GUIDELINES ON THE MEASURES FOR THE PREVENTION OF

MONEY LAUNDERING AND COUNTERING THE FINANCING OF

TERRORISM FOR DEALERS UNDER THE FINANCIAL
INTELLIGENCE AND ANTI MONEY LAUNDERING ACT 2002

Amended September 2021

DISCLAIMER

These Guidelines are intended to provide assistance to dealers under the Financial Intelligence and
Anti Money Laundering Act, (FIAMLA)2002 (hereinafter referred to as Dealers) in meeting their
obligations under the (FIAMLA, United Nations (Financial Prohibitions, Travel Ban and Arms Embargo)
Sanctions Act 2019 (UN Sanctions Act) and the Financial Intelligence and Anti Money Laundering
Regulations 2018 (FIAML Regulations). If you are unsure about your obligations in a given case, you
should consider taking independent legal advice.

These guidelines have been issued pursuant to section 10(2)(b) of the FIAMLA, 2002. They must be
read also in conjunction with the Prevention of Corruption Act 2002, Prevention of Terrorism Act 2002,
the United Nations (Financial Prohibitions, Arms Embargo and Travel Ban) Sanctions Act 2019, the
Convention of the Suppression of the Financing of Terrorism Act and the Financial Intelligence and Anti-
Money Laundering Regulations 2018.

i
ACRONYMS

AML/CFT Anti-Money Laundering and Combating the Financing of Terrorism

CDD Customer Due Diligence

CO Compliance Officer

DNFBPs Designated Non-Financial Businesses and Professions

EDD Enhanced Due Diligence

ESAAMLG Eastern and Southern Africa Anti-Money Laundering Group

FATF Financial Action Task Force

FIAMLA Financial Intelligence and Anti-Money Laundering Act

FIU Financial Intelligence Unit

ML Money Laundering

NRA National Risk Assessment

PCPs Policies, Controls and Procedures

PEP Politically Exposed Person

PF Proliferation Financing

STR Suspicious Transaction Report

TF Terrorism Financing

ii
Table of Contents

1 Introduction .......................................................................................................................................... 1

2. Money Laundering and Financing of Terrorism and Proliferation ...................................................... 4

3. Risk-Based Approach ......................................................................................................................... 7

4. Internal Controls ............................................................................................................................... 17

5. Preventive Measures ........................................................................................................................ 23

6. Terrorist Financing Offences ............................................................................................................ 37

7. ML/TF Indicators for Dealers ............................................................................................................ 39

Annex 1. Risk Assessment Form for Dealers....................................................................................... 40

Annex 2: Template for AML/CFT Policies and Procedures ................................................................. 45

iii
1 Introduction

Money laundering, terrorism and proliferation financing have far-reaching consequences for a
country’s financial system and economy. With these crimes becoming increasingly cross-border in
nature, jurisdictions must equip themselves to protect the integrity of their financial systems and must
also be prepared to deal with any abuses which are encountered. In order to achieve this aim, there
are several building blocks which are required. The first is a sound and robust legal framework, which
empowers institutions and lays down the obligations of all parties concerned. The second is an open
and collaborative approach between AML/CFT supervisors and the reporting persons that they
regulate. Additionally, there must be a willingness from the sectors, which are regulated to understand
their obligations and to accept that they also have to contribute to the fight against ML and TF. Against
this background, the FIU, as the AML/CFT regulator for dealers, firmly believes that one crucial way
through which ML and TF can be curbed, is through the implementation of strong controls, policies
and procedures by dealers to ensure that the jewellery sector does not become a haven for criminals.
The purpose of these guidelines is to assist dealers in establishing strong systems and in becoming
partners in the fight against ML and TF. Its objective is also to help the sector in understanding its
AML/CFT obligations.
DRAFT

1.1 The Mauritian AML/CFT Legislative Framework

Mauritius has taken significant steps to ensure that it has a robust AML/CFT legal framework, which is
aligned with international standards. The FIAMLA was enacted in 2002 and provided several key
requirements of a strong AML/CFT system. It has been amended to ensure that Mauritius meets its
international obligations. Among other things, the FIAMLA makes provision for an independent FIU,
the obligation of filing suspicious transaction reports, meeting CDD obligations and formulating a
framework for the AML/CFT supervision of Designated Non-Financial Businesses and Professions
(DNFBPs).

In 2018, the FIAML Regulations 2018 were made and revoked the then 2003 FIAML Regulations. The
2018 Regulations make extensive provision in relation to the measures which must be put in place by
reporting persons (which includes dealers) to ensure that they are complying with the requirements of
the law and that they are taking the required steps to safeguard their businesses from ML/TF abuses.

The United Nations (Financial Prohibitions, Arms Embargo and Travel Ban) Sanctions Act 2019
(henceforth referred to as the ‘UN Sanctions Act’) was also passed in May 2019. This Act enables
Mauritius to implement the measures under all the United Nations Security Council Resolutions and
deal with other matters of international concern, and to give effect to Article 41 of the Charter of the
United Nations.
Copies of the above legislations are available on the FIU’s website: FIU - Home (fiumauritius.org)

1
1.2 Purpose and Scope of the Guidelines

The Jewellery sector may become a preferred choice for criminals for hiding illicit gains. This choice is
due to such factors like the relatively high monetary value of the transactions conducted, the
appreciation of the assets’ value over time, the portability of the products and the opportunity to conceal
ownership.

As per the findings of the National Risk Assessment (2019) Public Report, the following factors make
the sector inherently vulnerable to money laundering:
(a) the client-base profile of the sector, which includes domestic politically exposed persons,
high-net worth individuals, non-resident clients and clients with criminal records; DRAFT

(b) the use of cash as the sector has been characterized by a high volume of low value
transactions;
(c) the anonymous use of the product, especially where jewellery is purchased by a third party
on behalf of the true owner; and
(d) the relative difficulty of tracing transaction records as transactions are conducted without
complying with the prescribed due diligence and disclosure requirements.

Dealers can play a key role in detecting money laundering and financing of terrorism and proliferation
schemes. Given that they are in direct contact with clients (either buyer and/or sellers), they are well
placed to detect any suspicious transaction/activity.

This document has been issued pursuant to section 10(2) (ba) of the FIAMLA, 2002. They are intended
to assist dealers in complying with their obligations in relation to the prevention, detection and reporting
of money laundering, financing of terrorism and proliferation. Through compliance with their obligations,
dealers can ensure that their businesses are not misused by money launderers or those financing
terrorism or proliferation.

1.3 Businesses and Individuals covered by the Guidelines

This guideline is addressed to the following:

Dealers under the FIAMLA, are persons who engage in any transaction of at least 500,000 rupees in
total, whether the transaction is executed in a single operation or in several operations which appear to
be linked.

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Under the FIAMLA, the following terms are defined:

“Dealer in jewellery, precious stones or precious metals” means –

(a) a person who deals in jewellery, precious stones or precious metals; and
(b) includes a person who –
(i) manufactures, processes, buys, sells, imports or exports jewellery or supplies jewellery for
sale;
(ii) processes, buys., sells or imports precious metals or exports melted precious;

(iii) or, processes, buys, sells or imports precious stones DRAFT

“Jewellery” means any article made of a precious metal or its allow, and which exceeds one gramme.
“Precious metal” means

(a) gold, silver, platinum or palladium; and

(b) includes any object which is composed of gold, silver, platinum or palladium

“Precious stone” means diamond, sapphire, ruby, emerald, alexandrite or tanzanite.

1.4 The Financial Action Task Force (FATF)

The FATF was established in 1989 by the G7countries. It is an inter- governmental body, whose
purpose is to set standards and promote effective implementation of legal, regulatory and operational
measures for combating money laundering, financing of terrorism and other related threats to the
integrity of the international financial system.

As a member of the Eastern and Southern Africa Anti-Money Laundering Group, Mauritius has made
the commitment to implement these standards into its domestic AML/CFT framework.

1.5 The Eastern and Southern Africa Anti-Money Laundering Group

(ESAAMLG)

The ESAAMLG was founded in 1999 and its main objective is to ensure that its Members comply with
the FATF standards. Assessment for compliance with the FATF Recommendations is done through
the Mutual Evaluation Process (MEP), following which a Mutual Evaluation Report (MER) is prepared
and posted on the ESAAMLG’s website. The most recent MER of Mauritius can be accessed on the
FIU Website1.

1
http://www.fiumauritius.org/English/Documents/ESAAMLG%20DOCS/Second%20Round%20MER%20of%20Mauritiu s-
July%202018.pdf
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1.6 Compliance with Guidelines and Enforcement

As the AML/CFT regulator for the jewellery sector, the FIU is mandated to ensure compliance by the
latter with the FIAMLA, the UN Sanctions Act, and any regulations and guidelines issued under these
Acts. Following legal amendments made in May 2019, FIU has been further empowered, and provided
with significant powers to enforce compliance in the sector. The FIU is now able to:

- conduct inspections, both offsite and onsite

- give directions to members (in the present case this means Dealers) falling under their
respective purview;
FT

- require members to submit a report on corrective measures it is taking to ensure compliance

with the relevant legislation; impose administrative sanctions under section 19N of the FIAMLA.
Details of the Administrative Sanctions can be found at section 19H(1)(d) FIAMLA.
- request information or records from its members in the discharge of its functions.

1.7 The Financial Intelligence Unit (FIU)

The FIU Mauritius was set up in August 2002 under the provisions of section 9 of the FIAMLA. It is the
central agency in Mauritius responsible for receiving, requesting, analyzing and disseminating
disclosures of information regarding suspected proceeds of crime and alleged money laundering
offences as well as the financing of any activities or transactions related to terrorism to the
investigatory, supervisory authorities2, Registrars, overseas FIU and other relevant authorities.

