Mauritian Minister Defends Information-Gathering Power

by Lorys Charalambous, Tax-News.com, Cyprus

23 July 2002

After Mauritian international business interests protested about provisions in the Finance Bill currently before the Legislative Assembly which would give the Financial Services Commission powers to requisition and disclose confidential information, the government hastened to reassure offshore management companies that confidential information would be used strictly for supervisory purposes only.

“The exchange of information will be exclusively for supervisory purposes and definitely not for tax reasons” the Minister for Economic Development and Financial Services, Sushil Kushiram explained to local newspaper Le Mauricien. The Minister expressed his conviction that the new measures would help build up the image of Mauritius as a credible financial centre and demonstrate the commitment of the government to create the necessary environment facilitating the integration of offshore companies, which will enable them to make a positive contribution to the Mauritian economy. Mr Kushiram pointed out that between 1994 and 2000 almost no amendments were made to the legislation governing non-banking financial services, bar one minor amendment brought about by OECD pressure.

The clause which has caused the trouble is a proposed amendment to Section 33(7) of the Financial Services Development Act 2001, authorising the FSC in the discharge of its functions in respect of the non-bank financial services sector to require management companies to furnish information relating to their business or to any business administered/managed by them for a client. The FSC is specifically empowered to publish and disseminate such information excluding those relating to the “individual affairs of any particular client” of a management company.

A senior executive of the FSC however stresses that disclosure will be strictly confidential and any information obtained will under no circumstances be used for purposes other than the supervision of financial institutions. Furthermore, it is clarified that such information will only be exchanged with “any other institution which performs the function of a supervisory body...” and “with functions similar to those of the Commission under this Act”. The FSC insists that it is only a regulatory body having nothing to do with the tax system, and claims that similar measures already exist in other jurisdictions. Mauritius is the only offshore jurisdiction without such measures, claims the FSC.

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