Government of Mauritius adopts firm stance further to EU’s inclusion of Mauritius in its list of High Risk third countries – AML/CFT
In a communique dated 02nd June 2020, the Prime Minister’s Office (‘PMO’) of the Republic of Mauritius responded vigorously to the EU’s inclusion of Mauritius in its list of High Risk third countries as regards AML/CFT (the ‘EU List’). The communique highlighted that the decision is unjustified and denounced numerous shortcomings in the EU’s decision of the 7th May 2020.
- Mauritius was not heard prior to the announcement: The PMO stressed on the fact that “Mauritius, was not given an opportunity to provide any explanation or make any representation to the Commission prior to its inclusion on the list” contravening Article 41 2 (a) of the EU’s own Charter of Fundamental Rights. Regrettably, Mauritius learnt of its inclusion in the EU List via a press article while taking cognisance of the Commission’s newly adopted methodology on the day of the publication of EU List itself.
- No autonomous assessment: The European Parliament had in the past highlighted that the European Commission had to carry out its own autonomous, comprehensive and unbiased process for identifying high-risk third countries. The EU relied exclusively on the Financial Action Task Force (the “FATF”) findings. In so doing, the Commission simply replicated the findings of the FATF. The Commission also failed to follow a transparent and resilient process actively incentivising affected countries to take decisive actions. In the case of Mauritius, there was absolutely no consultation or information prior to the publication of the EU List.
- Non-adherence to the fundamental principle of proportionality: The intrinsically binary nature of the EU’s freshly adopted methodology naturally leads to structural imbalances between countries of a same list. As a result, the EU List brings about consequences that are undeniably excessive when compared to the risk posed to the EU financial system by some countries according to the more nuanced classification of the FATF
The communique also provides details on the country’s effort to address the 5 remaining deficiencies (out of 58) in highlighting that the Government of Mauritius has “committed to implement the action plan one year ahead of the schedule which was initially agreed with the FATF.” It is also worth pointing out that 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.
It is apposite to mention that the Mauritian jurisdiction has systematically and voluntarily adhered to international regulations and governance principles of the highest standard. It has incorporated FATCA and CRS requirements into its domestic laws and has ratified the OECD’s Multilateral Instrument (MLI). Notwithstanding that the EU and the OECD have recently confirmed that the Mauritian tax regime is in conformity with their own governance standards. It is to be noted that other countries included in the EU List e.g. Ghana have also voiced out their concerns and made representations to the EU.
The PMO has reaffirmed that the Mauritius International Financial Centre is internationally recognised as a jurisdiction of choice and substance, established on the basis of a strong legal framework and supported by an independent Judiciary.
The Government of Mauritius has already initiated several actions towards the European Union and has once again reiterated its resolve to have Mauritius removed from the EU List on the basis of solid moral and legal grounds.