DRAF

2. Money Laundering and Financing of Terrorism and Proliferation

2.1 Money Laundering

Money laundering is the process intended to disguise the illegal origin of proceeds of crime in order to
make them appear legitimate. If undertaken successfully, it allows criminals to maintain control over
proceeds of criminal activities and, ultimately, provide a legitimate cover for these activities. The process
is often carried out in three stages:

2
Investigatory authorities" include the Commissioner of Police, the Director, The Mauritius Revenue Authority, the Enforcement
Authority and the ICAC and "supervisory authorities" include the Bank of Mauritius, the Financial Services Commission, the GRA, the
FIU, the Mauritius Institute of professional Accountants, the Attorney General’s Office and the Registrar of Companies.
4
(1) Placement

This initial stage involves the introduction of criminally tainted money into the financial system. The
launderer seeks to introduce illegal proceeds into the financial system by, for example breaking up large
amounts of cash into less conspicuous smaller sums that are then deposited directly into a bank
account, or by purchasing a series of monetary instruments (e.g. cheques etc.) that are then collected
and deposited into accounts at another location.
DRAFT

(2) Layering

The layering stage is the dissociation of the dirty money from their source through a series of
transactions to conceal the origins of the proceeds. These transactions may involve different entities
such as companies and trusts as well as different financial assets such as shares, securities, properties
or insurance products. It is the separation of benefits of drug trafficking or criminal conduct from their
source by creating layers of financial transactions designed to disguise the audit trail. Illustratively, the
launderer may engage in a series of conversions or movements of the funds to distance them from their
source. (e.g. buying and selling of stocks, commodities or properties, buying precious metals or stones
with cash, taking out and repaying a loan, use of gatekeepers and their services to buy and sell assets
etc.). The funds might even be channeled through the purchase and sale of investment instruments, or
the launderer might simply wire the funds through a series of accounts at various banks across the
globe. This use of widely scattered accounts for laundering is especially prevalent in those jurisdictions
that do not co-operate in anti- money laundering investigations. In some instances, the launderer might
disguise the transfers as payments for goods or services or use gatekeepers to carry out such
transactions, thus giving them a legitimate appearance.

(3) Integration

The integration stage is the use of the funds in the legitimate economy through for instance, investment
in real estate or luxury assets. Essentially, it is the provision of apparent legitimacy to benefits of drug
trafficking or other illegal activities. If the layering process has been successful, the integration
schemes place the laundered funds back into the economy so that they re-enter the financial system
appearing as legitimate business funds. They can then be used for legitimate purchase of luxury
goods, real estate and soon.

2.2 Financing of Terrorism

Financing of terrorism is the process by which funds are provided to an individual or group to fund
terrorist activities. Unlike money laundering, funds can come from both legitimate sources as well as
from criminal activity for the financing of terrorism. Funds may also originate from personal donations,
profits from businesses and charitable organizations but all the funds are actually used to finance
terrorism. Funds may also come from criminal sources, such as the drug trade, the smuggling of
weapons and other goods, fraud, kidnapping and extortion.
DRAFT

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Unlike money laundering, which precedes criminal activity, with financing of terrorism, it is possible to
have fund-raising or a criminal activity generating funds prior to the terrorist activity actually taking place.
However, similar to money launderers, those financing terrorisms also move funds to conceal the source
of funds. The motive is to prevent leaving a trail of incriminating evidence.

2.3 Proliferation Financing

Proliferation of Weapons of Mass Destruction (“WMDs”) can be in many forms, but ultimately involves
the transfer or export of technology, goods, software, services or expertise that can be used in
programmes involving nuclear, biological or chemical weapons, and their delivery systems (such as
long-range missiles). Proliferation of WMD financing is an important element and, as with international
criminal networks, proliferation support networks may use the international financial system to carry out
transactions and business deals. Unscrupulous persons may also take advantage of the potential profits
to be made by facilitating the movements of sensitive materials, goods, technology and expertise,
providing seemingly legitimate front organizations or acting as representatives or middlemen.

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3. Risk-Based Approach

3.1 Adopting a Risk-Based Approach

Recommendation 1 of the FATF focuses on assessing risks and applying a risk-based approach.
Based on the findings of its first national ML and TF risk assessment, which was completed in August
2019, the ML risk3 associated with the Jewellery sector was found to be Medium-High. The level of ML
threat was rated Medium. The main predicate offence associated with the sector was jewellery theft.
A possible link between the sector and drug trafficking was also identified. Alternatively, the following
factors make the sector inherently vulnerable to money laundering:

(a) the client-base profile of the sector - includes domestic politically exposed persons, high net
worth individuals, non-resident clients and clients with criminal records;
(b) the use of cash – the sector characterized by a high volume of low value transactions;
(c) the anonymous use of the product- where jewellery is purchased by a third party on behalf of
the true owner; and
(d) the relative difficulty of tracing transaction records as transactions are conducted without
complying with the prescribed due diligence and disclosure requirements. DRAFT

It is an obligation for dealers to identify, assess and understand their ML/TF risks pursuant to Section
17 of FIAMLA. It is highlighted that dealers should take into account the outcome of the National Risk
Assessment4 when applying CDD measures in relation to each customer.

A risk-based approach also requires dealers to have systems and controls that are commensurate with
the specific risks of money laundering and financing of terrorism that they face. Assessing this risk is,
therefore, one of the most important steps in creating a robust anti-money laundering compliance
program.
As money laundering risks increase, stronger controls are necessary. However, all categories of risk —
whether low, medium or high — must be identified and mitigated by the application of controls, such as
verification of customer identity, CDD policies, suspicious activity monitoring and checking list of people
on whom sanctions have been applied or being applied. A risk-based approach should be flexible,
effective and proportionate.
_________________________________________________________________________________
3
For the purpose of assessing money laundering and terrorism financing risks, risk is defined as a function of threat, vulnerability and
consequence.

A threat is a person or group of people, object or activity with the potential to cause harm to, for example, the state, society, the economy,
etc. In the ML/TF context this includes criminals, terrorist groups and their facilitators, their funds, as well as past, present and future ML
or TF activities.

Vulnerabilities comprise those things that can be exploited by the threat or that may support or facilitate its activities. In the ML/TF risk
assessment context, looking at vulnerabilities means focusing on, for example, the factors that represent weaknesses in AML/CFT
systems or controls or certain features of a country. They may also include the features of a particular sector, a financial product or type
of service that make them attractive for ML or TF purposes.

Consequence refers to the impact or harm that ML or TF may cause and includes the effect of the underlying criminal and terrorist
activity on financial systems and institutions, as well as the economy and society more generally.

4
The public version of the NRA report may be accessed here:
http://www.fiumauritius.org/English//DOCUMENTS/NRA%20FINAL%20REPORT.PDF

7
It is important to note that, pursuant to section 3(2) of FIAMLA, dealers are required to take such
measures that are necessary to ensure that their services are not being misused to commit a money
laundering or the financing of terrorism offence. The penalty for such an offence is a fine not exceeding
10 Million rupees and penal servitude for a term not exceeding 20years. No dealer can reasonably be
expected to detect all wrong-doing by clients, including money laundering. However, if any dealer
develops systems and procedures to detect, monitor and report the risky clients and transactions, he
DRAFT

will reduce his chances of being misused by criminals.

There are three steps to establishing a risk-based approach: risk assessment, risk mitigation and risk
monitoring. The following diagram depicts the three different steps in implementing a risk-based
approach.

• Identify and rate the main ML/TF risks :

•customers
•products and services
•business practices/delivery channels
Risk •geographical risk
Assessment

• Manage the business risks:

•minimize and manage the risk
•apply strategies, policies and procedures
Risk •put in place system and controls
Mitigation

• Conduct on-going monitoring:

•develop and carry out monitoring process
DRAFT

•keep necessary records

Risk •report suspicious transactions
•report to senior management
Monitoring

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3.1.1 Risk Assessment

Dealers can assess money laundering and terrorist financing risks by using various categories. The
application of risk categories provides a strategy for managing potential risks by enabling dealers to
subject each customer to reasonable and proportionate risk assessment.

3.1.1.1 Criteria to determine Risk

The main risk categories are:

(a) Country or geographic risk;

(b) Customer and Counterparty risk;

(c) Product/services risk; and

(d) Business Practices/Delivery Channels.

The weight given to these risk categories (individually or in combination) in assessing the overall risk of
potential money laundering may vary from one dealer to another, depending upon their respective
circumstances. The categories, however, should be considered holistically and not in isolation.
The risk categories may be broken down into different levels of risks and they also help to determine the
rigidity of your policies and procedures.

(a) Country or Geographic Risk

There is no unique definition of what consists a high-risk country or geographic location. However, there
are several factors, which can be considered when assessing whether a particular country or location
presents higher risk. It is important to conduct such an assessment to ensure that dealers do not engage
in transactions emanating from such countries or, if they do, that they have well established controls and
procedures to mitigate the associated risk.
When it comes to the jewellery sector, some countries will present more serious AML/CFT concerns than
others, and the risk level will vary depending on any of the elements of a transaction, including3:

(a) Where the product is mined;

(b) Where the product is refined or finished;
(c) The location of a seller or purchaser;
(d) The location of the delivery of the product; and
(e) The location of funds being used in the transaction.

3
https://www.fatf-
gafi.org/media/fatf/documents/reports/RBA%20for%20Dealers%20in%20Precious%20Metal%20and%20Stones.pdf
9
In line with FATF guidance, the following factors should be considered by dealers when making an
assessment of the country/geographical risk in relation to proposed transaction in diamonds, jewels or
precious metals:

▪ For rough diamonds, whether a producing or trading country participates in the Kimberley
Process.4
▪ Whether there is known mining or substantial trading of the transaction product – diamonds,
jewels or precious metals - in a transaction source country.
▪ Whether a country would be an anticipated source of large stocks of existing diamonds, jewels or
precious metals, based upon national wealth, trading practices and culture (centres of stone or
jewel trading, such as Antwerp, Belgium) or unanticipated (large amounts of old gold jewellery in
poor developing countries). In relation to this factor, consideration must be given to the cultural
and economic significance of gold and silver in developing countries.
▪ The level of government oversight of business and labour in mining and/or trading areas.
▪ The extent to which cash is used in a country.
▪ The level of regulation of the activity.
▪ Whether informal banking systems operate in a country, e.g. hawalas operate in many developing
countries.
▪ Whether designated terrorist organisations or criminal organisations operate within a country,
especially in small and artisan mining areas.
▪ Whether there is ready access from a country to nearby competitive markets or processing
operations, e.g. gold mined in Africa is more frequently refined in South Africa, the Middle East or
Europe rather than in the United States, and a proposal to refine African gold in the United States
would be unusual and higher risk.
▪ Whether, based on credible sources, appropriate AML/CFT laws, regulations and other measures
are applied and enforced in a country. Dealers may find it useful to consult the lists published by
the FATF of those jurisdictions that have strategic deficiencies in their AML/CFT systems at the
following link: https://www.fatf-gafi.org/publications/high-risk-and-othermonitored-
jurisdictions/?hf=10&b=0&s=desc(fatf_releasedate).
▪ Information, published by the Egmont group of FIUs, may also assist. Dealers may also refer to
any guidance issued by the IMF and any relevant national government bodies as well as
nongovernmental organizations.
▪ The level of enforcement of laws addressing corruption or other significant organized criminal
activity could be consulted.
▪ Whether sanctions, embargoes or similar measures have been applied against the country.

