Financial Prohibitions against Listed Parties under the United Nations (Financial Prohibitions, Arms Embargo and Travel Ban) Sanctions Act 2019
The United Nations (Financial Prohibitions, Arms Embargo and Travel Ban) Sanctions Act 2019 (the ‘Act’) enables the Government of Mauritius to implement targeted sanctions, including financial sanctions, arms embargo and travel ban, and other measures imposed by the United Nations Security Council under Chapter VII of the Charter of the United Nations, with a view to addressing threats to international peace and security, including terrorism, the financing of terrorism and the proliferation of weapons of mass destruction.
Sanctions measures, under Article 41 of the United Nations Charter, encompass a broad range of enforcement options that do not involve the use of armed force. There are currently 14 ongoing sanctions regimes which focus on supporting political settlement of conflicts, nuclear non-proliferation, and counter-terrorism, in particular, by virtue of the following United Nations Security Council Resolutions and their respective successor resolutions, as set out in the Second Schedule of the Act:
The National Sanctions Secretariat, established under section 7 of the Act, has the responsibility under section 18(1)(a) of the Act to immediately give public notice, in such manner as the National Sanctions Committee may determine, of the United Nations Sanctions Lists and any changes thereto, including any delisting therefrom. The United Nations Sanctions List refers to the list established by or under the authority of the United Nations Security Council comprising the names of listed parties (‘Listed Parties’) which are subject to United Nations sanctions and include the list established pursuant to the United Nations Security Council Resolution listed in the Second Schedule and their successor resolutions.
The National Sanctions Secretariat has issued a Notice under section 18 of the Act together with an Explanatory Note on the implementation of United Nations Sanctions Measures which have been published in the Government Gazette of 5 October 2019.
The United Nations Security Council Consolidated List may be accessed at the following link: https://www.un.org/securitycouncil/content/un-sc-consolidated-list
Financial Institutions1 are required to regularly consult the Consolidated List and take immediate action with respect to any changes brought thereto. They must also regularly consult the newspapers for any notice which may be issued by the National Sanctions Secretariat and immediately act upon it.
Financial Institutions are reminded of the following obligations imposed under the Act:
(I) Financial prohibitions
(a) Prohibition to deal with the funds or other assets of Listed Parties under section 23 of the Act;
According to section 23 of the Act, no person shall deal with the funds or other assets of a listed party, including –
i. all funds or other assets that are owned or controlled by the listed party;
ii. those funds or other assets that are wholly or jointly owned or controlled, directly or indirectly, by the listed party;
iii. funds or other assets derived or generated from funds or other assets owned or controlled, directly or indirectly, by the listed party; and
iv. funds or other assets of a party acting on behalf of, or at the direction of, the listed party.
(b) Prohibition to make funds or other assets available to Listed Parties under section 24 of the Act.
According to section 24 of the Act, no person shall make any funds or other assets or financial or other related services available, directly or indirectly, or wholly or jointly, to or for the benefit of –
i. a listed party;
ii. a party acting on behalf, or at the direction, of a listed party; or
iii. an entity owned or controlled, directly or indirectly, by a listed party.
(II) Reporting obligations
(a) The Financial Institution must immediately (i.e. without delay and not later than 24 hours) verify whether the details of the Listed Party match with the particulars of any of its customer;
(b) If there is a positive match, the Financial Institution must identify whether the customer owns any funds or other assets with it, including the funds or assets mentioned in section 23(1) of the Act; and
(c) The Financial Institution is required to make a report to the National Sanctions Secretariat and the Financial Services Commission where funds or other assets have been identified by it.
In accordance with section 23(4) of the Act, any person who holds, controls or has in his custody or possession any funds or other assets of a listed party must, not later than 24 hours of any notice issued under section 18(1) of the Act, notify the National Sanctions Secretariat in writing of –
i. details of the funds or other assets against which action was taken in accordance with the prohibition to deal with the funds or other assets of a listed party;
ii. the name and address of the listed party;
iii. details of any attempted transaction involving the funds or other assets, including –
- the name and address of the sender;
- the name and address of the intended recipient;
- the purpose of the attempted transaction;
- the origin of the funds or other assets; and
- where the funds or other assets were intended to be sent.
(d) A nil report must be submitted to the above authorities if no funds or other assets are identified.
(III) Reporting of suspicious information
Financial Institutions must immediately submit to the FIU in accordance with section 14 of the Financial Intelligence and Anti-Money Laundering Act, any information relating to a Listed Party which is known to it.
(IV) Internal controls
Financial Institutions must implement internal controls and other procedures to enable it to effectively comply with the obligations under the Act.
The Financial Services Commission is required, under section 40(2) of the Act, to supervise and enforce compliance by its licensees with the requirements imposed under the Act. Failure to comply with the Act is an offence.
1As defined under section 2 of the Financial Intelligence and Anti-Money Laundering Act