As advanced in a previous article, in 2019, the government has made several changes to regulations involving the offshore sector to consolidate Mauritius as a fintech hub of excellence in the Indian Ocean. Below are more regulatory updates.
Financial Services (Global Business Corporations) Rules 2019
The FSC has amended several regulations related to Global Business Corporations in 2019. These FSC rules were made under sections 71 and 93 of the Financial Services Act 2007. The changes entail the following:
Previously, it was mandatory for corporations to apply for a global business licence or an authorised company on if the majority of its shares are held or controlled by someone who is not a citizen of Mauritius and if said corporation proposes to conduct or conducts business principally outside Mauritius or with such category of persons as may be specified in the FSC Rules.
However, on the 1st of January 2019, the FSC has issued new rules. These are in accordance to the government’s objectives of enhancing business processes. The regulations advance that as from the stipulated date, the following residents do not have to apply for a Global Business License:
- Corporations incorporated before 31 December 2018 not holding GBL1 or GBL2,
- Corporations established after 31 December 2018 and which have among their investors or proposed investors development financial institutions, multilateral agencies or sovereign funds. However, the resident corporations must have been granted an approval by the FSC on such terms and conditions as the FSC sees fit,
- A trust established under the Trusts Act 2001 governed by the laws of Mauritius and
- A foundation established or registered in Mauritius under the Foundations Act 2012.
Anti-Money Laundering and Combating the Financing of Terrorism and Proliferation (Miscellaneous Provisions) Act 2019
This act was drawn up so that the country’s activities are in line with international standards on anti-money laundering and combating the financing of terrorism and proliferation. Moreover, it aims to address threats to international peace and security in relation to the following:
- The Banking Act 2004: Every financial institution and holder of a license, along with its branches and subsidiaries operating in a group structure, have to introduce group-wide programmes against money laundering and terrorism financing. These include processes to ensure group-level compliance, audit and anti-money laundering with the power to request customer, account and transaction information from branches and subsidiaries as necessary to perform their functions to combat money laundering and terrorism financing.
- The United Nations (Financial Prohibitions, Arms Embargo and Travel Ban) Sanctions Act 2019: This requires that no person shall deal with the funds that are owned or controlled by a designated/listed party or any other assets whether tangible, intangible, actual or potential, however acquired, of a designated/listed party.
According to the act, a designated party is defined as a party who has committed or commits or attempt to commit, a terrorist act.
On the other hand, a listed party means any party listed by or under the authority of the United Nations Security Council.