UK: FCA proposes new premium listing category for sovereign-controlled companies

In February this year the FCA launched a discussion paper (DP 17/2) ‘Review of the Effectiveness of Primary Markets’.  The paper discussed the role of listed primary markets as an important component of the broader capital markets landscape, and the structure of the UK listing regime in supporting that role.

The work on the review continues. However, the FCA is bringing forward a specific proposal for a targeted set of changes to the premium listing regime ahead of other possible proposals arising from the review.  

The proposal will address companies controlled by a shareholder that is a sovereign country.  The proposal aims to enable companies which may the subject of major privatisation transactions to choose the higher standards of premium listing, rather than standard listing.  Andrew Bailey, FCA Chief Executive, said:

“Regulatory protections for investors lie at the core of the listing regime. However, it is important that these protections remain well-targeted. Refining the listing regime in this way would make UK markets more accessible whilst ensuring that the protections afforded by our premium listing regime are focused and proportionate.

“Sovereign owners are different from private sector individuals or companies – both in their motivations and in their nature.  Investors have long recognised this and capital markets are well adapted to assess the treatment of other investors by sovereign countries.”

The rationale for having a distinct category for these companies is to create a new listing option for companies of a distinct type which may wish to access UK markets and choose the higher standard represented by our premium listing regime rather than standard listing. Over the past decade the FCA has given careful consideration to the appropriate treatment within the premium listing regime of companies with controlling shareholders.  However, this consideration largely addressed instances where the companies were controlled by private sector entities. 

The new premium listing category would include the full suite of investor protection applicable to companies in the existing premium listing category with two modifications the FCA considers appropriate for companies of this type:

• the related party rules would operate on a modified basis: the sovereign controlling shareholder would not be considered a related party for the purposes of the UK listing rules;
• the controlling shareholder rules  will not apply to companies in the new category in respect of the sovereign controlling shareholder.

These highly targeted modifications to the regime recognise that sovereign countries are different from private sector entities.

In addition, the new listing category will be open to companies who want the listing of their interests in their equity to be in the form of Depositary Receipts (DRs).

The review the FCA began with the DP17/2 discussion will continue, and in due course we will be summarising, in one or more documents, the feedback we have received from stakeholders together with more detailed proposals for reforms, should we consider those desirable.

Chris Garrod: Will We Need Lawyers By 2050?

My 6 year old son may never have to learn to drive a car. We may at that stage in his life all be driven around in driver-less cars. All thanks to current advancements being made in automation and in artificial intelligence.

That fact alone boggles my mind.

Bernews

Mauritius Times: A Depressed State of Affairs

There surely are enough mature persons outside the fold of customary political parties capable of infusing new life into the polity. The question that we must ask is why they have not been willing to jump into the political fray so far. The answer is probably disgust with the way politics has been conducted for a number of years now. The country cannot also wait too long to get out of the backwaters into which it has fallen. Although one could argue that the media has been painting and will continue to paint a picture of poor prospects for the country, highlighting as many bad things as possible with every passing day, the doings of the present government haven’t helped either.

Mauritius Times

Mrinal Roy: Plummeting standards

In a fiercely competitive market place, pervasive plummeting standards can surely not be the way forward. Falling standards have ordained and scripted a lacklustre economic performance for too long. Last week’s Statistics Mauritius report depicts a grim picture of a faltering economy. As a nation, this is not a record we can be proud of. We owe it to the people and the country to take back ownership of decisions to urgently set things right.

Mauritius Times

OECD: Mauritius signs the multilateral BEPS Convention to tackle tax avoidance by multinational enterprises

Today at the OECD Headquarters in Paris, Mahess Rawoteea of the Ministry of Finance and Economic Development of Mauritius, signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the MLI) in the presence of Douglas Frantz, OECD Deputy Secretary-General.

Based on expressed reservations at this point in time, 23 tax treaties would be impacted by this signing. We note that Mauritius issued a statement today, reaffirming its commitment to implement the minimum standards developed in the course of the OECD/G20 BEPS Project into its entire tax treaty network by the end of 2018. Mauritius has committed to modify its remaining tax treaties through bilateral negotiations.

The  MLI is a legal instrument designed to prevent base erosion and profit shifting (BEPS) by multinational enterprises. BEPS refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations. The MLI allows jurisdictions to transpose results from the OECD/G20 BEPS Project, including minimum standards to implement in tax treaties to prevent treaty abuse and “treaty shopping”, into their existing networks of bilateral tax treaties in a quick and efficient manner. It was developed through inclusive negotiations involving more than 100 countries and jurisdictions, under a mandate delivered by G20 Finance Ministers and Central Bank Governors at their February 2015 meeting.

