Question 1 (30 marks)  

1. “Money Laundering is considered to be an evil for the economy.” Discuss. [15 marks]
Question 3  
The anti-money laundering framework should be robust and all-encompassing. Discuss 
Question 1  
(a) “Money laundering has become the buzzword in Mauritius.” Discuss. [15 marks] 
Intro: s3 of FIAMLA 2002 
 a 3-staged process (placement, layering, integration) by which illegally obtained cash
is made to appear as if it has been obtained by legal means. The funds are moved into valid
accounts or businesses to disguise the financial trail that leads back to the criminal activity,
to wash it clean of its criminal stigma and to provide it with a veil of legitimacy 
 a mechanism used by criminals who attempt to conceal the true origin and ownership
of the proceeds of their criminal activities. If undertaken successfully, it allows them to
maintain control over those proceeds and ultimately provides them with a legitimate cover
for the source of their income 
 the launderer tries to conceal the origin/ true ownership, maintain control and change
the form of the proceeds to shrink the huge volumes of cash generated by initial criminal
act 
 predicate offence 
Para 1: s6(3) FIAMLA: the Court may reasonably infer the proceeds, having regards to
evidence that a property is in whole or part, directly or indirectly involved in the proceeds of
a crime. Example: In DPP v Bholah [2011] UKPC 44, Lord Kerr provides clarification on the
fact that there is no need to prove the predicate offence 
the case of Audit v The State [2016] SCJ 282. 
Encouraged by:  
 latest technological means available to the launderers provide them with a panoply of
activities that they can indulge in by just sitting in front of their computer screen. 
 professional assistance, whether deliberately, innocently or forcefully provided,
remains available to guide them through the steps 
 the process of globalisation also affected the world of finance and crime thereby
making it more difficult to understand, retrace and investigate the current context of
money laundering happening across border 
Para 2: Consequences: 
1. Destabilization of Financial Systems: Money laundering can destabilize the financial
systems of countries by injecting large sums of illicit funds into legitimate financial
markets. This can lead to inflation, currency devaluation, and even economic crises.  
2. Distortion of Markets: The infusion of illegal funds into legitimate markets can create
artificial demand and distort market prices. This can lead to unfair competition, market
inefficiencies, and harm to consumers. 
3.  Undermining of Financial Institutions: weakening of financial institutions which may
come to rely on the proceeds of crime for managing their assets, liabilities and operations,
plus additional costs of investigations, seizures, fines, lawsuits etc > The involvement of
financial institutions in money laundering activities can undermine the integrity of the
financial sector. This can lead to a loss of confidence in the banking system and a
reduction in the overall level of investment. 
4.  Negative Impact on Society: Money laundering is often associated with criminal
activities that cause harm to individuals and society. By facilitating such activities, money
laundering perpetuates crime and undermines the rule > increased social costs to deal with
additional criminality such as policing costs or hospital costs for treating drug addicts 
 5. reputational damage from being perceived as being a haven for money launderers and
terrorist financiers, leading to legitimate business moving their business elsewhere
>attracting criminals including terrorists and their financiers to move to or establish new
business relationships within the jurisdiction 
  
Conclusion: Combating money laundering is important to:  
 protect the integrity and stability of the international financial system, 
 cut off the resources available to terrorists, 
 make it more difficult for those engaged in crime to profit from their criminal
activities. 
 control the volatility of international capital flows and 
 minimise effect on foreign direct investment 
 
2. Analyse the role of the Financial Intelligence Unit (FIU) in the fight against Money
Laundering. [15 marks] 
(b) Describe the role of the Financial Intelligence Unit in combating money laundering in
Mauritius. [7 marks]  
(b) Explain the functions of the Financial Intelligence Unit (FIU) as the Anti-Money
Laundering and Combating the Financing of Terrorism (AML/CFT) regulator in our
domestic financial system. [15 marks] 
 
