Mauritius removed from the European Commission’s high-risk third countries list
On Wednesday 13 February 2019, the European Commission reviewed its list of countries with permissive control in the fight against money laundering and terrorist financing. With necessary steps taken to ensure its financial sector meets international standards, the Commission took out Mauritius from its high-risk third countries list.
Money laundering and the financing of terrorism are financial activities that drive resources away from the economy and the society. Money laundering includes profit-making crimes such as fraud, bribery, drug trafficking, tax evasion. It also involves the intention to dissimulate the benefits of the crime.
To fight against money laundering and terrorist financing, the European Commission has come up with its own list of permissive jurisdictions. The objective of this list is to protect the European Union’s financial system from money laundering and terrorist financing. The high-risk third countries list names 23 countries that have strategic deficiencies in their Anti-Money Laundering/Combatting the Financing of Terrorism (AML / CFT) regimes.
Mrs Věra Jourová, Commissioner for Justice, Consumers and Gender Equality said: “We have established the strongest anti-money laundering standards in the world, but we have to make sure that dirty money from other countries does not find its way to our financial system. Dirty money is the lifeblood of organised crime and terrorism. I invite the countries listed to remedy their deficiencies swiftly. The Commission stands ready to work closely with them to address these issues in our mutual interest”.
The list is based on an analysis of 54 priority jurisdictions, prepared by the Commission in consultation with other Member States. To establish its list, the Commission assessed various factors. They include the level of existing threat, the legal framework as well as the controls put in place to prevent money laundering and terrorist financing risks. The Commission also monitors the effective implementation of these controls.
In November last year, Mauritius underwent OECD’s peer review as part of the organisation’s Base Erosion and Profit Shifting (BEPS) Action 5. The report specifies that Mauritius does not have any harmful practices in its tax regimes. With the successful implementation of the necessary controls and procedures to fight against money laundering and terrorist financing, the island nation is now out of the European Commission’s high-risk third countries list. These developments further reinstate the position of Mauritius as a transparent and reliable International Financial Centre of repute and substance.
The 23 countries on the high-risk third countries list are: Afghanistan, American Samoa, the Bahamas, Botswana, Democratic People’s Republic of Korea, Ethiopia, Ghana, Guam, Iran, Iraq, Libya, Nigeria, Pakistan, Panama, Puerto Rico, Samoa, Saudi Arabia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, US Virgin Islands, Yemen.
According to Min Zhu, Deputy Managing Director of the IMF: “Effective anti-money laundering and combating the financing of terrorism regimes are essential to protect the integrity of markets and of the global financial framework as they help mitigate the factors that facilitate financial abuse”.
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