4
https://www.kimberleyprocess.com/. Mauritius is a participating country in this process.
10
(b) Customer and Counterparty Risk

i. Retail Customer risk

The purchase of jewellery, precious metals or stones can be a very personal and emotional matter. It is
widely accepted that these items are usually bought as gifts and in many cultures, occupy a significant
place in weddings or other family events. Consequently, there will not, in general be a business purpose
for such purchases. However, from an AML/CFT perspective, dealers must be conscious that not all
purchases can simply be classified as emotional and, therefore, automatically legitimate. Higher risk may
be observed at the retail level, when it is subject to the following factors (although not exhaustive, but
indicative):

Use of cash. It should be recognized, however, that many persons desire anonymity in jewellery
purchases for purely personal reasons, or there is the absence of paper records, with no connection to
money laundering or terrorist financing.

Payment by or delivery to third parties. In these cases, dealers should, nonetheless, be aware that not
all transactions involving third parties are suspicious, since it is not obvious for members of a family to
select jewellery and for another member of the same family or any other close person to make the
payment and have the product delivered.

Structuring – Instances where a purchaser is making several purchases of lesser value deliberately.

ii. Business Counterparty Risk

There are many different stages and transactions and counterparties involved in the precious stones and
precious metals businesses. Dealers may buy from or sell to other counterparties, who also work in the
same precious metals or precious stones businesses, or sell to the public through retail sales (which may
often be anonymous). Dealers will need to consider the risks associated with each stage at which they
participate.

Higher-risk counterparties (Example for Wholesalers)

Higher-risk counterparties are those who:

- Lacks knowledge or understanding of the industry that he intends to deal in;

- Has no business premises or required equipment and financial resources necessary for the
proposed business;

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 - Is unfamiliar with the business practices of the industry and the common financial terms and
conditions;

- Proposes a transaction that makes no sense, or that is excessive, given the circumstances, in
amount, or quality, or potential profit;

- Has significant and unexplained geographic distance from the dealer in precious metals or dealer
in precious stones;

- Makes frequent and unexplained changes in bank accounts, especially among banks in other
countries;

- Involves third parties in transactions, either as payers or recipients of payment or product, without
apparent legitimate business purpose;

- Refuses to identify beneficial owners or controlling interests, where this would be commercially
expected;

- Seeks anonymity by conducting ordinary business through accountants, lawyers, or other

intermediaries, see the paragraph above;

- Prefers to deal non-face-to-face;

- Uses cash in its transactions with the dealer in precious metals or dealer in precious stones, or
with his own counterparties in a nonstandard manner;
- Uses money services businesses or other non-bank financial institutions for no apparent
legitimate business purpose;
- Is a politically exposed person (PEP);

- Persons whose assets have been frozen under section 45 of the Dangerous Drugs Act or whose
assets have been temporarily or permanently confiscated under the Asset Recovery
Act; and

- Persons who appear on the UN Sanctions list or any domestic terrorist list pursuant to the UN
Sanctions Act.

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 (c) Product/Services Risk

An overall risk assessment should also include a determination of the potential risks presented by
products and services offered by a dealer in precious metals or a dealer in precious stones. The
following factors may be considered when making such an assessment:

i. Products

While all precious metals and stones can potentially be used for money laundering and terrorist
financing, level of risk will depend on the value of the item. Unless transactions involve very large
quantities, lower value products are likely to carry less risk than higher value products. However,
dealers must be conscious of the fact that value can also fluctuate dependent upon supply and
demand. Relative values of some materials can vary dramatically between different countries, and
over time.

The physical characteristics of the products offered must also be considered. Products that can be
transported or moved easily and which are unlikely to draw the attention of law enforcement are at
greater risk of being used in cross border money laundering.

Finally, the risk of dealing in stolen or fraudulent products must be taken into account, given that jewellery
theft has been identified as the main predicate offence associated with the sector in the NRA. Dealers
must, therefore, be aware of the risks of trading in stolen products and of being offered stolen jewellery.
In addition to stolen goods, dealers should be alert to the fact that fraudulent goods may also be offered
to them. Typically, this could involve 14-karat gold being represented as 18-karat. The risk associated
with this possibility must also be taken into consideration. Buyers of second hand jewellery should be
particularly conscious of this risk.

ii. Services

Along with the risk associated with the products being offered, dealers must also assess the risks
associated with the services that they offer. Depending on the type of service being offered, the risks may
vary. For example, while some dealers may only be operating a retail business selling jewellery or stones,
others may be involved in the cutting and polishing business where the risks might be different. Or if
services are offered non-face to face, for example services which are offered over the internet or
telephone, the dealer will need to be aware of the risks, which are connected to such services.

iii. Market Characteristics

It is also helpful to bear in mind the following broad principles, which may lower the risk levels of particular
transactions:

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Limited re-sale opportunities – limited re-sale opportunities are likely to be unattractive to money
launderers.

Size of market – a small market is likely to make it more difficult for a money launderer to undertake
transactions, to layer multiple transactions (to create distance between the seller and the ultimate
purchaser), and to conduct anonymous transactions, and will thus be less attractive to money launderers.

Degree of expertise required – if specialized expertise is required for transactions, risk of use of such
transactions by money launderers may be lower.

Degree of market regulation – if a market is regulated, depending upon the degree of regulation,
transactions in that market may be lower risk.

Transaction costs – money laundering and terrorist financing can involve multiple transactions with
criminals first placing illegal assets within a legitimate product, as anonymous as possible, then layering
those assets through intermediate transactions, and then removing them at a different time and place.
Therefore, transactions involving high value product and low transaction costs may be particularly
attractive to money launderers and terrorist financiers. For example, the purchase of pure gold coins, and
subsequent sale of those coins at another location, will quickly return most of the original purchase price.

iv. Financing Methods

The method of payment used affects the risk of money laundering and terrorist financing taking place.
The risks are likely to be reduced if transactions take place through the mainstream banking system.

Conversely, the risk may increase in the following situations:

- Cash, especially in large amounts, can be a warning sign, especially if the use of cash is
anonymous or intentionally hides an identity, e.g. the true purchaser funds the transaction by
giving cash to a third party, who then becomes the nominal and identified purchaser.
- Payments or delivery of product to or from third party accounts, e.g. accounts in the names of
persons other than approved counterparties.
- Payments to or from accounts at financial institutions that are unrelated to a transaction or
approved counterparties, such as banks located in countries other than the location of the
counterparty or transaction.
- Non-bank financial mechanisms such as currency exchange businesses or money remitters.

14
(d) Business Practices/Delivery Channels

Dealers should also consider the channels used to deliver their products or services. In today’s
economy and global market, many delivery channels do not bring the client into direct face-to-face
contact with the reporting entity (for example, Internet, telephone or mail), and are accessible 24 hours
a day, 7 days a week, from almost anywhere. The remoteness of some of these distribution channels
can also be used to obscure the true identity of a client or beneficial owners and can, therefore, pose
higher risks. The examination of business practices and delivery channels should also include
conducting a risk assessment of any new technologies (e.g. Internet based services) that you are
planning to implement. The risk assessment should be conducted prior to the new technology being
implemented.

3.1.1.2 Risk Assessment Tool (Form)

A risk assessment tool at Annex 1 provides an example, for use by dealers, to facilitate the assessment
of the above factors. However, a dealer’s risk assessment has to be appropriate for their specific business
needs, which means that it may have to be more detailed than the checklist provided. Dealers can
customize the checklist or can use a different method or another tool.

3.1.2 Risk Mitigation

The second component of a risk-based approach is risk mitigation. Risk mitigation is about implementing
measures to limit the potential money laundering and terrorist financing risks that the reporting entity has
identified while staying within its risk tolerance level. Pursuant to section 17A of FIAMLA, dealers must
establish policies, controls and procedures to mitigate and manage the ML/TF risks that they have
identified as part of their assessment. As part of its internal controls, when the risk assessment determines
that risks are higher for ML or TF, the reporting entity has to develop written risk mitigation strategies
(policies and procedures designed to mitigate high risk) and apply them for high risk situations.

It is important that the risk mitigation strategies are developed by the dealer for higher risk situations and
that these mitigation strategies are documented. This allows the risk mitigation strategies to be shared
with management and employees. Furthermore, the application of the mitigation strategies should be
recorded to demonstrate that mitigation measures have been applied. Strong senior management
leadership and engagement in AML/CFT is an important aspect of the application of the risk-based
approach. Senior management should approve the risk mitigations strategies and ensure that they are
reviewed every time the risk assessment is updated. The development of a robust AML/CFT program is
thus a crucial component of risk mitigation. Risk mitigation strategies that can be applied have been
identified at Annex 1.a.

15
3.1.3 Risk Monitoring

In addition to risk assessment and risk mitigation activities, a risk-based approach also requires dealers
to take measures to conduct on-going monitoring of financial transactions when there is a business
relationship. The level of monitoring should be adapted according to the ML/TF risks as outlined in the
entity’s risk assessment. The purpose of on-going monitoring activities is to help detect suspicious
transactions. The dealer’s policies, controls and procedures have to determine what kind of monitoring is
done for particular high-risk situations, including how to detect suspicious transactions. The policies,
controls and procedures should also describe when monitoring is done (its frequency), how it is reviewed,
and how it will be consistently applied.

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 4. Internal Controls

4.1 AML/CFT Program

An AML/CFT program is required to identify, mitigate and manage the risk of the products or services
being offered by the dealer that could facilitate money laundering or terrorism financing. Through an
AML/CFT program, the dealer is able to set out the process how it is going to implement its AML/CFT
obligations.

AML/CFT programs should be risk-based implies that hat dealers must develop their own program,
tailored to their situation to mitigate money laundering and terrorism financing risks. This approach
recognizes that not all aspects of an institution’ business present the same level of risks. The reporting
person is in the best position to assess the risk of its clients, products and services and to allocate
resources to counter the identified high-risk areas.

