

Directions, Administrative Sanctions and Criminal Prosecutions
• When detecting non-compliance, the MIPA must determine whether a direction,

an administrative sanction or criminal prosecutions will be pursued.
Issuing written directions
Subject to Subsection 19L (1) (a and b) of FIAMLA, the MIPA may give the entity
written direction when it has reasonable grounds to believe that the entity has
failed to take measures outlined in the FIAMLA or UN Sanctions Act and related
regulations. A written direction should be issued when a request to address non-
compliance has not been respected.
Even when an administrative sanction is applied or a reference for criminal
prosecution is made, a direction should nonetheless be issued to ensure that
the non-compliance identified has been addressed. The written direction should
specify the time by which it shall be complied with.
Non-compliance with a direction is subject to criminal prosecution.

Determining whether an administrative sanction is warranted
The AML/CFT officer makes a recommendation to the Senior Management as to whether

an administrative sanction should be applied. The following factors are considered
when making this recommendation:
• Nature of the failure, violation, or contravention (whether inadvertent, wilful, or the
product of negligence)
• Length of time in which the failure, violation, or contravention continued
• Prior compliance history of the entity (all types of compliance considered)
• Prior compliance history with regard to this type of failure, violation, or contravention
• Whether criminal sanctions have been paid for the same failure, violation, or
contravention
• Disciplinary action taken against persons found to have committed the failure, violation,
or contravention
• Nature of corrective action, if any, taken against the entity that committed the failure,
violation, or contravention
• Economic impact of the penalty to the person(s) or entity that committed the failure,
violation, or contravention
• Existence of concealment, fraud, and/or intentional falsification.

Determining Amount of an
administrative sanction
When the Senior Management determines that an administrative

sanction is warranted, he/she determines the amount of the
penalty using the following grid.

Penalty Ranges

Issuing a decision notice
If the MIPA receives representation from an entity regarding a notice of
administrative sanction, the compliance officer in consultation with the Senior
Management will consider the representations made by the person or entity.
The Senior Management will make a recommendation to the. The H AML team.
Senior Management will determine within 21 days whether to impose or revoke
the penalty.
The Senior Management will give the person or entity a decision notice which
includes:
a) its decision not to impose a penalty; or
b) its decision to impose a penalty and
—
i. the amount of the penalty;
ii. the reasons for its decision; and
iii. the right to appeal to the Review Panel within 21 days of the decision notice
being sent.

AML/ CFT INVESTIGATION ARCHITECTURE IN MAURITIUS
DCP (C)
EXTERNAL
OIC-officer in AGENCIES
charge
AML/ CFT
UNIT
ADMIN/ DATA INTELLIGENCE

INVESTIGATIVE
MANAGEMENT OFFICERS
TEAMS
SECTION
(AML/ CFT/OTHER
TEAMS)
RESEARCH
MONITORING
DATA AND
COLLECTION REPORT
ANALYSIS
Investigation agencies
• 1) Police- [AML/CFT unit, Crime intelligence Unit]
• 2) FIU ( AML/CFT)
• 3) ICAC ( corruption, ML)
• 4) International agencies ( Egmont,etc)
• 5) FSC ( designated non-financial institutions & global
business)
• 6) MIPA ( accountants’ regulator)
• 7) BOM ( banks and financial institutions)
Improved AML/CFT Workflow

AML/CFT AUDIT COMPLIANCE BEST PRACTICES FOR
ACCOUNTANTS
AML Program
• In order to remain in compliance, accountancy firms must have
developed an internal AML program. The Four Pillars of an AML
program are as follows:
• A designated compliance officer and Money Laundering Reporting
Officer (MLRO)
• Development of internal policies, procedures and controls
• Ongoing, relevant training of employees
• Independent testing and review
• A compliance officer must be appointed to manage the AML
compliance. This officer manages communications with senior
management and all regulatory authorities involved.

AML/CFT AUDIT COMPLIANCE BEST PRACTICES FOR
ACCOUNTANTS
AML Audit
• Here is what to expect with an AML audit.
• A review of the written AML compliance policies
• Testing of the AML compliance procedures
• Customer Identification Program (CIP) review
• Review of customer transactions and client files
• Evaluation of employee training
• Review of automated monitoring systems
• Review of reporting procedures
• Conducting an AML audit on a yearly basis helps to ensure a firm's
compliance with FIAMLA and the AML/CFT laws as well as helping to
hinder the growing threat of terrorism and organized crime.

Internal Controls – Accountancy Firms
You shall develop and implement policies, controls and procedures that will enable you to
effectively manage and mitigate identified risks on the basis of the results of your
money laundering/terrorism financing risk assessment.
The following elements shall be included in your internal controls:
• The appointment of a Money Laundering Reporting Officer (MLRO) and Compliance

Officer at the appropriate level /senior level with sufficient expertise as may be
required.1
• Programs for assessing risk related to money laundering (see section below)
• The development and application of written compliance policies, controls and
procedures that manage and mitigate identified risks
• Implementation and documentation of an ongoing compliance training program
• A documented audit of the effectiveness of policies, controls and procedures, training
program and risk assessment
• Ensure that your foreign branches and subsidiaries observe AML/CTF measures
consistent with FIAMLA.