The OECD is the depositary of the MLI and is supporting governments in the process of signature, ratification and implementation. The 69 jurisdictions participating in the MLI and the position of each Party and Signatory under the Convention are available on the OECD website.

Mauritius signs the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting today

Recovering Africa's Stolen Assets: Lessons from the Windward Trading Case

A report by the World Bank’s Stolen Asset Recovery programme found that, while nearly $1.4 billion in suspected corrupt assets were frozen in OECD countries between 2010 and 2012, less than $150 million was returned. Recovering stolen assets is of particular importance for sub-Saharan African countries, given the extent of the looting of public funds carried out by corrupt leaders and officials.

Prosecuting international corruption and recovering stolen assets has proved difficult and time-consuming. Both states from which assets have been stolen, and those where these assets are laundered or stored, have struggled to produce results.

The recently confirmed confiscation and subsequently agreed upon return of stolen assets from Jersey to Kenya - in the context of the investigation of Windward Trading Limited - is  therefore a significant achievement. It may also serve as an example of the kind of innovative legal approach other states, practitioners and the international community can explore to achieve meaningful progress in the recovery of stolen assets.

This event, co-hosted by Chatham House and the Basel Institute on Governance, will invite speakers from Kenya and Jersey to examine how lessons from the Windward case might be applied in other sub-Saharan African countries and in international corruption cases.

Netherlands grows as preferred holding jurisdiction for hosting Indian investments

In recent years both Mauritius and Singapore, and to a limited extent also Cyprus, were the leading jurisdictions for hosting investments into India, but the Netherlands is becoming a good alternative option.

International Tax Review

Mrinal Roy: No Place for Political Dinosaurs

Why do disavowed politicians still cling on to power by every means instead of taking the cue from the people’s vote that it is time for them to go?

Mauritius Times

Vistra: The New Mauritius-India DTA – Still the Best Route to India

Despite recent changes Mauritius remains the most competitive jurisdiction for investment into India. The realignment has certainly allowed India to retain more by the way of taxes but the Mauritius route is far from being obsolete.

McKinsey: The closest look yet at Chinese economic engagement in Africa

In two decades, China has become Africa’s most important economic partner. Across trade, investment, infrastructure financing, and aid, no other country has such depth and breadth of engagement in Africa. Chinese “dragons”—firms of all sizes and sectors—are bringing capital investment, management know-how, and entrepreneurial energy to every corner of the continent. In doing so they are helping to accelerate the progress of Africa’s economies. Yet to date it has been challenging to understand the true extent of the Africa–China economic relationship due to a paucity of data. The new McKinsey report, Dance of the lions and dragons: How are Africa and China engaging, and how will the partnership evolve?, provides a comprehensive, fact-based picture of the Africa–China economic relationship based on a new large-scale data set. This includes on-site interviews with more than 100 senior African business and government leaders, as well as the owners or managers of more than 1,000 Chinese firms spread across eight African countries.

Business Magazine: Global business under pressure

The global business sector is feeling the heat. The impending changes on the fiscal front worldwide call for a remodelling of its structure. The renegotiation of the tax treaty with India that came into force on April 1, 2017 has been a wake-up call for operators. The Mauritian jurisdiction had, for the major part, positioned itself as an India-centric model for the past 25 years or so.

Other global pushes are also inching Mauritius towards a more globally acceptable model. After the implementation of the Foreign Account Tax Compliance Act (FATCA) introduced by the US to combat tax evasion by improving exchange of information, Mauritius has now committed to sign by June 30, 2017 the Multilateral Instrument (MLI) to implement the tax treaty measures in the OECD/G20 BEPS Action Plan. These measures have stemmed from the need for International Financial Centres (IFCs) to demonstrate more transparency, generating volatility in markets. Jurisdictions around the world, including Mauritius, are under pressure to comply while continuing to function but also battle against the negative perception about tax evasion, round-tripping and money laundering associated to them.

FSC Mauritius issues Circular Letter on Professional Collective Investment Schemes

Fake online stores reveal gamblers' shadow banking system

A network of dummy online stores offering household goods has been used as a front for internet gambling payments, a Reuters examination has found.

The seven sites, operated out of Europe, purport to sell items including fabric, DVD cases, maps, gift wrap, mechanical tape, pin badges and flags. In fact, they are fake outlets, part of a multinational system to disguise payments for the $40 billion global online gambling industry, which is illegal in many countries and some U.S. states.

The findings raise questions about how e-commerce is policed worldwide. They also underline a strategy which fraud specialists say regulators, card issuers and banks have yet to tackle head-on.

