The Anti-Money Laundering and Combatting the Financing of Terrorism Act 2020 (Act No. 5 of 2020) of Mauritius establishes a comprehensive legal framework to prevent money laundering and terrorist financing, imposing obligations on financial institutions and designated non-financial businesses.
Enacted on 23 June 2020, the Act aligns with international standards set by the Financial Action Task Force (FATF) and empowers key authorities like the Financial Intelligence and Anti-Money Laundering Act (FIAMLA) to enforce compliance through reporting, investigations, and penalties.
Mauritius Enacts Key Legislation
The Government of Mauritius passed the Anti-Money Laundering and Combatting the Financing of Terrorism Act 2020, known formally as Act No. 5 of 2020, on 23 June 2020. This legislation consolidates and updates prior laws to address evolving threats in financial crime. Available on the official Laws of Mauritius portal at https://lawsofmauritius.govmu.org, the Act spans multiple sections detailing definitions, offences, and supervisory mechanisms.
The Act repeals and replaces earlier provisions from the Financial Intelligence and Anti-Money Laundering Act 2002, integrating them into a unified structure. It came into operation via Legal Notice No. 104 of 2020, published in the Government Gazette. Prime Minister Pravind Jugnauth’s administration highlighted the law’s role in safeguarding Mauritius’s position as an international financial centre.
Core Provisions Defined
The Act provides precise definitions for key terms to ensure clarity in enforcement. “Money laundering” encompasses conduct where a person engages directly or indirectly in a transaction involving criminal property, knowing or suspecting its illicit origin. “Criminal property” includes proceeds from serious crimes listed in the First Schedule, such as drug trafficking, corruption, and terrorism.
“Terrorist financing” refers to providing or collecting funds by any means, in full or part, with the intention or knowledge that they support terrorist acts or terrorists. The Act applies to all persons within Mauritius, including financial institutions, virtual asset service providers, and designated non-financial businesses and professions (DNFBPs) like real estate agents and casinos.
As outlined in Section 2, the legislation covers a broad range of entities to close regulatory gaps. This includes lawyers, accountants, and trust service providers when performing certain transactions.
Principal Offences Outlined
Section 3 establishes money laundering as an offence punishable by up to 30 years’ imprisonment and a fine of up to 2 million rupees. The same penalties apply to terrorist financing under Section 4. Attempting, aiding, abetting, or conspiring to commit these offences carries identical sanctions.
The Act specifies three categories of money laundering: handling criminal property, entering into arrangements to facilitate handling, and acquiring, using, or possessing criminal property. For terrorist financing, it prohibits direct or indirect provision of funds, regardless of whether used for terrorist acts.
Extra-territorial jurisdiction applies under Section 5, allowing prosecution of Mauritius citizens or residents for offences committed abroad. This provision strengthens global compliance efforts.
Customer Due Diligence Obligations
Financial institutions and DNFBPs must perform customer due diligence (CDD) under Part III. Section 11 mandates identifying and verifying customer identity before establishing business relations or carrying out occasional transactions above 25,000 rupees.
Enhanced due diligence applies to politically exposed persons (PEPs), high-risk countries, and suspicious transactions. Simplified due diligence suffices for low-risk scenarios, such as listed financial institutions. Records must be maintained for at least seven years.
Section 15 requires ongoing monitoring of business relationships, including scrutiny of complex or unusual transactions. Failure to comply constitutes an offence.
Suspicious Transaction Reporting
Part IV imposes a duty to report suspicious transactions to the Financial Intelligence Unit (FIU). Section 23 states that reporting persons who know or suspect money laundering or terrorist financing must disclose without delay.
Tipping off the subject of a report is criminalised under Section 28, with penalties up to 10 years’ imprisonment. The FIU, housed within the Bank of Mauritius or Ministry of Financial Services, analyses reports and disseminates to law enforcement.
Legal privilege protects certain professionals, but suspicion overrides it if criminal conduct is involved.
