Although the U.S.-African Growth and Opportunity Act (AGOA) may provide some relief and new opportunities, this is unlikely to fully compensate for the fast eroding privileges.
One onshore and two offshore banks began operations after June 2002.
The Hong Kong and Shanghai Banking Corporation Ltd. (HSBC), and Barclays Bank. Barclays Bank took over the Mauritian operations of the third international bank (BNPI) in 2002, merging it with its own local operations in November 2002.
Of these six banks, two are government-controlled domestic banks.
As of June 30, 2002, only two shareholders held more than 5 percent of its equity: Lloyds TSB Bank Pic of the United Kingdom (9.97 percent) and Fincorp Investment Ltd. (6.63 percent).
Over 3,000 firms (out of a total of 7,125) report a debt-to-assets ratio of over 0.66. The total debt of these firms amounts to MUR 57 billion, with about MUR 45 billion of this estimated to be bank loans.
The share of government securities in total assets of the banking system has increased to close to 20 percent at end-2002 from about 14 percent at end-2001.
In a press release, MCB estimated the loss at about 9 percent of its capital and 60 percent of its estimated FY2003 profits.
However, the value of most collateral, in particular land, is linked significantly to the fortunes of the industries whose borrowing they secure (in the case of land, notably the sugar industry). As a result, sectoral shocks risk affecting companies’ ability to service their debts and the value of the collateral related to those debts.
Two of the offshore banks came into operation in July 2002.
They maintain rather high thresholds below which they will not deal with customers.
There are currently 11 licensed captive insurance companies, four noncaptive Category 2 global (insurance) business companies, four brokers, two reinsurers, and seven captive managers.
The Global Business License 2 (GBL2) firms constitute the most significant source of potential AML/CFT risk to Mauritius. These companies have virtually no physical presence in Mauritius, and are inherently difficult to supervise and monitor closely. While most of these businesses may be legitimate, the license can easily be abused since many were created and licensed at the time when Mauritius did not have strong customer identification requirements in place. Stricter licensing requirements are now in place and monitored by the FSC.
Total public debt is much higher and includes MUR 8.5 billion in external debt and a GOM-guaranteed parastatal debt of MUR 19.8 billion.
A detailed assessment of Mauritian AML/CFT regime was conducted under the pilot program approved by the IMF/World Bank Board using the October 11, 2002 version of Methodology for Assessing Compliance with AML/CFT international standards that was endorsed by the Financial Action Task Force.
Part II of this paper includes summaries of the detailed assessments of the standards and codes conducted by the FSAP mission. They include the summary for Basle Core Principles for Effective Banking Supervision, the Payment System, Transparency of Monetary Policy, and Anti-Money Laundering and Combating the Financing of Terrorism.
Michael Andrews (MAE) and Kee Meng Lee (Monetary Authority of Singapore).
The “zero-hour rule” involves the possibility that a court may date the bankruptcy of an institution from midnight prior to the date of a bankruptcy order, thereby threatening the irrevocability of the payments made in the real-time gross settlement system.
The assessment was conducted by Alain Damais (WB, FSEFI), Nancy Rawlings (IMF, MAE), and Diana Wong (Security Bureau, Hong Kong), the independent anti-money laundering expert (IAE) on the team. Throughout this report, portions of the assessment attributable to the IAE is shown in italicized text. The roster of experts is based on the names of competent persons identified by the FATF, FSRBs, the United Nations, and the Egmont Group.
This requirement is set forth in FATF Special Recommendation VII. Jurisdictions are allowed a two year period to make the necessary adaptations to their systems and procedures.
The authorities have communicated their opinion that the Bank of Mauritius and Financial Services Commission currently have adequate legal authority to enforce these directives.