Although not exhaustive, the list below provides the basics of an AML/CFT program:
- Appointment of key officers
- Policies and Procedures
- Training
- Audit and Review

As mentioned at the start of this chapter, having an AML/CFT program enables the dealer to have a clear
approach on how he is going to fulfill his AML/CFT obligations. These obligations, shown below, are
discussed in detail in Chapter 5 and 6 of these guidelines
- Customer Due Diligence (CDD)
- Record Keeping
- Enhanced Due Diligence (EDD)
- Politically Exposed Persons (PEPs)
- Ongoing Monitoring
- Suspicious Transaction Reporting
- Training
- Terrorism Financing Obligations

Annex 2 provides a template to assist agents in the development of internal policies, procedures
and controls.

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4.1.1 Appointment of Key Officers

Subject to the size and nature of their business, Dealers, are required to appoint both a Compliance Officer
(CO) and a Money Laundering Reporting Officer (MLRO) as part of their internal procedures and controls.
The CO and MLRO functions may not be outsourced to a third party and must be employees of the agent.
Where the agent is unable to appoint a CO or MLRO due to the size or nature of its business, then the
agent himself acts as the CO/MLRO.

4.1.1.1 The Compliance Officer

The CO, who must be part of senior management, is responsible for ensuring that the dealer is complying
with its AML/CFT obligations.

The dealer must ensure that the CO:

(a) has timely and unrestricted access to the records of the dealer;

(b) has sufficient resources to perform his or her duties;

(c) has the full co-operation of the dealer’s staff;

(d) is fully aware of his or her obligations and those of the dealer; and

reports directly to, and has regular contact with, the Board (where applicable) so as to ensure Board that
all statutory obligations and provisions in FIAMLA and the

(e) Regulations issued thereunder, are being met and that the dealer is taking sufficiently robust measures
to protect itself against the potential risk of being used for ML and TF. Where there is no Board, the CO
must report directly to the business owner or to any other senior officer appointed by the owner.

In accordance with Regulation22 (3) of the FIAML Regulations 2018, the functions of the CO include:

(a) ensuring continued compliance with the requirements of the FIAMLA and FIAML Regulations 2018
subject to the ongoing oversight of the Board of the dealer where applicable and senior
management;
(b) undertaking day-to-day oversight of the program for combatting money laundering and terrorism
financing;
(c) regular reporting, including reporting of non-compliance, to the Board where applicable and senior
management; and
(d) contributing to designing, implementing and maintaining internal compliance manuals, policies,
procedures and systems for combatting money laundering and terrorism financing.

18
For the avoidance of doubt, the same individual can be appointed to the positions of Money Laundering
Reporting Officer (“MLRO”) and CO, provided the dealer considers this appropriate with regard to the
respective demands of the two roles and whether the individual has sufficient time and resources to fulfil
both roles effectively.

4.1.1.2 The Money Laundering Reporting Officer

In accordance with Regulation 26(1) of FIAML Regulations 2018, the dealer shall appoint a MLRO to
whom an internal report shall be made of any information or other matter which comes to the attention
of any person handling a transaction and which, in the opinion of the person gives rise to knowledge or
reasonable suspicion that another person is engaged in money laundering or the financing of terrorism.
The MLRO must be sufficiently senior within the organization and must have the technical skills required
to make an assessment of internal reports prior to determining whether an STR should be filed with the
FIU.

There should be clear reporting lines internally, to ensure that all employees including directors or
partners, know the process of reporting any suspicion that they may have internally to the MLRO.
Records must be kept by the dealer of both internal and external disclosures.

Where, due to its size or the nature of its business, a dealer cannot appoint an MLRO, it must
nevertheless have documented policies and procedures in place to ensure that it is complying with the
FIAMLA and the 2018 Regulations. In these instances, the STR is filed by the dealer with the FIU directly.
4.1.2 Policies and Procedures

Dealers should have in place adequate Policies, Controls and Procedures (PCPs) that promote high
ethical and professional standards and prevent their business from being misused by criminals. These
policies, procedures and internal controls should be efficiently introduced and maintained and each dealer
should be aware of his responsibilities. PCPs should clearly document the steps, which the dealer intends
to follow in the implementation of each element of its AML/CFT Program. The dealer must, for example,
have policies on employee screening and procedures detailing how it will meet the expectation set out in
its policy.

All these PCPs must be widely publicized across the dealer’s business and all its employees must be
made aware of their role and existence. They should also be easily accessible across the business.

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4.1.3 Employment Screening and Training

4.1.3.1 Employment Screening

Dealers are required, under Regulation 22(1)(b) of FIAML Regulations 2018, to implement programmes
for screening procedures so that high standards are maintained when hiring employees.

In light of the above, significance may be given to:

- Obtaining and confirming proper references at the time of recruitment;
- Requesting information from the member of staff with regard to any regulatory action taken
against him; and
- Requesting information from the member of staff pertaining to any criminal convictions and the
provision of a check of his criminal record (for instance, requiring a Certificate of Character).

4.1.3.2 Employee Training

Regulation 22(1)(c) of FIAML Regulations 2018 states that programmes against money laundering and
terrorism financing should be in place to include ongoing training programme for the directors, officers
and employees of the dealer, to maintain awareness of the laws and regulations relating to money
laundering and terrorism financing to:

(i) assist them in recognizing transactions and actions that may be linked to money laundering or
terrorism financing; and

(ii) instruct them in the procedures to be followed where any links have been identified under
subparagraph (i).

A training program should be designed to train the appropriate personnel on a regular basis. A
successful training program not only should meet the standards set out in laws (i.e. FIAMLA Act 2002)
but should also satisfy internal policies and procedures in place. For the purpose of this “Guidelines”,
training includes not only formal training courses, but also communications that serves to educate and
inform employees such as e-mails, newsletters, periodic team meetings and anything else that
facilitates sharing of information.

Topics to be taught in the training program vary according to target audience and services being offered
but several basic matters, outlined below, should be factored into the program:

- Policies and Procedures in place to prevent money laundering and financing of terrorism for
instance identification, record-keeping, the recognition and reporting of suspicious
transactions;

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 - Legal Requirements under relevant AML/CFT legislations and the statutory obligations under
these laws;

- Understanding ML/TF risk of the sector and of their business;

- Penalties for anti-money laundering violations;

- How to react when facing a suspicious client or transaction;

- Duties and accountabilities of employees; and

- New developments together with information on current money laundering and financing of
terrorism techniques, methods and trends.

Lastly, Dealers must keep a record of all anti-money laundering and combating the financing of terrorism
training delivered to their employees.

4.1.4 Auditing the AML/CFT Program

Putting in place an AML/CFT Program is not sufficient; the program must be monitored and evaluated.
The dealer should assess their anti-money laundering and combating the financing of terrorism programs
at a minimum every year to ensure their effectiveness and to look for new risk factors. The audit program
should address issues such as:
(i) the adequacy of its ML/TF risk assessment,

(ii) the adequacy of CDD policies, procedures and processes, and whether they comply with internal

requirements,

(iii) the adequacy of its risk-based approach in relation to the services offered clients and geographic

locations,

(iv) the training adequacy, including its comprehensiveness, accuracy of materials, training schedule,

(v) compliance with applicable laws,

(vi) the system’s ability to identify unusual activity,

(vii) the adequacy of record-keeping, and

(viii) the review of its Suspicious Transaction Reporting (STR) systems, which should include an

evaluation of the research and referral of unusual transaction among others.

21
Pursuant to Regulation 22(1)(d) of the Financial Intelligence and Anti-Money Regulations 2018, a
Reporting person should also carry out an independent audit review. The independent audit review can
be conducted by an internal or external auditor.
If the reporting entity does not have an auditor, it can conduct a self-review. The self-review should be
conducted by an individual who is independent of the compliance-monitoring functions and should not be
conducted by the compliance officer. This could be an employee or an outside consultant. For sole
proprietorships, the review can be conducted by the sole proprietor directly.
The objective of a self-review is similar to the objectives of a review conducted by internal or external
auditors. It should address whether policies and procedures are in place and are being adhered to, and
whether procedures and practices comply with legislative and regulatory requirements. The independent
audit review should be conducted at least every two years.
The results of the audit should be documented and presented either to the Board of Directors (if
applicable) or to senior management. The recommended changes should be implemented no later than
a month following the completion of the audit.

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5. Preventive Measures

Once a dealer has put in place its AML/CFT Program, it can then implement its obligations under the
FIAMLA, FIAML Regulations and the UN Sanctions Act. These are discussed below.

5.1 Customer Due Diligence: Identification and Verification Procedures

Both the FIAMLA and the FIAML Regulations make provision for CDD and KYC obligations and these
apply to dealers as well.
In line with section 17C of FIAMLA, dealers need to identify and verify the true identity of the customer
with whom they are conducting a transaction. The identity of a customer must be established and verified
using independent source of documents, data or information. All CDD information collected must be kept
up to date by the dealer. Additionally, CDD information must be verified against independent and reliable
sources.
In case of corporate bodies, the company’s ultimate beneficial owner must be ascertained (see further
below for more information on beneficial ownership) by obtaining information relating to their identity on
the basis of documents, data or information obtained from a reliable and independent source and
verifying the accuracy of the information obtained. The beneficial owner is the natural person, who owns
or controls the legal person or legal arrangement.

Timing of CDD

Identification and verification measures need to be carried out:

- When establishing a business relationship with a customer
- When dealing with a one-off customer or counterparty and the transaction concerned is equal to
or above 500, 000 rupees whether conducted as a single transaction or several transactions that
appear to be linked;
- Where there is a suspicion of money laundering or financing of terrorism; and
Where there are doubts concerning the veracity of previous customer/counterparty
identification information. 5.1.1 Natural Persons (i.e. Individuals)

(a) Face to Face transactions

Regulation 4 of the FIAML Regulations requires that the dealer shall obtain from and verify a customer,
who is a natural person the following information:
a. the full legal and any other names, including, marital name, former legal name or alias;
b. the date and place of birth;
c. the nationality;
d. the current and permanent address; and
e. such other information as may be specified by a relevant supervisory authority or regulatory body.

