On the 16^th of July 2021, the Ministry of Finance released the Finance (Miscellaneous Provisions) Bill to implement the measures announced in the Budget Speech 2021-2022. Multiple changes have been brought to the Financial Intelligence and Anti Money Laundering Act (“FIAMLA”), notably new definitions added, some updated definitions and the setting up of a Core Group for AML CFT. Let’s dive in.

Definitions

Amendments to definitions under the Act can be summarized as follows:

• “Bank” has been extended to include “a licensee under the National Payment Systems Act 2018”.
• “Financial Institution” also means “an Institution or a person licensed/registered/authorised under the Securities Act 2005, other than an entity registered with that Act as a reporting issuer and which does not conduct any financial activities”.
• The definition of “Financial Institution” has also been reviewed to now include Qualified Trustees under the Trust Act 2001, instead of simply referring to the Trust Act 2001.
• “The Registrar of Companies” has also been included as part of the definition of the “Registrars”
• The Captive Insurance Act 2015 was removed from the definition of financial institution and replaced by Section 12 of the Private Pensions Schemes Act 2012.
• “The Core Group” means the Core Group for AML/CFT under Section 19AA of the Act.
• “Member Firm” definition was added as a person registered under Section 54 of the Financial Reporting Act 2004 other than an audit firm.

New and Amendments to Existing Sections of FIAMLA 2002

In addition to the definitions outlined above, the following sections are of note:

 

1. Under the Procedure Section:

“Notwithstanding any other enactment, where the investigations into a money laundering offence and the offence which generated the proceeds alleged to have been laundered have been conducted by different investigatory authorities, a single information may be lodged in the manner specified in subsection (2)”.

 

2. Part IV A was changed to Core Group for Anti-Money Laundering and Combatting the Financing of Terrorism and Proliferation and National Committee for Anti-Money Laundering and Combatting the Financing of Terrorism and Proliferation.

The National Committee is now required to keep “the Core Group informed on a regular basis of matters related to its functions”, as below. The National Committee can be assisted by a National Secretariat which can be constituted after the approval of the Minister.

With regards to the Core Group and National Committee, the following are of note:

The National Committee:

• The National Committee now consists of the supervisory officer of the Ministry or his representative who shall act as Chairperson.
• A representative of the Ministry is no longer included in the National Committee but it now included the Director of AML/CFT of the Ministry or his representative.
• Additional Members were added in the National Committee namely the representative of the Registrar of Companies and representative of the Mauritius Institute of Professional Accountants.

 

3. Core Group:

• The Core Group shall include

1. The Financial Secretary as chairperson.
2. The Governor of the Bank of Mauritius, as co-chairperson.
3. The Director-General of ICAC.
4. The Chairperson of FSC.
5. The Chairperson of the National Committee on AML-CFT.
6. A representative of the Ministry responsible for finance.
7. A representative of the Attorney General’s Office.
8. The Chief Executive of FSC.
9. The Director of FIU.

• The Core Group activities shall be:

1. The Group shall meet at least once monthly.
2. The Group shall regulate its meetings and proceedings.
3. The Group may, in the discharge of its functions, co-opt such other members. It can also be assisted by a Secretariat to be approved by the Minister to whom responsibility of finance is assigned.
4. 5 members will constitution a quorum at any meeting of the Group.

• Functions of the Core Group shall be:

1. Ensure effective implementation of the relevant competent authorities of FATF international standards on AML/CFT.
2. Make recommendations to Prime Minister on implementation, strategy and international developments pertaining to AML/CFT.
3. Decide on matters pertaining to implementation of AML/CFT standards which a relevant authority may refer to.
4. Ensure effective coordination and cooperation with the National Committee and all competent authorities (Supervisory authorities, Registrars and law enforcement authorities).
5. Perform acts conducive to fulfilment of its functions.

Members of MIPA:

The members of MIPA are now classified as “public accountant under the Financial Reporting Act only where they are sole practitioners, partners or employed professionals within member firms”.
Additionally, a new Item after Item 1 in the First Schedule, has been added to the table of regulatory bodies, namely “Member Firms under this Act includes MIPA established under the Financing Reporting Act”.
This has for purpose of aligning the meaning of a Member Firm with the Financial Reporting Act 2004.

Land Promoters, Property Developers and Real Estate Agents:

FIAMLA 2002 is now applicable to land promoters and property developers or real estate agents appointed on behalf of a client who, “in the course of a business, is involved in real estate transactions concerning the sale, exchange, purchase or lease of real estate.”

 

What This Means – Our Analysis

• The Bill cements the Government’s endeavour to increase regulatory scrutiny on industry stakeholders, by empowering regulators of financial services and DNFBPs to have greater oversight while at the same time having the power of conducting investigations.
• The overall objective is to align our jurisdiction to the 5 FATF recommendations which have a direct bearing on our status as an international financial centre of good repute. These changes are a natural continuation of the efforts of Mauritius to be removed from the FATF Greylist and ultimately the EU Blacklist.
• The National Committee on AML-CFT has now been reviewed to be chaired by the Supervising Officer of the Ministry responsible for the subject of money laundering, and to report to the newly established Core Group whose main raison d’être is to create a much higher level of regulatory cohesion than we have seen before. If the Core Group functions as it is intended, it should also create a higher level of accountability for the industry to regulatory authorities, as well as generate data on AML / CFT matters for the jurisdiction.
• The amendments brought to the Interpretation Section of the FIAMLA 2002 will ensure that Regulatory Bodies have extended powers, including increasing their regulatory scope such as in the case of MIPA, or ensuring that they are able to share and exchange critical information with other regulatory bodies, as in the case of the ROC.

How is your organisation faring on its AML / CFT journey? Have you ensured streamlined and effective processes or are you feeling overwhelmed by the pace of regulatory change? TCL has been dealing with matters of AML  / CFT in Mauritius since 2007. Get in touch if you would like to find out how to translate the theoretical seamlessly into the practical.