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A new era for the Mauritius IFC
Yogesh Gokool, Senior Executive – Global Business

A new era for the Mauritius IFC

Published on
November 22, 2021
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It came as no surprise when Mauritius was internationally acclaimed for the significant technical progress made in terms of its Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) framework – the latter earning the country its exit from the FATF Grey List as well as the UK High Risk Third Country List. Dwelling on the subject matter, with a key focus on how Mauritius can rebuild its International Financial Centre of substance image, Yogesh Gokool, our Senior Executive – Global Business, shares his views with us.



This whole FATF Grey list episode has kept everyone in the Global Business arena on its toes. What has been key in helping AfrAsia Bank face this challenge head-on?



The most important, and at times challenging, task was to explain to our clients and our correspondent banking partners the raison d’être of this blacklisting. Communication has been key in addressing their concerns and reassuring them of our staunch controls in place for onboarding and transaction monitoring activities. It was crucial that we take the time to explain the why of what happened and the potential implications involved as well as reassure our stakeholders that we’re putting in all the required efforts and work in tandem with the Government to fix things earliest possible.



True it is to say that we had a reputational, a financial and an operational hit with investment managers rerouting their investment vehicles to other jurisdictions and the enhanced due diligence to which Mauritius was subjected. But, maintaining a continuous line of communication with our stakeholders helped to ensure that we retain our pool of clients and, I must say, that I am proud of the Team’s commitment and drive for we have also managed to acquire new clients albeit the challenges.



In view of our exit from the FATF grey list, can we then expect an exit from the EU blacklist as well?


Mauritius was automatically, if I may say so, enrolled in the EU Blacklist post its FATF grey-listing. Going by this logic, I’d say, chances are very high that we’ll soon be exiting the EU black list too – more so, since, we also exited the UK Blacklist already. And, I anchor my optimism on Ghana’s exit from the EU list immediately post its delisting from the FATF list back in June 2021. That said, it doesn’t mean that we should just stand back and wait. The delisting process can take as long as a minimum of 6 weeks but we can definitely see how we can catalyse this withdrawal or even how to start rebuilding our Mauritius International Financial Centre image regionally and globally.  



What do you think we can do, as a country, to rebuild our image?


Firstly, rebuilding our image as an IFC of repute is not going to happen overnight. We’ve taken more than 25 years to build this image to what it was pre-FATF grey-listing.  I am not saying that it will take another 25 years and it will definitely take some time to re-establish and reinforce our standing as a compliant Financial and Trade Hub.



I believe what we need, first and foremost, is a strong marketing campaign that will target our core markets. This campaign should not only flag the advantages of Mauritius IFC but also emphasise on our resilience in having made an applaudable technical progress which has earned us to be rightfully withdrawn from the list. Some will say that we need not dig the old graves but I’d say, since we’ve already been so much in the limelight because of the FATF grey list, let’s turn this into our advantage in rebuilding our reputation.



We’ve successfully implemented 39 out of 40 FATF recommendations already, positioning us way ahead of jurisdictions like the US and Singapore. If collectively the Government and private sector players put in a little extra work, we can position ourselves as the first country to have implemented all 40 recommendations.  Needless to say, this will be a key message of our campaign in repositioning the Island on the global scene as a competitive and highly compliant jurisdiction.  



Moreover, with the evolving requirements of clients, I think it’s high time for the Global Business arena to up our game in terms of services and offerings. We need not necessarily reinvent the wheel but rather, we can focus on having competitive value-add services that will attract international investors to Mauritius. Coupled to that, we should better our infrastructural platforms, constantly innovate to retain our competitive edge vis-à-vis rising IFCs and invest in our people.



But then again, I do not think it’s only a country’s responsibility to rebuild our image. Each player can leverage its own strengths to help achieve same. For example, AfrAsia Bank has been capitalising on our regional knowledge and expertise in terms of cross-border investments on African grounds to maintain a strong partnership with our African peers. We are leveraging our recent international award - “Best Banking and Custody Provider: Global Custodian” – from AGF Africa Service Providers to reassure our clients of our capability to service their needs whilst being based in the Mauritius IFC. These international recognitions sure help to reinforce our credibility despite the pitfalls that are out of our control.



Now that we are out of the FATF grey list and potentially out of the EU blacklist soon enough, what can we expect for the year to come?



Once we pin down a strong national strategic plan to rebuild our image and roll it out regionally, we can expect a gradual increase in business acquisition from the African, Asian and European countries. Whilst the marketing plan will directly address our reputational hit, its positive spill-overs will curtail the operational and financial losses we’ve incurred - we’re likely to witness more Development Financial Institutions investing into Africa via Mauritius, and European financial institutions will potentially lessen their due diligence controls on Mauritius. We can look forward to regain our partnerships with European correspondent banks, with less delays for bank transfers.



For sure, some other challenges await the Global Business field ahead – for example, we will have to tackle OECD’s Global Minimum Taxation which imposes a minimum of 15% corporate tax. We also have to do our best to reassure international investors and individual clients that Mauritius is not a tax haven – a perception that has unfortunately withstood the test of time till date.



Here, the strong partnership that the FATF Grey List has bequeathed the public-private sector as a legacy will greatly aid us! We have all worked together to get Mauritius out and we will leverage this relationship we’ve built with our peers and the Government to face the other challenges ahead. The idea is to learn from the past experience and apply our learnings in a way that will promote sustainable recovery and growth and I believe, post the FATF Grey list saga, this is one of the key objectives of all players in the industry.  




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