Compliance Insights with Prakash Ramgolam

December 13, 2021 10:38 am Published by

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Reckoning over 28 years of experience in the insurance and reinsurance industry, our CFO, Prakash Ramgolam, is responsible for managing the company’s finances and delivering business efficiency through software applications. With Compliance becoming an integral part of doing business today, he decided to share his views on the importance of having strong regulations, and their impact on the private sector. Let’s have a look at some of his compliance insights

Following the FATF decision to remove Mauritius from the grey list, how is Mauritius doing in terms of compliance?

Mauritius has made substantial progress towards consolidating the jurisdiction’s AML/CFT regime and is adhering to the highest international standards in combatting AML/CFT matters. The country is focussing on certain key areas:

  • – ensuring access to accurate, basic, and beneficial information by competent authorities in a timely manner,
  • – implementing a risk-based approach for supervision of non-profit organizations to prevent abuse for terrorist financing purposes
  • – demonstrating adequate implementation of targeted financial sanctions through outreach and supervision.
  • – providing training for law enforcement authorities to ensure that they have the capability to conduct money laundering investigations.
  • – conducting outreach to promote understanding of the ML and TF risks and obligations

All these measures aim at reinforcing Mauritius’s position as a leading investment destination and domicile of choice for structuring cross border investment into Africa, Asia and Europe.

How have these developments reshaped the way business is done in Mauritius?

Companies are now conducting enhanced due diligence and putting a strong emphasis on Know Your Customer (KYC) documents. Mauritius had entered the grey list mainly because these measures were not taken seriously and therefore the country was prone to illicit financial activities, wherein the gambling and real-estate sectors were not that closely monitored. For example, casino owners now have the obligation to ask a client their source of funds. These minor changes had a considerable impact in regulating the flow of black money and thus increasing the chance to combat money laundering and financing of terrorism.

To what extent is it important of having good regulations in terms of compliance?

We live in a world of rules, and “compliance” is the process of conforming to them. To maintain safe, fair and ethical business operations, companies of every size in every industry must follow certain laws and regulations as part of business operations. Failing to comply can prove costly in terms of legal and financial penalties as well as the consequences of eroding customer trust and tarnishing your reputation.

Mauritius is recognized as an International Finance Centre of repute. Its stability in the economy, and strong banking and financial sectors, has caused the nation to be home to many international banks, investment funds, legal firms, and corporate services, among others. Good compliance with regulations has a significant positive impact on the Mauritian economy as it creates an environment that is safe for foreign investments. Multinationals will be more confident to invest firstly because of low ML risk. Secondly, setting up a new business will be easier as the authorities and companies involved in global business, who are aiding in that process, will be less reticent and more lenient in demanding clarifications when due diligence is being conducted.

Compliance with good regulations will boost foreign investors as they want to conduct their business activities in a well-regulated jurisdiction where the process is swift and efficient.

Finally, how do you see the future of the private sector in terms of compliance/regulations?

The Mauritius financial centre is one of the main pillars of the economy where it generates high value-added employment, especially for our young professionals. It is estimated that the sector, including banking, directly employs more than 15,000 people. By virtue of their global business activities, the financial sector has learned valuable lessons of non-compliance since the grey-listing.

Operators and regulators of all economic entities will adopt a new compliance culture in their daily activities. Adequate AML/CFT risks assessment will be carried out and implemented when onboarding clients in any business relationship.

Private sector operators will need to be in line with the latest updates regarding laws and regulations and they will be subject to constant monitoring by the regulators. The regulatory expectation should not be to comply with the minimum standards but to exceed them.

The economic operators in all sectors will continue to exercise control through world checks, proper client screening and maintain permanent monitoring of risks. Training in AML/CFT will need to be provided to all the employees in the organisation

In light of emerging technology and new practices, all operators will need to be kept abreast of the digital risks and developments.

Mauritius will become the first country to comply with all 40 AML/CFT rules of the FATF and will then be a model jurisdiction in the AML/CFT compliance worldwide. The compliance measures are imperative in protecting Mauritius as a leading International Financial Centre, recognised for its socio-economic stability, good governance and strong institutions.

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