Yandraduth Googoolye: Combatting financial crime in Mauritius
Speech by Mr Yandraduth Googoolye, First Deputy Governor of the Bank of Mauritius, at the
Training Workshop for Senior Management of Law Enforcement Agencies in collaboration with
the Commonwealth Secretariat, Ebene, 6 December 2017.
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Ladies and Gentlemen,
Good Morning. I am delighted to be here today to address such a distinguished and expert
audience. I will try to be short as it is said that it is better that you leave your audience before your
audience leaves you.
The country should be one and unified. We are all servants of the state. Having different factions
within the state inhibit progress. Building fictitious walls arise sometimes out of ego. Pulling in
different directions does not help. It is with concerted action and co-ordination that progress can
be achieved. Co-operation within the different organs of the state is therefore imperative. We
need to put our heads together for our common benefit.
A piece of information standing alone is like being part of a puzzle. It is when different
organisations fighting for a common goal put whatever information they have together that a
bigger picture can emerge and better preventive action can be taken.
The Bank of Mauritius has been in the forefront of the war against financial crime for around 15
years now. It issued its first Guidance Notes on AML/CFT setting out the minimum standards to
be applied by all financial institutions under its purview, on 19 December 2003, thus setting the
stage for a credible banking sector. A strong legal and regulatory framework is the basis of any
effective regime. The Guidance Notes is a dynamic document which over the years, has been
updated to reflect the latest global developments, as well as to incorporate emerging best
practices recommended by international standard setters, namely the FATF and the Bank for
international settlements.
The Guidance Notes have been revamped in 2017 to include, amongst others, the following, -
(i) Proliferation Financing regarding the transfer and export of nuclear, chemical or
biological weapons.
(ii) Duty of financial institutions to identify and assess ML/TF risks on an
enterprisewide level.
(iii) Information to be collected by financial institutions for natural, legal person and
legal arrangements with a view to developing an initial customer risk profile.
(iv) Enhanced due diligence to be performed by financial institutions in respect of
wire transfer transactions to ensure that wire transfer systems are not used by
criminals as a means to break the audit trail.
In the fight against AML/CFT, there is a standing committee since 2004, between the Bank and
Compliance Officers of banks, which meets quite often where issues of utmost importance,
amendments to the Guidance Notes and decisions are taken in consensus and in a spirit of
dialogue with the banking sector. In addition, there is a Banking Committee which is chaired by
the Governor of the Bank and comprise Senior Management of the Bank and CEO's of banks
which meets on a quarterly basis where important AML/CFT matters are discussed as and when
necessary. We also have a trilateral meeting with the FSC and the FIU where AML/CFT issues
are discussed. In June 2015, the Bank of Mauritius held a tripartite meeting with the FIU and
MLRO's of banks. This meeting provided an opportunity for the Bank, FIU and MLRO's to share
their views on how to make the existing system of reporting of transactions works better.
We have set up for some years now a Joint Coordination Committee between the Bank and the
FSC. Under that Joint Coordination Committee, there is a working Group on AML/CFT to
interalia promote standardisation and harmonisation of our Guidance Notes on AML/CFT and
encourage information and knowledge sharing on AML/CFT issues.
We already have memoranda of understanding for co-operation and the sharing of information
with the Independent Commission against Corruption, Statistics Mauritius, the Mauritius Revenue
Authority, the Financial Intelligence Unit, the Competition Commission of Mauritius and the
Financial Services Commission. These are all testimony that the Bank of Mauritius understood
very early the need of cooperation in the fight against financial crime. While we had those
memoranda of understanding on a bilateral basis, the agenda now is to have a memorandum of
understanding on a multilateral basis, for a better and concerted approach against financial
crime. We also have signed MoUs with 16 foreign counterparts which set forth a statement of
intent between the Bank of Mauritius and its counterparts to establish a framework for mutual
assistance, cooperation and the exchange of information.
The Bank of Mauritius remains committed in enhancing its network of co-operation with other
counterpart institutions which have regulatory and law enforcement functions in different parts of
the Mauritian economy.
Technology, as you know , is moving at a pace far greater than ever before. For the financial
industry to maximise the overall benefit of this progress, we must acknowledge both the
advantages and the risks of such rapid technological advancement while keeping abreast with
the latest innovations. New devices, software, applications and inventions will continue to
emerge. The challenge for us is to keep pace and ensure that industry players understand the
potential benefits as well as the risk they bear. As the financial industry evolves into digital, it is
inevitable that the industry becomes vulnerable to various new threats and risk factors, especially
in the domain of financial crimes and terrorism financing. It is inevitable therefore that we pool
together to be able to meet the challenges posed by those new technological advancements.
The Bank of Mauritius will continue to strengthen the AML/CFT regime to maintain relevance and
effectiveness for the Banking Sector. The requirement now emphasises on measures that
commensurate with risks, an effective risk based approach (RBA) to AML/CFT. The application
of RBA should have meaningful application. Misinformed RBA could lead to unjust financial
exclusion and unnecessary financial costs to institutions. Beyond implementing robust risk
management frameworks and systems the industry's resilience should be strengthened by
developing stronger risk cultures and mind-sets. Having a sound risk culture will help institutions
to be vigilant to financial crimes, take a questioning approach to unusual client requests or
transactions, and involve the entire organisation.
Institutions' board and senior management must play a pivotal role in keeping the organisation on
the right and ethical path. They must set a strong tone from the top that profits do not come at
the expense of unethical behaviour or misconduct. This must also be translated into real actions
throughout organisations, and not just remain as talk from the top. Strengthening risk culture,
governance and controls will go a long way towards fortifying our defences, but there is more we
can do. We can work together and work smarter.
Finally, I would be remiss if I did not mention that it is up to all of us to prevent financial crimes.
Institutional partnerships or new analytical tools would count for little without the trained,
dedicated professionals to make effective use of them and exercise sound judgements. In this
respect, this workshop is timely and commendable.
Conclusion
Let me conclude by saying that by working together, we can collectively be more effective at
combating financial crimes. Upholding high standards of integrity in the financial industry is an
absolute priority. Our reputation as a clean and trusted financial centre depends on our ability to
protect it from abuse, and we depend on each other to make it a success.
Thank you.