MAURITIUS Law and Practice Contributed by: Bhavna Ramsurun, Pinki Mahata, Lorna Senivassen and Shreya Mungur, BLC Robert & Associates
Short Selling There are no rules that specifically address short selling. Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) Regimes FATCA The Republic of Mauritius and the government of the USA have signed an Agreement for the Exchange of Information Relating to Taxes (the “Agreement”) and the Inter-Governmental Agreement (“Model 1 IGA”) to improve interna - tional tax compliance and implement the FATCA. The Agreement provides for the exchange of tax information (upon request, spontaneously, and automatically) between Mauritius and the USA, whereas the IGA provides for: • the automatic reporting and exchange of information in relation to accounts held with Mauritian financial institutions by US persons; and • the reciprocal exchange of information regarding financial accounts held by Mauritius residents in the USA. Following the IGA, Mauritius financial institutions will not be subject to the 30% withholding tax on US-sourced income if they comply with the requirements of the FATCA. CRS Mauritius has signed the Convention on Mutu - al Administrative Assistance in Tax Matters (the “Convention”) developed by the OECD – under which, information can be exchanged on request, spontaneously or automatically. Thus, Mauritius will be able to exchange information automatically on a reciprocal basis with all juris - dictions that have signed the Convention. Mau - ritian financial institutions must report annually
• the Financial Services Commission Anti-Mon - ey Laundering and Countering the Financ - ing of Terrorism Handbook 2020 (issued by the FSC, which is the supervisory authority of funds for money laundering and related purposes). Funds must carry out customer due diligence (CDD) in accordance with the law, including veri - fying the identity of investors and being satisfied that the source of funds is lawful. For corpo - rate investors, the fund must obtain copies of incorporation documents to establish the exist - ence of the fund and the identity of its principals. The fund must also provide CDD information on the investor(s), directors and other principals, including beneficiaries, account signatories, and any person operating under a power of attorney. Reduced or enhanced CDD may be applied, depending on the profile of the investors, wheth - er they are regulated institutions, and their coun - try of domicile. Moreover, funds are required to appoint a money laundering reporting officer, a deputy money laundering reporting officer and a compliance officer who are conversant with the AML laws of Mauritius. Funds are also required to comply with the Unit - ed Nations (Financial Prohibitions, Arms Embar - go and Travel Ban) Sanctions Act 2019 (the “UN Sanctions Act”), which prohibits dealing with funds or other assets of – or making funds or other assets available to – a party listed on a United Nations Sanctions List or a “designated party” declared as such under the UN Sanc - tions Act. The UN Sanctions Act also establishes several reporting obligations and authorisation mechanisms, which reporting persons (including funds) must implement.
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