Insights

Mauritian compliance officers do not feel empowered


BIZweek interview with Stephen Platt during the AML Masterclass in October

 

 

The recent financial scandals reflect poorly on Mauritius. The industry needs to redouble efforts to optimize risk management. However, says Stephen Platt, Chairman and Chief Executive Officer of KYC Global Technologies, Compliance Officers feel that they do not have sufficient level of authority or resource to do their job properly. BIZweek had a quick chat with Stephen Platt during the AML Masterclass hosted by Temple Professionals Ltd, on Wednesday, at Hennessy Park Hotel, Ebene

 

Herrsha Lutchman-Boodhun

 

>> Can you give us a brief about the AML (Anti-Money Laundering) Masterclass which took place today (Wednesday)? 

The Masterclass was organized for financial services businesses in Mauritius to examine money laundering risk and how they can protect themselves against that risk more effectively than they have done in the past. I have been drawing on my experience conducting large scale regulatory investigations in different parts of the world to provide some insight into the way they can manage money laundering risk, particularly by using new technologies such as RiskScreen.

 

>> You have come to Mauritius at a time when there are, as you said yourself, some financial scandals. How do you relate all these to the topic of the day, which is money laundering and compliance? 

I think your domestic scandals make the relevance of money laundering even more obvious because the risk is manifesting itself on your doorstep. It’s not a remote risk. Because those scandals reflect poorly on Mauritius. It’s even more important that the finance industry redoubles its efforts to optimize risk management. It has to make up the reputational ground that has been lost because of scandals.

 

>> But are our Compliance Officers well equipped and prepared to identify and deal with cases related to money laundering? 

There are Compliance Officers in Mauritius, who are doing their best in difficult circumstances. I know that some of them do not feel empowered. They do not feel that they have a sufficient level of authority or resource to do their job properly. They are simply there to tick boxes. That’s very troubling. Everybody in an organization should be aligned in their attitude to compliance. There are obviously principals of businesses in Mauritius who are not prepared to relinquish control – they want to control everything and are scared of what will happen to certain lucrative relationships if the Compliance Department isn’t controlled. In some cases, the principals even want to control the externalization of Suspicious Transaction Reports (STRs) to the Police. That’s a real problem because Compliance Officers and Money Laundering Reporting Officers are in the line of fire. It’s unfair to put them in an accountable position, but not give them the authority to do their jobs properly.

 

>> What about the role of the regulators?

Your regulators are well-intentioned. Mauritius has done a good job of having the right legislation in place. What it now has to do is demonstrate that it is prepared to enforce it. This requires political will and resourcing. A regulatory regime is only as effective as the enforcement action the authorities are prepared to take. Mauritius has some work to do in that regard. I think there’s a perception that the small players get nailed but not the bigger players or the well-connected wrongdoers. Criminal prosecutions for money laundering are notoriously difficult but regulatory action against businesses and those responsible for them is easier. This is why the international community is now placing much greater emphasis on. Whereas, historically, international evaluators have been interested in whether a jurisdiction has the right laws and regulations in place; they are now concerned with whether they can demonstrate effectiveness through enforcement actions. Mauritius needs to be very mindful of that. Scandals need to result in people being held to account otherwise it is demotivating and people become anaesthetized to scandal which in itself is very damaging.

 

>> In general, how would you say Mauritius is faring? 

 If Mauritius was a student, I would probably give it a grade C+. It’s definitely not among the worst performing jurisdictions, but it could do better. To put that in context, I wouldn’t give any jurisdiction a grade A. There are good intentions in Mauritius. People want to do the right things. They should be given more opportunities to do that, and it’s largely about resourcing and having the willingness to use the legislation.

 

>> How has money laundering evolved over the years? Is it much more complicated to identify or being detected now than earlier? 

It’s a really good question. The truth is that every new financial service or product that is developed results in new and interesting ways of money laundering. For example, the new frontier is crypto currencies. It’s the responsibility of regulators and license holders to keep up with evolving methodologies because criminals are very good at innovating. It’s a constant challenge. It requires resources, expertise and a real commitment by businesses to do the right thing even though it might mean doing less business.