Mauritius’ Financial Crimes Commission Act 2023 – White Collar Crime, Anti-Corruption & Fraud

International trade transactions play a crucial role in the
global economy, facilitating the exchange of goods and services
across borders. Nevertheless, the international trade system is
fraught with risks and vulnerabilities that can be used to commit
financial crimes. The Financial Action Task Force, an international
inter-governmental body that develops policies to combat money
laundering and the terrorist financing, defines trade-based money
laundering (TBML) as the “process of disguising the proceeds
of crime and moving value through the use of trade transactions in
an attempt to legitimise their illicit origins.” TBML is
achieved through various means including over-invoicing,
under-invoicing and misrepresentation of goods shipped among other
more complex fraudulent practices.

As a net importing country with a trade to GDP ratio of 98% in
2021, Mauritius also relies highly on trade transactions. The new
Financial Crimes Commission (FCC) Act, which received Presidential
assent in December 2023, is a key piece of legislation that will
enhance efforts to prevent trade-based financial crimes. The FCC
Act establishes a new independent body corporate to combat
financial crimes both domestically and internationally for cases
linked to Mauritius. The Prevention of Corruption Act, the Asset
Recovery Act, the Good Governance and Integrity Reporting Act and
Part II of the Financial Intelligence and Anti-Money Laundering Act
will be repealed and replaced by this new overarching legal
framework. This implies that the FCC will take over the functions
of the Independent Commission Against Corruption, the Asset
Recovery Investigation Division and the Integrity Reporting
Services Agency. The FCC will also be the depository for
declarations made under the Declaration of Assets Act¹.
As of March 2023, the FCC Act is pending proclamation by
Parliament.

According to the Act, the FCC, also referred to as “the
Commission”, is responsible for:

1. receiving and considering allegations or complaints of
   financial crimes and referring these for investigations;




2. detecting and investigating into financial crimes and other
   offences through various specialised divisions (see Figure 1);




3. educating the public to prevent financial crimes and any other
   offence under the FCC Act and the Declaration of Assets Act through
   its Education and Prevention Division;




4. prosecuting financial crimes and any other offence under the
   FCC Act and the Declaration of Assets Act; and




5. taking any other actions necessary to address financial crimes
   and other offences under the FCC Act and the Declaration of Assets
   Act.

Figure 1: Specialised Divisions of the Financial Crimes
Commission

Source: Author’s elaboration based on the FCC Act

The FCC Act requires the Commission to develop a strategic
vision and national policy to prevent financial crimes. It also
promotes collaboration with local, regional and international
bodies involved in combating financial crimes, such as banks, the
Financial Services Commission, the Egmont Group of Financial
Intelligence Units, the Asset Recovery Inter-Agency Networks of
Southern Africa, etc., particularly for:

1. identifying and tracking individuals suspected of involvement
   in financial crimes;




2. identifying and tracking the movement of proceeds and
   instrumentalities;




3. exchanging personnel and expertise;




4. investigating financial crimes with international
   implications;




5. conducting joint investigations with national and international
   authorities.

According to the FCC Act, the Commission must develop and
implement a system to monitor global financial crimes to detect
suspicious transactions and persons involved. In addition, the
Commission must maintain data, statistics, records and reports on
organisations, assets, proceeds, instrumentalities, properties,
documents and other items or assets involved in financial crimes.
The Commission is also mandated to investigate possibilities of
financial crime within a public institution and assess whether the
practices and procedures of public bodies aid in the detection and
prevention of financial crimes. Regarding public procurement, the
Commission has the power to oversee the execution of contracts
awarded by public authorities. Moreover, the Commission may
exercise oversight and supervision of the integrity systems within
public institutions and issue guidelines if necessary.

The Commission is formed by a Director-General, who will act as
Chairperson, and four Commissioners. The Commissioners are
appointed on a part-time basis by the President of Mauritius, upon
advice of the Prime Minister, following consultation with the
Leader of the Opposition. The Commissioners should demonstrate
expertise in law, banking, accountancy, finance, financial services
or fraud detection and serve under the terms set by the Prime
Minister. Commissioners are appointed for a three-year term and are
eligible for reappointment. The President, on advice of the Prime
Minister, also has the authority to terminate a Commissioner’s
appointment at any time if the latter:

1. is found guilty of misconduct, default or breach of trust while
   carrying out his/her functions;




2. has committed an offence of a nature that makes it appropriate
   for their appointment to be terminated.




3. is mentally or physically not fit to discharge of duties as
   Commissioner.

The FCC Act describes in detail the different acts that would
constitute corruption, money laundering offences, fraud, financing
drug dealing offences and specifies the penalties applied in each
case. This information is summarised in the table below.

Source: Author’s elaboration based on the FCC Act

Companies engaged in international trade must comply with laws
and regulations on financial crimes, particularly regarding money
laundering, to avoid the reputational risks and penalties involved
with non-compliance. It is important for companies trading from or
with Mauritius to get a good understanding of the FCC Act and to
establish the necessary framework to ensure compliance with the
legislation and promote ethical business practices.

International Economics Consulting Ltd (IEC) is an independent
consultancy firm working with national and international
development partners, governments, and the private sector to create
value and promote sustainable growth and development. With
extensive experience in trade policy, research, and negotiations,
IEC can support governments and businesses deal with unfair trade
practices and unforeseen consequences of free trade by providing
analytical expertise and support.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about specific circumstances.

References

The Financial Crimes Commission Act, Available at: https://mauritiusassembly.govmu.org/mauritiusassembly/wp-content/uploads/2023/12/act2023.pdf

WITS (2021), Mauritius Trade Indicators, Available at: https://wits.worldbank.org/CountryProfile/en/Country/MUS/Year/LTST/

FATF (2006), Trade Based Money Laundering, Available at: https://www.fatf-gafi.org/content/dam/fatf-gafi/reports/Trade%20Based%20Money%20Laundering.pdf.coredownload.pdf

Footnote

1. The Declaration of Assets Act, which entered into
force in June 2019, requires public sector officials including
members of the National Assembly, councillors of municipal
councils, mayors, chairpersons and chief executives of state-owned
enterprises and statutory bodies among others, to declare their
assets and liabilities (including those of the spouse and minor
children) with the Independent Commission Against Corruption
(ICAC).

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.