Regulatory Framework Established
The Financial Intelligence and Anti-Money Laundering Council (FIAMLC), established under the 2002 Act, oversees implementation. Section 45 of the 2020 Act empowers FIAMLA to issue directives, conduct inspections, and impose administrative sanctions.
Supervisors like the Bank of Mauritius, Financial Services Commission (FSC), and Mauritius Revenue Authority (MRA) enforce compliance in their sectors. They can issue guidelines and remedial measures.
International cooperation is mandated under Part VII. Mauritius must exchange information with foreign counterparts and comply with UN sanctions lists.
Investigation and Enforcement Powers
Part V grants investigators broad powers. Section 32 allows authorised officers to enter premises, seize documents, and compel information. The Director of Public Prosecutions (DPP) institutes proceedings.
Asset recovery provisions in Part VI enable freezing, forfeiture, and confiscation of tainted property. Courts can make unexplained wealth orders if assets exceed legitimate income.
Penalties for non-compliance range from fines of 100,000 rupees to licence revocation. Corporate liability extends to directors and officers.
Alignment with Global Standards
Mauritius enacted the 2020 Act following FATF recommendations after a 2020 mutual evaluation. The legislation addresses prior deficiencies in risk assessment, supervision of DNFBPs, and targeted financial sanctions.
The FATF praised Mauritius’s framework in subsequent follow-ups, noting strengthened FIU independence and virtual asset regulation. Section 50 requires national risk assessments every three years.
The Act incorporates UN Security Council resolutions on terrorism financing, mandating immediate implementation of sanctions.
Implementation and Developments
Legal Notice No. 104 of 2020 operationalised the Act on 1 July 2020. FIAMLA issued guidance notes on CDD, PEPs, and virtual assets. The FSC updated its AML/CFT Handbook for capital markets.
Amendments via the Finance (Miscellaneous Provisions) Act 2023 refined definitions and penalties, responding to emerging risks like proliferation financing.
FIAMLA reported over 1,500 suspicious transaction reports (STRs) in 2022, leading to 50 disseminations to police. High-profile cases include the 2021 prosecution of a casino operator for failing CDD, fined 500,000 rupees.
In 2024, the FSC revoked licences of two money changers for AML breaches. Courts upheld convictions under the Act, such as a 2023 case where a banker received 10 years for laundering drug proceeds.
Challenges and Reforms
Despite progress, challenges persist in DNFBP supervision and real estate transparency. FATF’s 2024 review commended Mauritius but urged faster beneficial ownership implementation.
The government introduced the Virtual Asset and Initial Token Offering Services Act 2021, complementing the 2020 framework. National AML Strategy 2023-2025 targets high-risk sectors.
Global Context and Reputation
Mauritius maintains its FATF compliant status, avoiding grey-listing unlike neighbours. The Act bolsters investor confidence, with offshore banking assets exceeding $50 billion.
International bodies like the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) endorse Mauritius’s efforts. Bilateral agreements with India, UK, and South Africa facilitate information exchange.
Impact on Financial Sector
Banks like Mauritius Commercial Bank (MCB) and SBM Holdings invested in compliance systems post-2020. Transaction monitoring software adoption rose 40%.
DNFBPs formed self-regulatory organisations, such as the Mauritius Association of Real Estate Agents, to align with the Act.
Key Stakeholder Statements
As stated on the FIAMLA website, Director Jay Beeharry noted,
“The 2020 Act equips us with robust tools to combat financial crime effectively.”
FSC CEO Oodit Roydhav noted in a 2021 press release,
Attorney General Maneesh Gobin, during parliamentary debates, affirmed,
“This legislation positions Mauritius as a leader in AML/CFT globally.”
The Act remains foundational amid digital finance growth. Upcoming reforms focus on AI-driven laundering and cryptocurrency risks. Annual FIAMLA reports track efficacy, with 2025 priorities including cross-border cooperation.