Section 9 of the FIAMLA 2002 provides for the establishment of the Financial Intelligence
Unit (FIU) which is the central authority for reporting money laundering in Mauritius. It is a
member of the Egmont Group.  The director is expected to act without fear or favour and is
not subject to the direction or control of any other person or authority other than, in matters of
discipline, the President acting on the advice of the Prime Minister. The FIU is the central
Mauritian agency for the request, receipt, analysis and dissemination of financial information
regarding suspected proceeds of crime and alleged money laundering offences as well as the
financing of any activities or transactions related to terrorism. 
Section 10 of the FIAMLA 2002 sets out the functions of the FIU. The functions of the Unit
are, inter alia, to receive, request, analyse and disseminate to the investigatory and
supervisory authorities, financial information 
concerning suspected proceeds of crime and alleged money laundering offences;
 required by or under any enactment
 in order to counter money laundering; or concerning the financing of any activities or
transactions related to terrorism. 
Furthermore, the FIU shall – 
 collect, process, analyse and interpret all information disclosed to it and obtained by it
under the relevant enactments;
 inform, advise and co-operate with the investigatory and supervisory authorities and
Registrars; 
 issue guidelines to members of a relevant profession or occupation falling under its
purview on measures to combat money laundering, financing of terrorism and
proliferation; 
 issue guidelines to banks, financial institutions, cash dealers, controllers or auditors of
credit unions, other than the Principal Co-operative Auditor, and members of a
relevant profession or occupation on the manner in which a suspicious transaction
report shall be made and additional information may be supplied to the FIU, on a
suspicious transaction 
  exchange information with overseas financial intelligence units and comparable
bodies;
 undertake, and assist in, research projects in order to identify the causes of money
laundering and terrorist financing and its consequences;
 perform functions as are conferred on it under the Asset Recovery Act namely to act
as the Enforcement Authority for asset recovery. 
Overall, the FIU plays a critical role in the fight against money laundering by gathering and
analyzing financial intelligence, promoting information sharing and international cooperation,
and supporting capacity building and policy development. Its work helps to disrupt the
activities of criminals involved in money laundering and other financial crimes and
contributes to the overall integrity and stability of the financial system. 
Question 4  
How is the fight against money laundering structured in Mauritius? [25 marks] 
Mauritius has since long believed in the combat against money laundering. Being a small
financial centre, it remains very vulnerable to the threat posed by financial crimes and
therefore needs to consolidate its legislative as well as institutional framework to fight against
those types of criminal activities. Several laws and institutions have been implemented to
pursue the fight against money laundering. 
As per section 7 of the FIAMLA, the Intermediate Court has jurisdiction to try money
laundering offences. 
Any person who is found guilty of committing money laundering or of disposing of property
subject to forfeiture shall, on conviction, be liable to a fine not exceeding 10 million rupees
and to penal servitude for a term not exceeding 20 years. 
Section 8 of the FIAMLA 2002, any property belonging to or in the possession or under the
control of any person who is convicted of money laundering offences shall be deemed, unless
the contrary is proved, to be derived from a crime and the court may, in addition to any
penalty imposed, order that the property be forfeited. 
One of the measures taken to limit the risk of money laundering has been to impose a limit
for cash transactions. In fact, the FATF has always recommended that in the combat against
economic crime and money laundering, cash transactions should be closely monitored and
controlled. FIAMLA 2002, cash transactions can happen only for an amount of Rs 500 000 or
less as per section 5. According to s37 any person who makes or accepts any payment in cash
in excess of 500,000 rupees or an equivalent amount in foreign currency, or such amount as
may be prescribed, shall commit an offence.” However, s2 states that “a transaction (a)
between the Bank of Mauritius and any other person; 
(b) between a bank and another bank; 
(c) between a bank and a financial institution; 
(d) between a bank or a financial institution and a customer where – 
(i) the transaction does not exceed an amount that is commensurate with the lawful activities
of the customer, and – 
(A) the customer is, at the time the transaction takes place, an established customer of the
bank or financial institution; and 
(B) the transaction consists of a deposit into, or withdrawal from, an account of a customer
with the bank or financial institution; or 
(ii) the chief executive officer or chief operating officer of the bank or financial institution, as
the case may be, personally approves the transaction in accordance with any guidelines,
instructions or rules issued by a supervisory authority in relation to exempt transactions; or 
(e) between such other persons as may be prescribed.” 
Example: Beezadhur v. ICAC (2014) UKPC 27 
*insert FIU part from above* 
Section 19A of the FIAMLA establishes a National Committee for Anti-Money Laundering
and Combating the Financing of Terrorism. The Ministry for Financial Services and Good
Governance shall coordinate and undertake measures to identify, assess and understand the
national money laundering and terrorism financing risks and review such risk assessments at
least every 3 years. The FIAMLA recognises two supervisory bodies namely the Bank of
Mauritius and the Financial Services Commission.