Best Practices and Legal Obligations – Key Concepts
Analysis (CDD, KYC, Risk Assessment)
• Know Your Customer (KYC) refers to the process institutions use to verify the
identities of their customers and ascertain what fraud risks they may pose. The
premise is that knowing your customers — performing identity verification,
reviewing their financial activities, and assessing their risk factors — can keep
money laundering, terrorism financing and other types of illicit financial
activities in check.
• Globally, the European Union’s (EU) General Data Protection Regulation (GDPR)
regulations took effect in May 2018. GDPR significantly restricts how institutions
acquire and manage customer data. These regulations, along with the EU’s
Second Payment Services Directive (PSD2), create additional hurdles for
organizations in meeting anti-money laundering (AML) and CDD procedures
within the KYC compliance framework.
• KYC is mandated for some organizations — primarily financial institutions — but
for other businesses that voluntarily implement KYC procedures, it’s an
important signal that the business is trustworthy and cares about protecting its
customers.

PART 4 – Amendments to FSC
Guidelines
31st March 2021

INTRODUCTION
Further to the first AML/CFT supervisory cycle 2020-2021, the FSC
has updated the AML/CFT Handbook to assist financial institutions
in conducting an effective AML/CFT Independent Audit and in
implementing an adequate Business Risk Assessment.
The AML/CFT Handbook has now been amended to include –

(1) a new chapter on Independent Audit – “Chapter 13” with the
main objective to provide the financial institutions with
interpretive guidance on how to conduct a successful
independent audit; and
(2) additional provisions in Chapter 4 – “Risk Based Approach” with
the aim of assisting financial institutions in implementing an
adequate business risk assessment.
Independent Audit
• Regulation 22(1) (d) of the FIAML Regulations 2018 requires
that financial institutions shall have in place an audit function
to review and verify compliance with and effectiveness of the
measures taken in accordance with the FIAMLA and FIAML
Regulations 2018.
• In line with international best practices, the independent
audit exercise should be risk-based. Independent audit is the
financial institution’s final line of defence, therefore, it is
vital to ensure that the AML/CFT independent audit is tailored
to the financial institution’s risks.

Scope of independent audit
Every independent audit should mandatorily test compliance in the following
non-exhaustive areas:
• AML/CFT policies and procedures;

• Internal Risk Assessment;
• Risk Assessment on the use of third-party service providers (Outsourcing);
• Compliance Officer function and effectiveness;
• MLRO function and effectiveness;
• Implementation and Effectiveness of Mitigating Controls, including customer
due diligence and enhanced measures;
• AML/CFT Training;
• Record Keeping Obligations;
• Targeted Financial Sanctions; and
• Suspicious Transaction Monitoring and Reporting

Assessing the “independence” of the audit professional.
• The financial institution must be satisfied and able to
demonstrate that the person or the firm undertaking the audit
is adequately independent from the area of the business
function responsible for risk assessment and AML/CFT
programme, and ensure that there are no conflicts of interest.
• Therefore, the independent audit may be conducted by an in-

house audit professional not involved in the development and
implementation of the AML/CFT programme or outsourced to
external accountants or independent consultants duly
regulated or registered by relevant competent authorities.

Audit outcome, report and recommendations
The audit will result in a signed and dated written report by the audit
professional to ensure that the audit programme:
• covers all relevant components of the compliance programme as

required under FIAMLA and relevant regulations;
• was adequate and effective throughout a specified period;
• identifies areas where the financial institution did not meet minimum
legal or regulatory standards, and include actions that are required to
rectify non-compliance as well as identifying areas for recommended
changes in behaviour and practice to improve the effectiveness of the
AML/CFT programme’s implementation. This includes an indication of
where there are potential failings and a recommended course of action.

Filing to the Commission
Financial institutions are not required to file their independent
audit report with the Commission periodically.
However, the financial institution shall file its independent
audit report for a specified period, upon the request of the
Commission.
All independent audit documentation, including, inter alia,
work plan, audit scope, transaction testing, should also be
properly documented and shall be made available to the
Commission upon request.


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Overview of Money

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• ML is the process by which criminals attempt to conceal the

• If successful, the criminal property can lose its criminal

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• Section 14, 77, 77A or 79A of the Financial Services Act;

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- Defines “Crime” under the Act (Section 2 FIAMLA)

E.g; Money Laundering:

crime; or [engages means no need for conviction]

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• subsection (2), any person who makes or accepts any payment in

• Exception: s. 37 BOM Act

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Main Provision Obligation Applies to Protection to person Liability

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So basically, there are 2 dimensions in which the Sanctions Act exists:

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• United Nations Security Council Resolution 1718 was adopted

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• As stated in Section 41 of the Sanctions Act, reporting

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• Section 25 of the Sanctions Act requires that when a party is

• All customers and transactions must therefore be screened against

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• All instances of non-compliance should result in a request for

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• When detecting non-compliance, the MIPA must determine whether a direction,

Issuing written directions

Non-compliance with a direction is subject to criminal prosecution.

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The AML/CFT officer makes a recommendation to the Senior Management as to whether

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When the Senior Management determines that an administrative

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ADMIN/ DATA INTELLIGENCE

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The following elements shall be included in your internal controls:

• The appointment of a Money Laundering Reporting Officer (MLRO) and Compliance

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