Business
New FCC Rules: Rs20 Million Penalty Risk Looms for All Mauritian Entities
Organisations in Mauritius now face fines of up to Rs 20 million for failing to implement adequate internal procedures against corruption and money laundering, following the publication of stringent new directives by the Financial Crimes Commission (FCC).
The FCC’s “Guidelines on Legal Persons,” which industry experts confirm have the force of law under Article 52 of the Financial Crimes Commission Act 2023, signal an unequivocal end to “approximations” in financial crime compliance.
WIDESPREAD COMPLIANCE MANDATE
The new legal obligation for compliance is comprehensive, affecting nearly the entire Mauritian economic and organisational landscape.
- No organisation is exempt: Private and public companies, partnerships, trusts, foundations, NGOs, associations, cooperatives, and public bodies must all now establish internal anti-corruption and anti-money laundering procedures.
- Broad Scope: The rules apply to virtually “any organisation, whether incorporated or not, that conducts activities in Mauritius,” according to Me Yousuf Ali Azaree, a specialist lawyer. This includes non-profit associations and philanthropic foundations.
THE FIVE PRINCIPLES OF COMPLIANCE
Organisations must structure their internal procedures around five essential principles to comply with the new framework, as detailed by Me Azaree:
- Management Commitment: Ensuring accountability and supervision from leadership.
- Risk Assessment: Identifying potential vulnerabilities to financial crime.
- Control Measures: Implementing appropriate controls to mitigate identified risks.
- Review and Monitoring: Regularly checking and following up on the procedures in place.
- Training and Communication: Continuous engagement of all personnel.
SANCTIONS AND LEGAL DEFENCE
Failure to comply with these binding guidelines exposes organisations to significant penalties and compromises their legal defence in the event of a prosecution.
- Maximum Fine: The maximum penalty for a conviction for lacking “adequate procedures” is Rs 20 million.
- Graduated Penalties: Non-compliance can also result in a monthly administrative fine of Rs 10,000, capped at Rs 1 million, until the issue is corrected.
- Loss of Defence: Ignoring the obligations means an organisation cannot invoke the defence of having “adequate procedures” if investigated, essentially stripping them of a key legal protection.
- Proving Compliance: Conversely, having concrete proof of compliance—such as regular training and systematic internal controls—can help an entity avoid sanctions or defend itself effectively, the lawyer notes.
TARGETING CORRUPTION VECTORS
A specific section of the directives addresses the often-exploited grey area of gifts, hospitality, and promotional expenses.
- Organisations must now adopt a written policy governing not only cash and in-kind gifts but also invitations, sponsorships, business travel, and promotional events.
- Me Azaree warned that these activities are “often exploited as vectors of corruption or influence peddling,” and a written policy serves as tangible proof of “adequate procedures.”
WHISTLEBLOWER PROTECTION
The new framework also includes enhanced protection for whistleblowers under Article 46(2) of the FCC Act.
- Individuals who make an honest disclosure relating to corruption, money laundering, or fraud are protected from both civil and criminal prosecution.
- They are also protected against disciplinary action or reprisals from their employer, marking a significant move away from a “culture of silence.”
Me Azaree concluded that the FCC’s guidelines are “not just advice, but an integral part of the legal framework,” requiring immediate action from the Mauritian business community to avoid legal and financial risks.
Sourc: Defi Media