The Financial Crime Commission Act 2023 (Act), passed by the National Assembly in late December 2023, is expected to come into operation in the upcoming weeks, on a date to be fixed by Proclamation. The Act represents one of the most ambitious law reforms in recent years and is an attempt to improve the image of Mauritius as a jurisdiction that is committed to toughening up on financial crimes and the financing of drug dealing.
Establishment of the Financial Crime Commission
The Act introduces changes meant to address some of the problems posed throughout the years. Firstly, it tackles a supposed lack of accountability, case management oversight, and cooperation among the various agencies or bodies previously tasked with the dissemination of information, prosecution, and investigation of different financial crimes. Secondly, it aims at addressing the low rate of convictions secured by the Independent Commission Against Corruption (ICAC), the soon-to-be-defunct agency, once tasked with investigating and prosecuting bribery, money-laundering, and proceeds of crimes offences.
The main purpose of the Act is thus the establishment of the Financial Crime Commission (Commission) as the Mauritian ‘apex‘ agency, conferred with the mission of detecting, investigating, and prosecuting financial crimes and the financing of drug dealing. The Commission will consist of a director-general and four commissioners, with a statutorily imposed limited tenure in office. It will also consist of various divisions, notably an Investigation Division, an Asset Recovery and Management Division, an Educative and Preventive Division, and a Legal Division, which will discharge clearly demarcated functions and powers.
The Repeal of the POCA, ARA and part of the FIAMLA
The Act repeals the Prevention against Corruption Act (POCA) 2002, the Assets Recovery Act (ARA) 2011 and part of the Financial Intelligence and Anti-Money Laundering Act (FIAMLA), to ensure that all the functions and powers once conferred to such institutions as the ICAC, the Asset Recovery Investigation Division of the Financial Intelligence Unit or the Integrity Reporting Services Agency will be absorbed into the Commission.
It is also a consolidating act, grouping corruption, money laundering, fraud, financing drug dealing offences and other offences, previously dispersed throughout the repealed enactments mentioned above, under the concept of ‘financial crime’. These offences now carry harsher penalties with a new possible liability to a fine not exceeding MUR 20 million on conviction for any financial crime.
Introduction of new Financial Crime Offences
New offences, liabilities and obligations are also introduced through the Act. Notably, the Act creates a list of fraud offences that aims to target more sophisticated schemes that could escape the ambit of dishonesty offences found under the Criminal Code Act 1838. Thus, for example, fraud by abuse of a position by anyone expected to safeguard another person’s financial interest for personal gain or to cause another person’s loss, is now a distinct criminal offence.
Noteworthily, the legislator also decided to specifically criminalise under the umbrella of ‘Financial Crime’ the financing of drug dealing offences (i.e., the direct or indirect financing or collection of funds for the purposes of drug dealing activities). ‘Drug Dealing Activities’ is given the widest range of meaning to target any possible link on the chain of drug supply.
The liability of legal persons
Another striking addition is the new-found liability of legal persons whereby a legal person, which includes private entities such as companies, can now be found guilty of an offence under the Act. Thus, the legal person would be guilty of an offence under the Act if any of its directors, senior managers or any other persons involved in its management, or any of its officers, agents or representatives having authority to act on its behalf, commits an offence under the Act for the benefit of the legal person.
From a combined reading of the text, it appears that the Commission would no longer be required (as the prosecuting body when a private entity is accused of a financial crime) to identify a senior manager or director who, when they committed the act constituting the offence, were in actual control of the company’s operations and who could be considered as ‘the controlling mind and will of the company’.
Legal persons also now have the obligation to put into place adequate procedures to prevent themselves or any other person acting on the legal person’s behalf to commit a financial crime offence under the Act. Failure to do so is also an offence under the Act, carrying a possible fine of MUR 20 million.
Similarly, the breach of any guideline issued by the Commission is also an offence with the risk of a penalty of MUR 10 000 per month until the breach is finally remedied (provided that the total penalty is capped at MUR 1 million).
Corruption in private entities
The Act sends another strong message to the private sector by making it now clear that corruption within private entities is an offence in Mauritius. It now explicitly targets acts of bribery by or of any employee or member of a private entity.
With the repeal of the ARA 2011, the Act now also provides the new framework for the recovery and confiscation of proceeds, instrumentality of offences or terrorist properties. It provides for both a criminal-based and a civil-based asset recovery regime with the possibility to apply for attachment or confiscation orders. While the criminal-based regime requires a charge, a conviction, or an ongoing criminal enquiry, a civil attachment order can be sought even against a person who is not in Mauritius and was acquitted of an offence, if the proceedings are stayed or if the charge against them was withdrawn before the return of a verdict.
Conclusion
The willingness of the Legislator to put in place a new legal framework with the creation of a Commission is welcomed. It remains to be seen, however, whether the concentration of powers under the roof of the Commission will enable an effective fight against financial crimes. In any event, it will be up to the Supreme Court to interpret the new provisions of the Act, and to the Law Practitioners to study its contours.
