We are not a rock-island offshore financial centre, says Mauritius

In response to Pranay Gupte’s story on a story published by Firstpost, the Secretary to the Mauritius cabinet, S Seebaluck, has rebutted some of the points made in the story titled: “ Mauritius cracks whip on Muslims, not a’ role model of democracy’ as PM Modi said after all.” The following is the slightly edited text of the letter: The government of Mauritius is deeply concerned by the content of the article which is largely inaccurate and portrays a very negative image of our democratic system as well as that of our financial centre. The government of Mauritius rejects the allegations made in this article as well as the reference made to Mauritius as ’the global capital of money laundering’ . We wish to inform you that Mauritius has put in place a robust and proven regulatory system which is fully dedicated to combating money laundering or illicit transactions. To this end, in 2002, the government introduced the Financial Intelligence and Anti Money Laundering Act (FIAMLA). Other supporting legislations that are in place include the Prevention of Corruption Act 2001 and the Prevention of Terrorism Act 2002. The Financial Intelligence Unit was equally established under FIAMLA in 2002. In addition, Mauritius also adheres to international best practices with respect to money laundering through its compliance to the Financial Action Task Force (FATF).  We would like to draw your attention that the GDP of Mauritius amounts to approximately US$ 12.66 billion for 2014. The interpretation made in your article, stating that ‘of this amount (its GDP), the country (Mauritius) sends US$ 10 billion to India alone’ is completely erroneous. First, as per the latest statistical review of the Foreign Investment Promotion Board (FIPB) of India, Mauritius accounted for USD 7.66 billion towards Indian FDI in 2014. Second, it should be emphasised that cross border investments using the Mauritius Financial Centre are not directly captured in the GDP calculation of the country. It would, therefore, be completely erroneous to say that US$ 10 billion out of the US$ 12.66 billion of our GDP is going to India. You may wish to note that Financial Services accounted for only 10.3 percent of our GDP in 2014, with an estimated contribution of 4 percent from global business/cross-border transactions.  It should equally be noted that the Mauritian economy is set on very strong pillars and the country has a broad, resilient, dynamic and fully diversified economy. Mauritius is definitely not a rock-island offshore centre but one of substance in which financial services make positive contributions to the national economy. While Mauritius has been the preferred financial centre of choice for cross-border investment in many emerging countries, including India, due care has always been exercised in ensuring that no illicit money or transactions go through our financial centre. In this respect, the Financial Services Commission (FSC) was created in 2001 and operates as one of the most reliable and stringent regulatory bodies. Mauritius has equally demonstrated exemplary collaboration initiatives with Indian authorities to prevent round-tripping transactions. In an effort to further enhance transparency and transfer of effective information, Mauritius has also walked the extra mile by becoming the first country to have a permanent seat of the Indian Tax Office outside India. Banking institutions operating in the country are required to comply fully with the set of norms, standards and guidelines as stipulated by the Bank of Mauritius, including the Capital Adequacy Ratio. It is crucial for banks to respect and operate within the established norms, in the best interest of its clients and to safeguard the reputation of the Mauritius banking system, failing which the Bank of Mauritius takes necessary action. Mauritius also remains a democratic model of reference. Government has always promoted proactive relations with the private sector, which has a crucial role to play in our economic development. Dialogue at various levels is encouraged in policy decision-making. At no point in time has any private sector operator been unduly restrained in the conduct of its lawful business activities, unless on grounds of non-compliance with set norms and regulations and in the best interest of the public. In the case of the Bramer Bank, its license was revoked by the regulator, the Bank of Mauritius, on the grounds clearly spelt out in the Banking Act, as the regulator was satisfied that the business of the bank was being carried out in a manner that posed serious systemic risks to the domestic financial system. The Financial Services Commission, the regulator of the insurance industry, in strict conformity with the Insurance Act, placed the BAI Co Ltd under the control of a Conservator to safeguard the interests of thousands of insurance policyholders. It is wholly untrue to allege that the regulators’ acts or those of the government of Mauritius were motivated by ethnic or other extraneous considerations. S Seebaluck, GOSK Secretary to Cabinet And Head of the Civil Service Republic of Mauritius