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Identification and Verification Methods for Natural Persons
Data to be collected Verification Methods
1. Full legal and any other Current Valid National Identity Card
names, including, marital Current Valid Passport
name, former legal Current valid driving licence- where the dealer is satisfied that the driving
name or alias licensing authority carries out a check on the holder’s identity before issuing
2. Date of birth the licence.
3. Gender In each case, the document must incorporate a photographic evidence of
4. Place of birth identity.
5. Nationality Where the legal person with which the natural person is associated is low or
6. Occupation and Name of standard risk, then the method of verification for each required piece of data
Employer (if self-employed, the will normally suffice and can be one of the above methods.
nature of the self-employment) However, where the legal person is high risk, or where a high-risk rating
7. Telephone number would otherwise be attached to the individual principal, then the methods of
verification will depend on the riskiness of the relationship and more than
one method will be necessary
For self-employed, any of the sources below should be used:
Trade Licence Business Registration Card

8. Current and Permanent Any of the identity sources listed below:

residential address (PO Box a recent utility bill issued to the individual by name;
addresses are not acceptable) a recent bank or credit card statement; or
a recent reference or letter of introduction from (i) a legal professional that
is regulated in Mauritius; (ii) a regulated financial services business which is
operating in an equivalent jurisdiction or a jurisdiction that complies with the
FATF standards; or (iii) a branch or subsidiary of a group headquartered in
a well-regulated overseas country or territory which
applies group standards to subsidiaries and branches worldwide, and tests
the application of, and compliance with, such standards.

‘Recent’ means within the last three months.

9. Government issued personal The relevant government document such as but not limited to any trade
identification number or other licence issued or TAN.
government issued unique identifier

(b) Non-Face-to-Face Transactions

It is most vital that the procedures adopted to verify identity of clients for non-face-to-face transaction is
at least, as robust as, those for face-to-face verification. Accordingly, in accepting transactions from non-
face-to-face clients, dealers should apply uniformly effective customer identification procedures as for
those mentioned above and other specific and appropriate measures to mitigate the higher risk posed
by non-face-to-face verification of clients.

In addition, for non-residents requiring services from abroad, details such as true name, current
permanent address, mailing address, telephone and fax number, date and place of birth, nationality,
occupation and name of employer (if self-employed, the nature of the self- employment),
signature/signatures and authority to obtain any data provided.

24
Documents provided should be duly certified as a true copy by a lawyer, accountant or other professional
person, who clearly adds to the copy (by means of a stamp or otherwise) his name, address and
profession to aid tracing of the certifier, if necessary, and which the dealer believes in good faith to be
acceptable to it for the purposes of certifying.

5.1.2 Legal Persons and Legal Arrangements

Legal persons refer, to any entities other than natural persons that can establish a permanent customer
relationship with a reporting entity, including a dealer or otherwise owning property. In Mauritius, a legal
person includes a company, a foundation, an association and a limited liability partnership. Legal
arrangements, on the other hand, refers to express trusts or other similar legal arrangements.
Examples of other similar arrangements (for AML/CFT purposes) include fiducie.

Regulations 5, 6 and 7 of the FIAML Regulations 2018 lay down specific requirements where an applicant
is a legal person or a legal arrangement.

(a) Legal persons (For example: Companies)

Dealers must, in relation companies, understand and document the nature of the company’s business, as
well as, the ownership and control structure. The following documents must be obtained to identify and
verify customers’ identify:

i. The name, legal form and proof of existence of the company;

ii. Powers that regulate and bind the customer;
iii. The names of persons having senior management positions; and
iv. The address of the registered office or principal place of business.

25
Identification and Verification Methods for Legal Persons
Person to be Data to be identified Verification Methods
identified
Underlying As per the requirements for natural As per the requirements for natural person
persons who are person
individuals. Dealers should collect identification Where the legal person with which the underlying
data in relation to the following: person is associated is low or standard risk, then
1. Directors the method of verification for each required piece
2. Beneficial Owner(s) of data will normally suffice and can be one of the
3. Significant Shareholders and above methods.
4. Authorised signatories.
In the absence of an authorised However, where the legal person is high risk, or
signatory, the identity of the relevant where a high-risk rating would otherwise be
person who is the senior managing attached to the individual principal, then the
officials. methods of verification will depend on the
Senior managing official means an riskiness of the relationship and more than one
individual, who makes, or method will be necessary
participates in making, decisions that
affect the whole, or a substantial part,
of the business of a customer or who
has the capacity to affect significantly
the financial standing of a client.

1. Legal status of body Certificate of incorporation (or other appropriate

2. Legal name of body certificate of registration or licensing);
3. Any trading names
4. Nature of business Memorandum and Articles of Association (or
equivalent);
5. Date and country of
incorporation/registration
Company registry search, including confirmation
6. Official identification number that the person is not in the process of being
(for example, company dissolved, struck off, wound up or terminated;
number)
1. Private 7. Registered office address Latest audited financial statements or equivalent;
companies 8. Mailing address (if different)
9. Principal place of business Annual report or equivalent;
2. Partnerships
/operations (if different)
10. Any other data, which the Personal visit to principal place of business;
3. Sociétés
dealer considers to be
reasonably necessary for the Partnership deed or equivalent;
4. Foundations
purposes of establishing the
5. Other legal
true identity of the legal Charter of Foundation;
persons person.
Acte de société;

Certificate of good standing from a relevant national

body;

Reputable and satisfactory third-party data, such as

a business information service

Any other source of information that to verify that the

document submitted is genuine.

26
 (b) Legal Arrangements (For example: Trusts)

In the case of trusts, certified extracts of the original trust deed or probate copy of a Will creating the
trust, documentary evidence pertaining to the appointment of the current trustees and the nature and
purpose of the trust. Additionally, the identity of the settlor, beneficiaries or class of beneficiaries and
where applicable the protector or enforcer and any other natural person exercising ultimate effective
control over the trust must be established and verified.

In the case of other legal arrangements, the dealer must identify and verify through reasonable means
the identity of the persons in equivalent or similar positions to those described for trusts above.

Identification and Verification Methods for Legal Arrangements

Person/ arrangement Data to be identified Verification Methods
to be identified
Underlying persons who As per the requirements for natural As per the requirements for natural
are individuals. person person

Underlying principals As per the requirements for legal As per the requirements for legal
who are legal persons persons above persons above

In circumstances where an applicant

for business which is a legal
arrangement acts or purports to act on
behalf of a legal person, then
identification and verification must
take place not just in respect of that
legal person, but also in respect of that
legal person’s underlying principles

Legal arrangement
1. Legal status of arrangement Trust deed or equivalent instrument
(including date of establishment) Official certificate of registration (if
2. Legal name of arrangement (if applicable)
applicable)
3. Trading or other given name(s) of Where the above proves insufficient, any
arrangement (if applicable) other document or other source of
4. Nature of business nformation on which it is reasonable to place
5. Any official registration or reliance in all the circumstances.
identifying number (if applicable)
6. Registered office address (if
applicable)
7. Mailing address (if different)
8. Principal place of
business/ operations (if
different)
9. Any other data which the dealer
considers to be reasonably
necessary for the purposes of
establishing the true identity of the
legal arrangement.

27
Dealers must seek and obtain assurances from the trustee/s (or controlling individual/s) that all data
requested by the Dealer, under the above process has been provided, and that the individual(s) will notify
the Dealer in the event of any subsequent changes.

Where identification information relating to a legal arrangement is not available from a public source, a
Dealer will be dependent on the information that is provided by the legal arrangement (usually through its
controlling individuals, such as trustees). Dealers should, accordingly, treat such information with care
and in any event in accordance with the legal arrangement risk assessment.

5.1.3 Establishing and Verifying Beneficial Ownership

Section 17E (3) of the FIAMLA defines a ‘beneficial owner’ as a natural person:
i. Who ultimately owns or controls a customer;
ii. On whose behalf a transaction is being conducted;
iii. Includes those natural persons who exercise ultimate control over a legal person or arrangement;
and
iv. Such other persons as may be prescribed.

In line with Regulation 6 of the FIAML Regulations, Dealers must identify and take reasonable measures
to verify the identity of the beneficial owners. This should be done by obtaining the following information:

a) The identity of the natural persons having an ultimate controlling ownership interest in the
company;

b) In the event the requirements of paragraph (a) cannot be fully satisfied, or where no natural person
has control through ownership interests, the identity of the natural person who exercises control
through other means; and

c) Where no natural person has been identified in (a) or (b), the identity of the natural person holding
a senior management position.

When gathering the above data, dealers must document the process, and difficulties encountered. Further
enquiries may be made for verification, such as verifying with the Registrar of companies, that the
company continues to exist and has not been, or is not in the process of being dissolved, struck off, wound
up or terminated, by conducting, in cases of doubt, a visit to the place of business of the company, to
verify that the company exists for a legitimate trading or economic purpose.

28
5.1.4 Individuals acting on behalf of Applicants for Business and Customers

There might be cases, where customers (particularly those who are legal persons) will have one or more
individuals authorised to act on their behalf in dealing with dealers. As mentioned previously, it is not
uncommon for third parties to purchase jewellery, precious metals or stones on behalf of another.

Dealers must have in place appropriate policies, procedures and controls to ensure that they are able to
identify and verify the identity of all persons purporting to act on behalf of customers, and to confirm the
authority of such persons. Dealers must, in the case of individuals acting on behalf of customers, obtain
identification data and verify that data, in line with guidelines provided above.

Where the dealer is unable to determine whether the customer is acting for a third party or not, it shall
make a suspicious activity report pursuant to section 14 of the FIAMLA to the Financial Intelligence Unit
(FIU).

5.1.5 Third Party Reliance

In order to rely on another regulated/supervised/monitored person to perform CDD measures in

accordance with section 17D of the FIAMLA, dealers must also ensure that the requirements of
Regulation 21 of the FIAML Regulations are fulfilled and that –

i. the necessary information required is obtained immediately;

ii. he is satisfied that copies of identification data and other relevant documentation related to
CDD requirements shall be made available from the third party upon request without delay;
iii. he is satisfied that the party is regulated and supervised or monitored for the purposes of
combating money laundering and terrorism financing and has measures in place for compliance
with CDD and record keeping requirements in line with the FIAMLA and FIAML
Regulations; and

iv. he shall not rely on a third party based in a high-risk country.

5.1.6 Inability to Establish Customer Identity

Where the dealer cannot obtain all the information required to establish the identity of the customer to
its full satisfaction, he shall not commence the business relation or perform the transaction and shall file
a STR with the FIU.

Moreover, if during the course of its business activities, the dealer has doubts about the veracity or
adequacy of previously obtained client identification data, he must continue verifying the identity of the
customer and beneficial owner before moving any further

29
5.2 Record Keeping

All dealers are required to keep records of all the transactions of all customers with whom they are
involved. The following records must be kept:

a) Records relating to the identification of customers and beneficial owners (e.g. copies or records
of official identification documents like passports, identity cards, driving licenses or similar
documents), as well as, business correspondence for at least 7years after the business
relationship has ended.

b) Records concerning transactions, both domestic and international shall be kept for a period of 7
years after the completion of the transaction; and

c) Copies of all STRs filed with the FIU shall also be kept for a period of at least 7 years from the
date the report was made.

