Mauritius -- Travel Rule Implementation Regulatory Overview

Mauritius has significantly advanced its implementation of the FATF Travel Rule, primarily through the Virtual Asset and Initial Token Offering Services Act 2021 (VAITOS Act) and subsequent guidance from the Financial Services Commission (FSC).

Here's a breakdown of the status:

1. Whether Adopted

Yes, adopted. Mauritius has adopted the FATF Travel Rule requirements into its domestic legal framework. The VAITOS Act 2021 specifically mandates Virtual Asset Service Providers (VASPs) to collect and transmit originator and beneficiary information for virtual asset transfers.

2. Effective Date

The Virtual Asset and Initial Token Offering Services Act 2021 was assented to on 22 December 2021 and came into force on 7 February 2022 via Proclamation No. 2 of 2022.

• VAITOS Act 2021: https://www.fscmauritius.org/media/105495/vaitos-act.pdf
• Proclamation No. 2 of 2022: https://www.fscmauritius.org/media/105496/proclamation-no-2-of-2022.pdf

3. Threshold Amounts

The threshold for the Travel Rule requirements aligns with the FATF Recommendation 16:

• For virtual asset transfers where the value exceeds EUR/USD 1,000 (or its equivalent in any other currency or virtual asset).
• This applies to both:
  • Transactions between virtual assets and fiat currencies.
  • Transfers between one or more forms of virtual assets.

This threshold is specified in guidance issued by the Financial Services Commission (FSC), such as the AML/CFT Handbook for Virtual Asset Service Providers and Issuers of Initial Token Offerings (February 2022).

• FSC AML/CFT Handbook for VASPs: https://www.fscmauritius.org/media/105786/aml-cft-handbook-guidelines-for-vasps.pdf (Refer to Section 6.2 "The Travel Rule").

4. Which VASPs Are Covered

The VAITOS Act 2021 regulates all entities providing "virtual asset services" and "issuing initial token offerings" in Mauritius. This broadly covers:

• Virtual Asset Service Providers (VASPs), which include entities engaged in:
  • Exchange between virtual assets and fiat currencies.
  • Exchange between one or more forms of virtual assets.
  • Transfer of virtual assets.
  • Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets.
  • Participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset.
• Issuers of Initial Token Offerings (ITOs) when involved in related virtual asset services.

The FSC is the primary regulator for these entities.

5. Technical Implementation Requirements

Section 21 of the VAITOS Act 2021 and the FSC's AML/CFT Handbook for VASPs outline the technical and information requirements:

Information to be collected and transmitted:

• For the Originator:
  • Originator’s name.
  • Originator’s account number used to process the transaction (e.g., wallet address or unique transaction identifier).
  • Originator’s physical address.
  • Unique transaction identifier.
• For the Beneficiary:
  • Beneficiary’s name.
  • Beneficiary’s virtual asset account number used to process the transaction (e.g., wallet address or unique transaction identifier).

Requirements for VASPs:

• Sending VASP (Originator VASP): Must obtain, hold, and transmit the required originator and beneficiary information to the Beneficiary VASP immediately and securely.
• Receiving VASP (Beneficiary VASP): Must obtain and hold the required originator information from the Originator VASP. It must also verify the identity of the beneficiary when conducting a transaction above the threshold.
• Unhosted Wallets/P2P Transfers: When a VASP's customer receives virtual assets from or sends virtual assets to a wallet not associated with a VASP (e.g., a self-hosted wallet), the VASP must still collect the required originator or beneficiary information from its own customer. Enhanced due diligence may be required.
• Interoperability: VASPs are expected to adopt technological solutions that facilitate the secure and immediate transmission of the required information between VASPs, promoting interoperability.
• Record Keeping: All collected information must be maintained for a period of at least seven years, as per the Financial Intelligence and Anti-Money Laundering Act 2002 (FIAMLA).

6. Penalties for Non-Compliance

Non-compliance with the VAITOS Act 2021 and the AML/CFT framework carries significant penalties, including fines and imprisonment.

• VAITOS Act 2021 - Section 47 (General Penalties):
  • Any person who contravenes any provision of the Act or any regulations made under it, for which no specific penalty is provided, commits an offence.
  • Fine: Not exceeding MUR 2 million (approx. USD 45,000 - current exchange rates).
  • Imprisonment: Not exceeding 5 years.
• VAITOS Act 2021 - Section 48 (Offences by Body Corporate):
  • Where an offence under the Act is committed by a body corporate, every director or officer involved in the management of the body corporate who assented to, or connived at, the commission of the offence shall be liable to be proceeded against and punished accordingly.
• Financial Intelligence and Anti-Money Laundering Act 2002 (FIAMLA):
  • Breaches of broader AML/CFT obligations, including failure to report suspicious transactions, failure to conduct proper due diligence, or failure to keep records, also carry substantial penalties under FIAMLA.
  • FIAMLA 2002 (as amended): https://www.fiu.mu/pdf/FIAMLA_consolidated.pdf (Refer to Parts VI and VII for offences and penalties related to AML/CFT).

These comprehensive measures demonstrate Mauritius's commitment to aligning with international FATF standards for virtual assets.