Mauritius on the European Union blacklist

May 21, 2020 - 12 min read


Note: This article was written at the time when Mauritius was placed on the EU blacklist. Today, Mauritius is not on the EU blacklist anymore. Click here to learn more.


During this period of confinement, Global Business has shown resilience. However, the European Commission’s decision to possibly place Mauritius on the list of high-risk jurisdictions has come as a severe blow to operators. We feel that the cast has been shadowed over the jurisdiction.

The former Managing Director of Sunibel Corporate Services, answers to the questions of Business Magazine for their dossier on the inclusion of Mauritius on the European Union’s list of high-risk jurisdictions.


There is a feeling that this decision is far from being justified, as in recent years, Mauritius has put in place a series of tax reforms, and its regulatory framework aims to disassociate the country from the portrayal of a letterbox type of jurisdiction. Your comments?

The image that comes to mind is someone who is down due to the pandemic situation and who is being kicked at. The world is facing difficult times and no country is being spared by the COVID-19’s repercussions on their health and economic systems. Cooperation and support is key in moments of worldwide crisis.

In addition, the Ministry of Financial Services and Good Governance has, through a communique, stated that Mauritius has obtained technical assistance from the AML/CFT Global Facility – funded by the EU – and from the German Government through the German Development Agency (GIZ) to support the implementation of the FATF action plan.

We heard a lot about the various steps that Mauritius has taken over the years, with others, from a tax, legal and AML/CFT perspective, still being implemented. Some of these measures are fully supporting BEPS (Base Erosion Profit Shifting), CRS (Common Reporting Standard) and FATCA (Foreign Account Tax Compliance Act) initiatives.

In 2019, the Companies Act 2001 was further amended to include filing obligations for Beneficial Ownerships detail, and the Financial Services Commission (FSC) issued the Administrative Penalties Regulatory Framework to be on par with international best practices, as a non-compliance deterrent that allows the regulator to impose financial sanctions on individuals and companies alike. These are two of the measures that Mauritius has already implemented to tackle some of the deficiencies previously identified by the ESSAMLG report.


If Mauritius is subjected to another attack, it is on the basis of the ESAAMLG’s Mutual Evaluation Report dating back to 2018, which has been considered by the FATF and now by the European Commission. Yet, the ESAAMLG has subsequently acknowledged that Mauritius complies with 35 out of 40 of its criteria. What may explain this chain of events and why has Mauritius’ voice never been heard?

It came as a surprise to everyone in the industry with high-level meetings being held by the stakeholders once the initial information was circulated in the media space. I sincerely hope it is a case of misunderstanding by the EU. Indeed, the Union does not have the most updated information on the commitment and progress made by Mauritius, following the ESAAMLG re-evaluation since the first report was out.

To put things into a wider perspective, it is also important to note that the Secretary-General of the Organisation of African, Caribbean and Pacific States (OACPS), H.E. Mr. Georges Rebelo Pinto Chikoti addressed an official letter on the 7th May to H.E. Mr. Gordan Grlić Radman, Croatian Minister of Foreign and European Affairs and Co-President of the ACP-EU Council of Ministers, on the unilateral publication of the EU’s black list on money laundering. He points out the lack of consultation or notice to the affected States (12 countries including Mauritius) and the timing of this action. Mr. Georges Rebelo Pinto Chikoti further requested the postponement of the adoption of the report “at the moment where the COVID-19 pandemic is affecting the economies of these States and, while both Member States of the EC and the OACPS are trying to find solutions to the crisis, the publication and the adoption of such a list would aggravate the health and economic crises, which are already affecting the concerned countries.”

It is important to note that we are not alone in making our voice heard and we have supportive friends including 79 countries, who form part of the OACPS and who have helped us in previous difficult situations.


The Financial Services Commission no longer has an appointed CEO. To what extent did this play against us?