5.3 Enhanced Due Diligence (EDD)

Regulation 12 of the FIAML Regulations 2018 provides that dealers shall implement internal controls and
other procedures to combat money laundering and financing of terrorism, including EDD procedures with
respect to high-risk persons, business relations and transactions and persons established in jurisdictions,
who do not have adequate systems in place to combat money laundering and financing of terrorism.

Where the ML/TF risks are identified to be higher, dealers shall take EDD measures to mitigate and
manage those risks.

The EDD measures that may apply for higher risk relationships should include:

(a) requesting additional information on the customer and updating on a frequent basis the
customer or the beneficial owner;

(b) obtaining additional information on the intended nature of the business relationship and the
source of fund/wealth;
(c) obtaining information on the intended or performed transactions;

(d) obtaining the approval of senior management to commence or continue the business
relationship;

(e) conducting close monitoring of the business relationship; and

(f) any other measures the dealer may undertake with relation to a high-risk relationship.

30
Where a dealer is unable to perform the required Enhanced CDD requirements, the latter shall terminate
the business relationship and file a STR under section 14 of the FIAMLA. See below for EDD measures
to applicable to Politically exposed Persons (PEPs). A list of enhanced due diligence measures can be
found at Annex 1a.

5.4 Simplified Due Diligence

In general, the full range of CDD measures should be applied by dealers. However, simplified CDD
measures can be implemented, in cases where lower risks have been identified. The simplified CDD
measures have to be commensurate with the lower risk factors and in accordance with any guidelines
issued by a regulatory body or supervisory authority.

Where a dealer determines that there is a low level of risk, he shall ensure that the low risk identified is
consistent with the findings of the National Risk Assessment or any risk assessment of his supervisory
authority or regulatory body, whichever is most recently issued. Importantly, simplified CDD shall not
apply where, a dealer knows, suspects, or has reasonable grounds for knowing or suspecting that a
customer is engaged in money laundering or terrorism financing or that the transaction being conducted
by the customer is being carried out on behalf of another person engaged in money laundering or terrorist
financing. The possibility of applying simplified CDD is not an exemption. It only allows for the application
of reduced measures. The ultimate decision rests with the dealer and there may be instances, depending
on the level of risk and all the known circumstances (a high-risk relationship e.g. PEP will be dealt with
more caution rather than the routine CDD measures), where it is inappropriate to adopt these simplified
measures. Under all circumstances, dealers must keep the client risk assessment up to date and review
the appropriateness of CDD obtained even if simplified CDD measures are adopted. Dealers are required
to keep the risk assessment and level of CDD requirements under review and the level of risk of the CDD
measures should be consistent with the risk of the relationship. Where simplified CDD measures are
adopted, dealers should apply a risk-based approach to determine whether to adopt the simplified CDD
measures in a given situation and/or continue with the simplified measures, although these customers’
accounts are still subject to transaction monitoring obligations.

5.5 Politically Exposed Persons (PEPs)

PEPs are individuals, who are or who have been entrusted with prominent public functions from foreign,
domestic and international organisation, as well as, the close relatives and associates of such persons.
Pursuant to the FIAML Regulations 2018, PEPs have been classified as “domestic PEPs,” “foreign PEPs”
and “international organization PEPs” in the FIAML Regulations.

31
5.5.1 Types of PEPs

(a) Domestic PEPs

A domestic PEP means a natural person, who is or has been entrusted domestically with prominent public
functions in Mauritius and includes the Head of State and of government, senior politicians, senior
government, judicial or military officials, senior executives of state-owned corporations, important political
party officials and such other person or category of persons as may be specified by a supervisory authority
or regulatory body after consultation with the National Committee.

Examples of who may be a PEP

- Heads of state
- Heads of government
- Ministers and deputy or assistant ministers
- Members of parliament or similar legislative bodies
- Members of governing bodies of political parties
- Members of supreme courts, or any judicial body whose decisions are not subject to further
appeal, except in exceptional circumstances
- Members of courts of auditors or of the boards of central banks
- Ambassadors, charges d' affaires and high-ranking officers in the armed forces
- Members of the administrative, management or supervisory bodies of state-owned
enterprises
- Directors, deputy directors and members of the board of equivalent function of an international
organization

(b) Foreign PEPs

Foreign PEPs have the same definition as above in,so far as, they are entrusted with prominent public
function by a foreign country.

(c) International Organization PEPs

An “international organization PEP” means a person, who is or has been entrusted with a prominent
function by an international organization and include members of senior management or individuals, who
have been entrusted with equivalent functions including directors, deputy directors and members of the
board or equivalent functions and such other person or category of person as may be specified by a
supervisory authority or regulatory body after consultation with the National Committee.

32
 (d) Close Associates and Family members

As provided by regulation 15(5) FIAML Regulations, in addition to the primary PEPs listed above, a PEP
also includes close associates and family members.

i. Close associates mean- an individual who is closely connected to a PEP, either socially or
professionally; and any other person as may be specified by a supervisory authority or regulatory
body after consultation with the National Committee.
ii. Family members mean- an individual who is related to a PEP either directly through consanguinity,
or through marriage or similar forms of partnership; and
iii. any other person as may be specified by a supervisory authority or regulatory body after
consultation with the National Committee.

5.5.2 PEPs and Due Diligence Measures

Business relationships with PEPs pose a greater than normal money laundering risk to dealers, by virtue
of the possibility for them to have benefitted from proceeds of corruption, as well as the potential for them
(due to their offices and connections) to conceal the proceeds of corruption or other crimes.

As such, dealers are required to have a clear policy in relation to transactions involving such persons.
Dealers must, therefore, establish appropriate risk management systems to determine, whether the
customer or beneficial owner is a PEP. Regulation 12 of the FIAML Regulations prescribe that when
dealing with domestic or international organization PEPs, the following EDD measures must be applied,
in addition to the normal CDD measures applicable under the Regulations:

(a) reasonable measures must be taken to determine whether a customer or the beneficial owner is
a PEP; and

(b) in cases when there is higher risk business relationship with a domestic PEP or an international
organization PEP, adopt the measures listed below:

- obtain senior management approval before establishing or continuing, for existing customers,
such business relationships;
- take reasonable measures to establish the source of wealth and the source of funds of

customers and beneficial owners identified as PEPs; and

- conduct enhanced ongoing monitoring on that relationship

Additionally, dealers shall apply all the above measures to family members or close associates of all types
of PEP.

33
5.6 Reporting Suspicious Transactions

Pursuant to Section 14 of FIAMLA, dealers are obliged to file STRs, as soon as, they become aware of
a suspicious transaction. An STR must be filed not later than 5 working days after the suspicion arose.
Failure to report an STR or failure to reasonably become aware of a suspicious transaction are both
offences under the FIAMLA.

The FIU has an approved form for the filing of STRs, which in accordance with section 15 of the FIAMLA,
is to be used for reporting suspicious transactions. A copy of the form is available on the website of the
FIU on the link below:
STR_FORM_FINAL_VERSION.pdf (fiumauritius.org)

Information on the manner in which a STR shall be reported is contained in the FIU’s Guidance Note No.
3 which is also available on the FIU’s website.

5.6.1 Suspicious Transaction

Under the FIAMLA, a suspicious transaction is one, which gives rise to a reasonable suspicion that it may
involve -

(a) the laundering of money or the proceeds of any crime; or

(b) funds linked or related to, or to be used for, the financing of terrorism or proliferation financing or
any other activities or transaction related to terrorism as specified in the Prevention of Terrorism
Act or under any other enactment whether or not the funds represent the proceeds of crime
Additionally, suspicious transactions:
(c) are made in circumstances of unusual or unjustified complexity;
(d) Appear to have no economic justification or lawful objective;
(e) Are made by or on behalf of a person, whose identity has not been established to the satisfaction
of the person with whom the transaction is made; or
(f) Gives rise to suspicion for any other reason.

A transaction includes:
(a) opening an account, issuing a passbook, renting a safe deposit box, entering into a fiduciary
relationship or establishing any other business relationship, whether electronically or otherwise; and
(b) a proposed transaction or an attempted transaction.

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Ongoing Monitoring

The ability to file an STR of good quality is heavily reliant on the robustness of the systems put in place
by the dealer. In fact, dealers are required to scrutinize transactions undertaken throughout the course of
a business relationship, including where necessary the source of funds to ensure that the transactions
are consistent with his knowledge of the customer. As part of the monitoring of transactions, dealers
must examine the background and purpose of each transaction, especially where these are complex,
unusually large or conducted in unusual patterns. Equally, they must pay attention to transactions that
do not seem to have an apparent economic or lawful purpose.

5.6.2 Request for Information by the FIU

As per sections 19FA and 19J of the FIAMLA, a regulatory body may require any member of a relevant
business or profession and any member falling under its purview respectively to furnish any information
and produce any record or document within such time as it may determine.
Failing to comply with such requirement may constitute an offence punishable by a fine not exceeding
one million rupees and to imprisonment for a term not exceeding 2 years.
Under section 13(2) (a) and 13(2)(b) of FIAMLA, the Director of the FIU may request additional information
from dealers, who submitted the STRs or from any other reporting person, who is, or appears to be,
involved in the transaction. Also, pursuant to section 13(3) of the FIAMLA, the Director of the FIU can
request information from dealers, whenever it becomes aware of information that may give rise to
reasonable suspicion of ML/TF offences, or has received a request from investigatory/supervisory
/overseas FIU/government agencies. The information sought for, under the above sections shall, as soon
as practicable but not later than 15 days, be furnished to the FIU.
Also, in line with section 13(6) of the FIAMLA, the FIU may order dealers to be informed if a person has
been their client, or has acted on behalf of their client; or whether a client of the dealer has acted for a
person.
If dealers fail to supply any information requested by the FIU under section 13(2), 13(3) or 13(6) of
FIAMLA, they commit an offence and shall, on conviction, be liable to a fine not exceeding one million
rupees and to imprisonment for a term not exceeding 5 years as provided for in section 19 and 32A of the
FIAMLA. Furthermore, the falsification, concealment, destruction or disposal of any document or material
which is likely to be relevant to a request under Section 13(2), (3) or (6) also consists of an offence under
the FIAMLA.

