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Mauritius, which was previously known for being a tax haven, might be out of the FATF’s grey list this month, according to industry experts.
Global investors are predicting that following a week-long plenary meeting by the FATF on the analysis of Mauritius’ AML controls, the country may be out of the global financial watchdog’s grey list by the end of this month, shedding off its “money laundering haven” stigma.
In February 2020, Mauritius was named in the FATF’s grey list, blacklisted by the European Union soon after and had investment restrictions imposed by the Reserve Bank of India due to numerous AML red flags. Prior to this, international investors were known to opt for the country due to its tax advantage and low operational costs.
However, following a series of legal, regulatory, and operational changes in the last 20 months to combat money laundering and terrorism financing, the FATF is considering a re-rating of the country, stated Economic Times. According to three sources involved in the case, there is a high possibility that at the end of the week-long FATF plenary session, which began on October 17, Mauritius will be out of the grey list.
Senior bankers, lawyers and officials of market intermediaries and service providers who are in touch with authorities backed this point of view and said that ‘white-listing of Mauritius’ is expected this month.
“The inclusion of Mauritius would be a big plus for India-dedicated funds, especially those investing in Indian NBFCs… It would also help a number of investors who aren’t allowed to invest in a fund domiciled in a ‘FATF Grey List’ country,” said Anand Singh, member of a task force of Financial Services Commission.
Country’s that fail to have adequate anti-money laundering controls in place are named by the FATF under its grey list of high-risk jurisdictions. Once the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolving swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring.
According to an October 16 note from a senior compliance officer of a bank in Mauritius, the country was believed to be a few steps away from being delisted by the FATF. Once it steps out of the grey list, lesser scrutiny will be directed on the ‘beneficial ownership’ (BO) of Mauritius vehicles coming in as Foreign Portfolio Investor (FPI) and Foreign Direct Investor (FDI).
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