The answer is simple: it is not related since measures to address the initial ESAMLG deficiencies were already being implemented as mentioned above. The FSC has a clear mandate in terms of operations and they are operating during the lockdown period delivering new licences, being responsive to daily queries and attending conference calls with its licensees.

One should not create controversy when there is none; it is counterproductive. We need to remain focused to deal with the current situation and ensure that we protect the interest of the Global Business sector, and much wider, the Financial Services sector of the country when other pillars of the economy are badly affected.


Even if Mauritius has until October to rectify the situation, the reputation of the jurisdiction is still taking a nasty blow. Will we be able to recover?

On the face of it, the use of the term “pose significant threats to the financial system of the Union” gives a poor overview of the situation. The reality of Mauritius is different since it has a robust AML/CFT system in place. There is always room for improvement and remedial actions have already been taken, as mentioned above. Clients often tell us that the details, information and documents required by the Mauritian AML/CFT laws are more demanding compared to other European countries.

Our financial ecosystem, including banks, consist of international brands that would not be operating in Mauritius if the jurisdiction was not transparent and internationally compliant. The Mauritius Bankers Association also issued a statement affirming that most banks in Mauritius applied standards which were above regulatory requirements and which adheres to the highest international standards.

Without any doubt, Mauritius will do its best to be on the compliance list of the EU, because the strategic deficiencies that were identified came from the 2018 ESAAMLG report, for which significant implementation measures have already taken place.


It is clear that Mauritius has to engage in intense lobbying towards the European Commission in the coming weeks. What do you recommend to make this communication strategy a success?

In my view, the first step is to provide the EU with accurate and up-to-date information. In that respect, both the FATF and the ESAMLG can be part of the process.

The country has always enjoyed a very good relationship with the EU and many projects have been developed together under the international cooperation. I believe the trust for doing things correctly, in a right and mutually beneficial manner, is there already.

It should also be noted that we are part of strong blocs such as OEACP, and we have the necessary support. Its Secretary General also condemns the EU’s new blacklist. We can play either our individual card or our collective card through the various organisations of which we are members.


At this time of unprecedented economic crisis, Mauritius may urgently need support. Does the fact that the European Union is considering placing us on its list of high-risk jurisdictions limit us in any step to borrow on the international market?

Personally and honestly, I don’t think so. Mauritius has a proven track record in terms of borrowing and repayment, and mobilisation of capital does not only happen in the EU.

There must be valid reasons for borrowing, and value creation (present and future) must be the determining factor. Many aspects have to be taken into consideration as, when we are talking about borrowing huge sums of money, we are also talking about borrowing on behalf of our children and future generations. In addition, it would be unwise to put down all the current economic and upcoming struggles around the world on the COVID-19 situation. The worldwide pandemic has been a mere catalyst to a prevalent economic situation worldwide, where the economic system’s unfairness in some parts of the world has been cracked open.

In the local context, certain truths will have to be taken into account. Do we want to repeat some of the mistakes of the current system by borrowing on behalf of future generations and leaving them to face a predictable crisis in the future?

Some facts:

  • a generous welfare state for all is not a birth right (can only be achieved when there is money and cannot be funded out of borrowed money);
  • not all companies have to be rescued because of an unsuitable business model that will not find its place in the new economic environment;
  • ability to pay must determine allocation of scarce social resources;
  • promotion of a non-discriminatory and fair societal system in all spheres of life.

It is now time to take bold steps towards a new model of society and to create history by laying new foundations for sustainable development.

Sonya Mohadeb, from C&S Secretarial, wrote an interesting article about a new world order from a gender equality perspective. She stated that with the world on the brink of an economic depression, we cannot take the same ingredients and start all over again, we have gone down that road before. Gender equality is about the Yin and the Yang and how they work together and deliver synergies across the board as a new possible successful and sustainable model.

