Communique by the Ministry of Finance and Economic Development of the Republic of Mauritius
The White Paper on Black Money tabled in the Lok Sabha on Monday 21 May 2012.
It is with satisfaction that Mauritius notes the acknowledgement by the Indian authorities of the robustness of our information sharing system with India and more particularly, as underscored in the White Paper, the fact that officers from the International Tax Overseas Unit stationed in Mauritius has been very helpful to the Indian authorities. In Mauritius we stand ready to consider other forms of collaboration with a view to addressing India’s concerns on the operation of the Mauritius-India Double Taxation Avoidance Convention (DTAC).
The White Paper does however contain certain misrepresentations. We are deeply concerned by a statement contained in the Paper to the effect that investments into India are apparently routed through Mauritius for avoidance of taxes and/or for concealing the identities from the revenue authorities of the ultimate investors, many of whom could actually be Indian residents, who have invested in their own companies, through a process known as round tripping. No case involving Mauritius has been mentioned in the White Paper. This is a clear example of erroneous perception. This is the more so regrettable in view of the significant and consistent efforts Mauritius has continuously made to address India’s concerns on the Mauritius-India tax treaty and our unflinching support and collaboration for an efficient exchange of accounting, banking and identity information with India.
The DTAC alone contains no specific provisions dealing with round tripping. In spite of that, Mauritius has voluntarily introduced licensing conditions to require companies investing in India to certify that no Indian source funds are being reinvested into India. This certification has to be confirmed by a recognized auditor which can be an Indian auditor as authorized by our legislation. It is for this very purpose that we have consistently indicated that Mauritius stands ready to act once the Indian authorities advise us of any breach which is known to them. Mauritius has not received any official report of a round tripping offence from the Indian authorities.
Since the inception of its Financial Services sector, Mauritius has taken all appropriate steps to safeguard the credibility of its jurisdiction. Mauritius has a stringent legal and regulatory framework recognized by the IMF, Financial Stability Board (FSB) and the OECD to combat money laundering. Furthermore, Mauritius appears on the OECD White List of Jurisdictions that have substantially implemented the internationally agreed tax standards. Recent peer review of Mauritius by the OECD Global Forum, further upholds that Mauritius has all the essential elements in place for an effective exchange of accounting, banking and ownership/identity information with other countries.
Mauritius is also compliant with norms prescribed by IOSCO, IAIS, FATF and the Basel Committee and has enacted necessary legislation. In this regard, the Mutual Assistance in Criminal and Related Matters Act and the Financial Intelligence and Anti-Money Laundering Act 2002 which provides a framework for exchange of information on money laundering with members of international financial intelligence groups are cases in point. The Asset Recovery Act which we have recently promulgated and which enlarges the scope for freezing ill gotten assets is a further example of legislative consolidation at our end to deter stashing of black-money.
Mauritius is committed to working closely with the Indian Government. Mauritius has always shown its willingness to address concerns expressed by India. We are convinced that through our on-going dialogue with India, within the framework of the Joint Working Group, the mutual interest of our two friendly countries would be safeguarded.
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