Implementation of Targeted Financial Sanctions
The United Nations (Financial Prohibitions, Arms Embargo and Travel Ban) Sanctions Act 2019 (the ‘Act’) provides the legal framework for the Government of Mauritius to implement targeted sanctions, including financial sanctions, arms embargo and travel ban, and other measures imposed by the United Nations Security Council under Chapter VII of the Charter of the United Nations, with a view to addressing threats to international peace and security, including terrorism, the financing of terrorism and proliferation of weapons of mass destruction. It came into effect on 29 May 2019. The Act makes provision for two regimes – one for the implementation of UN Sanctions (‘The UN Regime’) and one for the implementation of domestic sanctions (‘The Domestic Regime’).
The United Nations has established a list of parties (‘Listed Parties’) against which targeted sanctions have been imposed. The United Nations Security Council Consolidated List (The Consolidated List) may be accessed at the following link: https://www.un.org/securitycouncil/content/un-sc-consolidated-list. Additionally, the list is also available on the FIU website, and is disseminated to reporting persons, investigatory authorities, supervisory authorities and any other relevant public and private agencies, registered on the goAML platform. In the UN Regime, once there is a listing, the two prohibitions provided for under the Act at Sections 23 and 24 operate immediately. There is no need for a freezing order in the UN regime.
Under the domestic regime, the Act enables Mauritius to make domestic decisions for declaring a person as a designated party on a domestic list. This decision making is independent of the UN. The decision is taken by the authorities which are so empowered under Act, by applying criteria which are also set out thereunder. In the Domestic Regime, as soon there is a declaration, the two prohibitions provided for under the Act come into operation. However, under this regime, there is the need for the Secretary of Home Affairs to apply for a freezing order against the funds or other assets of the designated party.
Pursuant to Section 18 of the Act, the National Sanctions Secretariat, established under Section 7 of the Act gave public notice of the Consolidated List. Simultaneously, it has issued an Explanatory Note on the implementation of United Nations Sanctions Measures which have been published in the Government Gazette of 5 October 2019.
Both documents can be consulted here. As a result of this Notice, the financial prohibitions under Sections 23 and 24 of the Act apply immediately. These are the following:
- Prohibition to deal with the funds or other assets of Listed Parties under section 23 of the Act;
- Prohibition to make funds or other assets available to Listed Parties under section 24 of the Act.
Reporting Persons are required to regularly consult the Consolidated List and take immediate action with respect to any changes brought thereto. They must also regularly consult the newspapers for any notice which may be issued by the National Sanctions Secretariat and immediately act upon it.
Reporting Persons are reminded of the following obligations imposed under the Act:
(i) Reporting obligations
- Reporting persons must immediately (i.e. without delay and not later than 24 hours), verify whether the details of the Listed Party match with the particulars of any of its customer;
- If there is a positive match, the reporting person must identify whether the customer owns any funds or other assets with it, including the funds or assets mentioned in section 23(1);
- The reporting person is required to make a report to the National Sanctions Secretariat and their AML/CFT supervisor (in the case of the categories highlighted above, this is the FIU) where funds or other assets have been identified by it.
- A nil report must be submitted to the above authorities if no funds or other assets are identified.
(ii) Reporting of suspicious information
A reporting person must immediately submit to the FIU in accordance with section 14 of the Financial Intelligence and Anti-Money Laundering Act, any information relating to a Listed Party which is known to it. This is in addition to the above reporting obligations.
(iii) Internal controls
Reporting persons must implement internal controls and other procedures to enable it to effectively comply with the obligations under the Act.
The FIU is required, under section 40(2) of the Act, to supervise and enforce compliance by reporting persons falling under its AML/CFT purview with the requirements imposed under the Act. Failure to comply with the Act is an offence.