It’s possible that after the lockdown, we may want to pick up where we left off as a company but the markings might not be there anymore. This is a sign that the business model may no longer be viable since consumer behaviour has fundamentally changed as priorities have been reassessed, turning some fixed costs into variable costs (working from home requires less office space, for example), and have moved towards digitisation.

McKinsey’s article “From surviving to thriving” on its part, provides some interesting insights into how we reimagine the revenue model, the acceleration of digital, tech and analytics and end-to-end value chain digitisation as a post COVID-19 return. Borrowed money must be invested in the public and private sector to digitise their operating model. As an example, this will enable an ecosystem that will be adaptable and agile. We must prepare now for the next pandemic or the next event that will change our habits.

Borrowed money must be used to create long-term sustainable models for food security and self-sufficiency. It was reported that ships containing Personal Protective Equipment (PPE) have been rerouted from their original destination to other countries. We see a rise in protectionism, territoriality and controlling exports of essential products by some countries. Imagine what would happen if there is to be a shortage of food on the world market, we need to be prepared, and it is a good way of creating employment by encouraging technology-based agricultural models/start-ups.

The borrowing is to be used to accelerate the development of the Fintech industry in Mauritius and to lay the foundations for a sustainable future.


Is there a relationship between the announcement by the major European nations that a capital outflow must be avoided in the post COVID-19 era and the European Commission’s decision to sanction Mauritius, which undeniably positions itself as a financial platform at the confluence of Africa and Asia?

It is indeed possible to make the connection. It is estimated that the contraction in Europe will be between 5% to 10% approximately, which is frightening. In 2018, Europe’s GDP was estimated around USD 18.8 trillion. Some countries on top of that have huge amount of debts, and investors in the debt market will ask themselves some serious questions over the coming months about the worthiness of their investments.

Investment fund flows are on the move because the world economic situation has not been stabilised yet but in any case, they will look for safer activity verticals and less risky countries to migrate to. The knock on effects of rising unemployment and need to finance generous welfare state programs in all shapes and sizes while there is a contracting economy will be a very hard task to achieve. On top of that, the demand for relocation by wealthy and ultra-wealthy individuals to migrate to other countries has been on the rise due to the pandemic situation. Now just imagine what will happen to the tax base of those countries.

From another perspective, Mauritius can be the ideal platform to invest into Africa for Europe, on projects such as food security amongst others. Both the French Civil Code and the common law, which provides stability and provides a favourable environment for structuring investments and repatriating funds, govern the country’s legal system.

Mauritius naturally is and will be the cornerstone for investments from Asia into Africa, as annual statistics show. The fact that the country is ranked 16th in terms of ease of doing business is a proof of its international attractiveness. Situated between the two continents, the island enjoys a favourable time zone that connects them. Mauritius is a recognised jurisdiction, initially for investments based in India for more than 20 years, and now for investments coming from Asia to the African continent.


In the post COVID-19 world, can the Mauritian jurisdiction become a major gateway for structuring investments to Africa?

We should not forget that currently, COVID-19 does not seem to have the same impact in Europe and the United States as it does in the African continent. We all have different immune systems, so we have to wait and see what happens in the upcoming months.

If we follow the current trend, it may be that emerging markets in some African countries offer better risk and return prospects than traditional markets. In a post COVID-19 world, investment flows would certainly flow to these countries and to Mauritius. As a privileged platform for doing business in Africa, this could benefit us.

With the digitisation of assets and transactions, Mauritius has set the goal of becoming a Fintech centre. It offers the opportunity to provide high value-added and innovative services and strengthens the attractiveness and competitiveness of the IFC for such activities.

The implementation of right practices, in consultation with international organisations such as the OECD, should make it possible to broaden the scope of digital exchanges. Fintech has the capacity to generate the interest of institutional and retail investors.

Mauritius is a renowned International Financial Centre (IFC), ranking first among African countries according to international indices, including in ICT development, good governance, ease of doing business, political and social stability and economic freedom, among others.



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