5.6.3 Protection of Information

Confidentiality is a key success factor for the operations of the FIU. In this context, the FIU has put in
place a proper Program Level Security and a System Level Security Policies and Procedures. Under the
Program Level Security (based on protection afforded under the law), and in line with section 30(1) of the

35
FIAMLA, the Director, every officer of the FIU, the Chairperson and members of the Board shall take an
oath of confidentiality before they begin to perform their duties. They should maintain during and after
their relationship with the FIU, the confidentiality of any matter relating to the relevant enactments. Section
30(2) of the FIAMLA further provides that no information from which an individual or body can be identified
and, which is acquired by the FIU in the course of carrying out its functions, shall be disclosed except
where disclosure appears to the FIU to be necessary to enable it to carry out its functions, or in the
interests of the prevention or detection of crime, or in connection with the discharge of any international
obligation to which Mauritius is subjected to. More so, in view of preserving the confidentiality of
information disseminated, at the time of disclosure of intelligence to recipients, the FIU imposes terms
and conditions on the usage of such intelligence in line with section 30(2A) of FIAMLA. Any breach of this
section shall be punishable by a fine not exceeding Rs1 million and to imprisonment for a term not
exceeding 3 years. Additionally, under the Program Level Security, the FIU has adopted clear policies on
recruitment and termination of employment of staff.
5.6.4 Tipping Off

After making a STR to the FIU, section 16(1) of FIAMLA prevents dealers and any of their officers from
informing anyone, including the customer, about the contents of a STR or even discloses to him that
he/she has made such a report or information has been supplied to the FIU pursuant to the request made
under section 13(2), 13(3) or 13(6) of FIAMLA. It shall amount to an offence under the Act punishable by
a fine not exceeding five million rupees and to imprisonment for a term not exceeding 10 years.
Appropriate enquiries of a customer, conducted in a discreet manner, in relation to rthe background of a
transaction or activity, which has given rise to the suspicion forms an integral part of CDD and on-going
monitoring, and should not give rise to tipping off. If the employee suspects that CDD will tip off the client,
the employee should stop conducting CDD and instead the dealer should immediately file an STR with
the FIU.
5.7 Registration with the FIU

In line with section 14C of the FIAMLA, the dealer must register with the FIU, within such time, form and
manner as may be prescribed. The Financial Intelligence and Anti Money Laundering (Registration of
Reporting Persons) Regulations 2019 were made on 5th November 2019 to this effect. All dealers under
the FIAMLA must register with the FIU in accordance with the time frames which shall be specified by the
FIU.

5.8 Cash Prohibition

Dealers shall not make or accept any payment in cash in excess of 500,000 rupees or an equivalent
amount in foreign currency pursuant to section 5 of FIAMLA. Under FIAMLA, "cash" means money in
notes or coins of Mauritius or in any other currency; and it includes any cheque, which is neither crossed
nor made payable to order whether in Mauritian currency or in any other currency. 6. Terrorist Financing
Offences

36
6. Terrorist Financing Offences

6.1 Introduction

Terrorist organizations require funds to plan and carry out attacks, train militants, pay their operatives and
promote their ideologies. The Convention for the Suppression of the Financing of Terrorism Act and the
Prevention of Terrorism Act criminalize the financing of the terrorism in Mauritius. Additionally, the UN
Sanctions Act provides the legal framework for implementing targeted financial sanctions imposed by the
United Nations Security Council.
6.2 Extension of Obligations

According to section 19H & K of the FIAMLA, a dealer falling under the purview of a regulatory body must
ensure compliance with the UN Sanctions Act. Dealers should be aware that once a person has been
designated domestically or listed by the UN, it is an offence to deal with the funds or other assets of such
a person. It is also an offence to make funds or other assets available to a designated party or listed party.
As soon as there is a designation or a listing, two prohibitions prevail under the UN Sanctions Act:

A prohibition to deal with the funds or other assets of the designated or listed party under Section
23; and
A prohibition to make available funds or other assets to the designated or listed party under Section
24.

The prohibitions to apply to all persons (including all dealers)

Under the UN Sanctions Act, there are also several reporting obligations which apply to dealers. These
are set out below.

6.3 Reporting obligations

Where any person holds, controls or has in his custody or possession any funds or other assets of a
designated party or listed party, he/she shall immediately notify (section 23(4) UN Sanctions Act) the
National Sanctions Secretariat of:
i. details of the funds or other assets against which action was taken against;
ii. the name and address of the designated party or listed party; and
iii. details of any attempted transaction involving the funds or other assets, including- the name
and address of the sender the name and address of the intended recipient the purpose of the
attempted transaction the origin of the funds or other assets where the funds or other assets
were intended to be sent.

37
The reporting obligations continue under section 25 of the UN Sanctions Act, which says that a reporting
person shall immediately verify whether the details of the designated or listed party match with the
particulars of any customer and if so, identify whether the customer owns any funds or other assets in
Mauritius. A report has to be submitted to the National Sanctions Secretariat regardless of whether any
funds or other assets were identified by the reporting person.

The NSS has made available forms for reporting under Section 23(4) and Section 25(2) of the UN
Sanctions Act. These forms can be accessed under the “Guidelines” tab of the NSS website:
Index (govmu.org)

Additionally, the forms are also accessible on the FIU website:

FIU - Targeted Financial Sanctions (fiumauritius.org)

Contact details for the National Sanctions Secretariat:

National Sanctions Secretariat
Prime Minister’s Office (Home Affairs)
Fourth floor
New Government Centre
Port Louis

Phone Number: (+230) 201 1264 / 201 1366

Fax: (+230) 211 9272
Email: [email protected]

6.4 Reporting of Suspicious Information

Pursuant to section 39 of the UN Sanctions Act, any information related to a designated party or listed
party, which is known to the dealer, should be submitted to the FIU in accordance with section 14 of the
FIAMLA. For more information on how to file an STR please refer to Section 5.6 of this guideline.

6.5 Internal controls

Section 41 of the UN Sanctions Act states that a reporting person shall implement internal controls and
other procedures to enable it to effectively comply with their obligations under this Act. As such, when a
dealer designs his AML/CFT program, detailed in the previous section, he must also ensure that he
incorporates policies and procedures to ensure that he is not engaging in any transactions with designated
or listed parties. Each of the building blocks of his AML/CFT program must also take into account the
obligations under the UN Sanctions Act and the dealer must have systems, which will allow him to screen
customers against the lists of designated or listed parties maintained by the NSS on its website.
Additionally, any dealer already registered with the FIU will also receive any changes to these lists as
soon as these are made.

38
7. ML/TF Indicators for Dealers

There are a number of situations, which may give rise to a suspicion that a transaction may involve money
laundering. The list of situations, given below, is meant to assist dealers to detect/identify suspicious or
unusual transactions in the conduct of their operations and business activities. It is not a prescriptive list
of all possible transactions linked to money laundering or terrorism financing. Nor does it imply that the
transactions listed below are necessarily linked to such activities. The role of dealers is to be familiar with
these indicators, and exercise sound judgment, based on their knowledge of the precious metals and
stones industry, and where they identify any “suspicious or unusual transactions”, to know the proper
action to take.
7.1 General Indicators
- Client indiscriminately purchases merchandise without regard for value, size, or color of precious
stones.
- Purchases or sales that are unusual for client or supplier.
- Unusual payment methods, such as large amounts of cash, multiple or sequentially numbered
money orders, traveler's checks, or cashier's cheques, or payment from third-parties.
- Attempts by client or supplier to maintain high degree of secrecy with respect to the transaction,
such as request that normal business records not be kept.
- A client orders item, pays for them in cash, cancels the order and then receives a large refund.
- A client asking about the possibility of returning goods and obtaining a cheque (especially if the
client requests that cheque be written to a third party).
- A client paying for high-priced jewellery or precious metal with cash only.
- A client not asking for a reduced price or negotiating over the list price, in circumstances where
such practices are traditional or common.
- Purchase appears to be beyond the means of the client based on his stated or known occupation
or income.
- Client may attempt to use a third-party cheque or a third-party credit card.
- Funds come from an offshore financial centre rather than a local bank.
- Large or frequent payments made in funds other than rupees.
- Transaction lacks a business purpose.
- Purchases or sales that are not in conformity with standard industry practice.
7.2 Indicators for Wholesalers
- The funds come from an offshore financial centre instead of a local bank.
- Over or under-invoicing, structured, complex, or multiple invoice requests, and high-dollar
shipments that are over or underinsured.
- Unwillingness by a supplier to provide complete or accurate contact information, financial
references or business affiliations.
- Counterpart presence, such as an affiliated store or branch or associate, in non-cooperative
countries and territories or countries that are the subject of advisories issued by the FATF.

39
Annex 1. Risk Assessment Form for Dealers

Name of Dealer: _______________________________________________

The Financial Intelligence Anti-Money Laundering Act requires dealers to conduct a risk assessment
of your exposure to money laundering and terrorism financing and apply corresponding mitigation and
controls. This checklist is meant to assist you in meeting these obligations. This form is presented as
an example only. You may choose to conduct your risk assessment using a different approach.

Instructions: When you answer yes to one of the questions, this situation or client is considered higher
risk and a control measures to reduce the risk should be applied. For each higher risk client or situation,
a suggested control measure is proposed. You can adapt the control measures to correspond to your
business (see Annex 1.A for a list of control measures).

The results of this risk assessment should be communicated to all owners, managers and employees
in your business that deal with clients. The training should include a review of what is considered higher
risk and the corresponding control measures. The date of the training should be documented. You
should review your risk assessment every two years.

40
Risk Assessment
Higher risk clients and situations Yes No Suggested Control Measures
Higher Moderate
risk Risk
Clients

Are your clients foreigners? Determine if individuals are politically exposed

persons.5
Obtain additional information on source of funds or
source of wealth.
Do you have clients who are politically Obtain senior management approval to conduct the
exposed persons? transaction.
Obtain additional information on source of funds or
source of wealth.
Conduct enhanced on-going monitoring
Is your client a company, trust, foundation, Obtain name of natural person(s) behind
partnership or other structure that makes it company, trust or other legal arrangements.6
difficult to determine who is the beneficial Obtain additional information on organizational
owner (the natural person who owns or structure.
controls the funds or property)? Obtain additional information on source of funds or
source of wealth.

Are your clients intermediaries (i.e. lawyers Obtain name of person(s) on whose behalf the
and accountants acting on behalf of clients)? transaction is being conducted.
Verify that the intermediary has the necessary
documentation to act on behalf of the client.
Obtain additional information on source of funds or
source of wealth.

Has one of your clients been named in the File Suspicious Transaction Report (STR).
media as being involved with criminal Obtain additional information on source of funds or
organizations or having committed a crime? source of wealth.

Do you have a client that is purchasing Obtain additional information on source of funds or
precious metals and stones that is not within source of wealth.
his or her means based on his stated
occupation or income?
Do your clients that engage in activities that Consider filing a Suspicious Transaction Report
are consistent with the indicators identified (STR).
for Suspicious Transactions? Obtain additional information on source of funds or
(See Guidance Note on AML/CFT Guidance source of wealth.
on Suspicious Transaction Reports for
suspicious transactions indicators and the
indicators listed in this guideline).
Link to the Guidance note:
Annexure III (fiumauritius.org)

5
Pursuant to FIAMLA, you are required to ascertain whether all clients and beneficial owners are politically exposed persons.
The mitigation measure is suggested here for emphasis.
6
For further information on how to comply with your beneficial ownership obligations please consult the Guideline on the
Prevention of Money Laundering and Countering the Financing of Terrorism in the Jewellery Sector.

41
Products, services and transactions

Do you undertake high value Pay special attention for unusual transaction and
transactions? ML/TF indicators.
Obtain additional information on source of funds or
source of wealth.
Do you sell gold bars or loose diamonds? Pay special attention for unusual transaction and
ML/TF indicators.
Obtain additional information on source of funds or
source of wealth.
Geographic Risk

Are any of your clients or the source funds Obtain senior management approval to proceed
originate from countries subject to with the transaction.
sanctions, embargoes or similar measures Ask for additional information, piece of identification
issued by Mauritius or International to confirm the identity.
Organizations such as the United Nations Obtain additional information on source of funds or
(“UN”). source of wealth.

Mauritius:
FIU - Home (fiumauritius.org)
United Nations:
United Nations Security Council
Consolidated List | United Nations
Security Council
Do any of your clients or the source funds Obtain senior management approval to proceed
originate from foreign jurisdictions known with the transaction.
for high levels of financial secrecy or Ask for an additional piece of identification to
jurisdictions with low tax rates? confirm the identity.
Obtain additional information on source of funds or
Research and Analysis (imolin.org) source of wealth.

Corporate Tax Haven Index 2021

(taxjustice.net)
Do any of your clients or the source funds Obtain senior management approval to proceed
originate from foreign jurisdictions with the transaction.
identified by the Financial Action Task Ask for an additional piece of identification to
Force (FATF) as having strategic confirm the identity.
deficiencies in the fight against money Obtain additional information on source of funds or
laundering or subject to an FATF source of wealth.
statement?

FATF:
Documents - Financial Action Task
Force (FATF) (fatf-gafi.org)

42
 Do any of your clients or the source funds Obtain senior management approval to proceed
originate from jurisdictions identified by with the transaction.
credible sources (for example international Ask for an additional piece of identification to
organizations such as the UN, credible confirm the identity.
news reports) as providing funding or Obtain additional information on source of funds
support for terrorist activities? or source of wealth.

Do any of your clients or the source funds Obtain senior management approval to proceed
originate from countries identified by with the transaction.
credible sources as having significant Ask for an additional piece of identification to
levels of corruption, or other criminal confirm the identity.
activity? Obtain additional information on source of funds or
source of wealth.
Are any of your clients or the source funds Obtain senior management approval to proceed
originate from a high level of financial with the transaction.
secrecy? Ask for an additional piece of identification to
View 2020 results (taxjustice.net) confirm the identity.
Obtain additional information on source of funds or
source of wealth.
Delivery Channel and Business Practices

Do you accept cash? Confirm source of funds

Set limits to cash transaction amounts recognizing
the 500,000rupee cash prohibition outlined in the
FIAMLA.
Request bank drafts instead of accepting large
amounts of cash.
Do you conduct transactions where you Deliver comprehensive AML/CFT training to your
do not meet the client? employees specifically focused on client due
diligence requirements
Ask for an additional piece of identification to
confirm the identity.
Confirm the beneficial owner (the natural person
who owns or controls the funds or property)
Confirm that any intermediary has the necessary
documentation to act on behalf of the client.
Conduct periodic review of records to ensure that
client due diligence requirements are adequately
implemented
Do you have clients that are referred to Conduct client due diligence measures directly.
you by a third party? Conduct periodic review of records to ensure that
client due diligence requirements are respected by
third party if you rely on them for due diligence
measures.
Do you have short-term or part-time Include AML/CFT obligations in job descriptions and
employees? performance reviews.
Deliver comprehensive AML/CFT training for all
employees
Other risk factors: (list any additional
factors)

_____________________________ _____________________________
Signature of the Dealer Date

Date of employee training: ______________________________

43
Annex 1A - Examples of Risk Control Measures

1. Obtain senior management or compliance officer approval to proceed with the transaction.

2. Ask for an additional piece of identification to confirm the identity.

3. Obtain name of natural person(s) behind company, trust or other legal arrangement.

4. Monitor if client conducts additional transactions.

5. Obtain information on source of funds or source of wealth of the client.

6. Deliver more frequent employee training.

7. Monitor AML/CFT legislative and regulatory changes.

8. Include AML/CFT obligations in job descriptions and performance reviews.

9. Set limits to cash transaction amounts (less than the 500,000 rupees prohibition).

10. Request bank drafts instead of accepting large amounts of cash.

11. Conduct transaction only in person.

12. Obtain appropriate additional information to understand the client’s business or circumstances.

13. Conduct transaction only in person.

14. Carrying out additional searches (e.g. internet searches using independent and open sources) to
better inform the client risk profile (provided that the internal policies of accountants should enable
them to disregard source documents, data or information, which is perceived to be unreliable).

15. Obtaining additional information and, as appropriate, substantiating documentation, on the

intended nature of the business relationship.

16. Obtaining information on the source of funds and/or source of wealth of the client and clearly
evidencing this through appropriate documentation obtained.

17. Obtaining information on the reasons for intended or performed transactions.

18. Conducting enhanced monitoring of the business relationship, by increasing the number and
timing of controls applied, and selecting patterns of transactions that need further examination.

19. Requiring the first payment to be carried out through an account in the client’s name with a bank
subject to similar CDD standards.
20. Enhanced CDD may also include lowering the threshold of ownership for beneficial ownership
purposes, to ensure complete understanding of the control structure of the entity involved. It may
also include looking further than simply holdings of equity shares, to understand the voting rights
of each party who holds an interest in the entity.

44
Annex 2: Template for AML/CFT Policies and Procedures

Address | City Postal Code| Telephone

Email

NAME OF ENTITY

Risk Assessment and Risk mitigation (Section 17 of the Financial intelligence Anti-Money
Laundering Act (FIAMLA))

Describe how you will comply with your risk assessment and risk mitigation obligations including:

Identifying what clients and situations you have identified as higher risk (copy of the risk assessment
should be attached)
What mitigation and control measures you will be implementing to reduce the risk
How you will document the risk of any new product or services
How often you will update the risk assessment

See How to conduct a risk assessment in the precious metals and stones sector for additional guidance
(Please refer to Annex 1).

Customer due diligence (CDD): (section 17C of the FIAMLA)

Describe how you will comply with CDD requirements including:

When will you identify the buyer and seller of a transaction?

What information will you collect when you identify a natural person?
What information will you collect when you identify a legal persons and legal arrangements?
What identification documents are acceptable?
Only original documents will be acceptable
How will you identify clients that are not physically present?
What will you do if you cannot complete customer due diligence measures?

45
Record Keeping (Section 17F of FIAMLA)

Describe how you will comply with record keeping requirements including:

How long will you retain records related to transactions?

What records will you retain?
Where will records be retained?
How will you ensure that information can be provided in a timely manner to the Financial
Intelligence Unit, the police and other competent authorities?
If you are using a third party to conduct customer due diligence measures:
o How you will ensure that they are properly identifying clients?
o How you will gain access to information in a timely fashion?

Enhanced due diligence (Regulation 12 of the Financial Intelligence Anti-Money Laundering

Regulations (FIAMLR))

Describe how you will comply with enhanced due diligence requirements including:

How you will apply enhanced due diligence measures to:

o Persons or transactions involving a country identified as higher risk by FATF
o Persons or transactions involving higher risk countries for ML, TF, corruption or subject to
international ML/TF
o Any other situation representing a higher risk of ML/TF based on your risk assessment

What enhanced due diligence measures will be applied in those circumstances?

Politically Exposed Persons (Regulation 15 of the FIAMLR)

Describe how you will comply with enhanced due diligence requirements related to politically exposed
persons including:

What is a politically exposed person?

How you will identify politically exposed persons?
How you will seek approval from senior management?
How you will take adequate measures to establish source of wealth and source of funds?
How you will conduct enhanced ongoing monitoring?

46
Ongoing monitoring (Section 3 (e) of the FIAMLR)

Describe how you will comply with ongoing monitoring requirements including:

How you will conduct ongoing monitoring for:

o Business relationships (typically after 2 transactions)

o Complex and unusual transactions
o Unusual patterns of transactions which have no economic or lawful purpose?
How you will record the findings?

Suspicious transaction reporting (Section 15 of the FIAMLA)

Describe how you will comply with suspicious transaction reporting requirements including:

What is a suspicious transaction?

How you and your employees/agents will identify suspicious transactions (should refer to ML/TF
indicators)
Who is your Money Laundering Reporting Officer?
How employees/agents should raise suspicions to the reporting officer?
Specify that you cannot communicate that an STR has been filed with the FIU

Training (Regulation 22 (1) (c) of the FIAMLR)

Describe how you will comply with training requirements including:

How you will screen employees to ensure high standards before hiring
How you will train employees/agents on:
o How to identify a suspicious transaction?
o What are the AML/CTF obligations?
o How to implement your policies and procedures?

47
Terrorist Financing Obligations (Section 25 (1) of the UN Sanctions Act 2019)

Describe how you will comply with training requirements including:

o How you will screen against UN Sanctions List?
o How you will report to the National Sanctions Secretariat?
o How you will report to the FIU?

Policies and procedures (Section 22 (1) (c) of the FIAMLR)

Describe the following regarding your policies and procedures:

How you will communicate the policies and procedures to employees and staff as well as
branches and subsidiaries
How you will reflect changes to AML/CTF legislative and regulatory requirements
How often you will update your policies and procedures

48
 CONTACT DETAILS

Financial Intelligence Unit

Compliance Division

10th Floor SICOM Tower Ebene Cybercity

Republic of Mauritius
Telephone: (230) 454 1423
Fax: (230) 466 2431
Email: FIU - Compliance (fiumauritius.org)

49