Reuters

Mauritius: Minister Sesungkur Chairs Meeting On OECD Multilateral Convention On Tax Treaty

The Minister of Financial Services, Good Governance and Institutional Reforms, Mr Dharmendar Sesungkur, chaired yesterday at Sicom Tower in Ebène, a meeting on the signature of the OECD Multilateral Convention on Tax Treaty relating to BEPS (Base Erosion and Profit Shifting) Measures. 

Several private sector global business operators participated in the discussions. The aim was to exchange information, chart the way forward and see how to better protect the interests of not only the local financial services sector but that of Mauritius also.

In a statement following the meeting, Minister Sesungkur recalled  that the global business and the financial services sector represent a big chunk of Mauritius’ economic activity and contribute significantly by employing, directly or indirectly, around 20 000 professionals. The financial services sector contributes much in wealth creation and ensures the economic progress of Mauritius in terms of harnessing on investments, he said.

According to the Minister, there are a number of rules and regulations that are soon to enter into force on the international level and that includes the Multilateral Instrument being implemented by the OECD which will be impacting on our financial services sector as well as the EU’s BEPS. Hence, the importance of exchanging information with stakeholders of the financial services sector to address these challenges in the coming months so as to ensure the development of the sector, he pointed out.

Government, said the Minister, proposes to analyse the suggestions put forward by the private sector global business operators and see how Mauritius’ proposal to the OECD can be enhanced to better safeguard  the country’s interest and that of the financial services sector.

Multilateral Convention

On 7 June 2017, over 70 Ministers and other high-level representatives participated in the signature ceremony of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting. Signatories include jurisdictions from all continents and all levels of development.

Mauritius has expressed the intent to sign the Convention and other jurisdictions are also actively working towards signature.

The innovative multilateral convention provides for the swift implementation of a series of tax treaty measures to update the existing network of bilateral tax treaties and reduce opportunities for tax avoidance by multinational enterprises. It also offers the tools to implement mandatory binding arbitration, tackle hybrid mismatches, and stop artificial avoidance of “permanent establishment” status in countries. The convention is in line with the strategy to help restore citizens’ trust in the fairness and transparency of global governance systems and the legitimacy of the processes underpinning global integration.

Appeal court confirms 'tiger charity' assets are excluded from Bray divorce settlement

The England and Wales Court of Appeal has rejected Li Quan's claim to include the assets of the Chinese Tigers South African Trust in her financial remedy case against former husband Stuart Bray. The decision is a relief to charities and families with trusts, protecting their funds against unprecedented types of legal attack.

STEP UK News (19 June 2017): Appeal court confirms tiger charity assets are excluded from Bray divorce settlement

BAILII

STEP UK News (30 October 2014): Wife fails to get tiger charity included in divorce settlement

Island states targeted in great power competition

Small island nations lacking in exploitable natural resources and industrial capacity often develop into financial hubs, tax havens or other offshore capital services to supplement national income derived mainly from tourism to their palm-dotted beaches and lagoons.

Asia Times

Mauritius: Horse Racing and the Black Economy

The black economy must have discovered numerous ropes with which to manipulate the system to get into undeserved wealth. Ordinary citizens may not see them. They may however gauge who the actors perpetrating unlawful activities would really be. Why do businessmen pay huge amounts to politicians? Is this the end of the matter? Or do they help keep the system perverted so they cannot be impugned when engaging in all sorts of criminal activities? This is not a moral issue. It is about a quick-get-rich society inviting all to indulge in crimes of all sorts to get rich quickly.

Mauritius Times

Global business : s’affirmer comme une juridiction de substance

Les nouvelles réglementations et le contexte international forcent les places financières à se réinventer. La juridiction mauricienne n’est pas épargnée par la vague.

Business Magazine

Mauritius tweaks rules for global business licensees

Foreign portfolio investors (FPIs), offshore funds and other entities that invest in India via the Mauritius route will now have to satisfy any two of the secondary (or additional) substance conditions instead of just one to prove they have adequate commercial substance in Mauritius and are not just shell companies or post-box entities

Fundamental Reform in Business Facilitation and Expansion of Economic Horizons in Mauritius

The Business Facilitation (Miscellaneous Provisions Act), 2017, enacted on 16 May 2017, aims to give new impetus to investment by creating a more favourable environment to doing business in Mauritius. It seeks to do away with regulatory and administrative constraints (whether at the outset or on an ongoing basis), and promotes a modern and digital business environment by bringing significant amendments and innovations to 26 pieces of legislation. Below is an overview of those legal changes that we deem notable.

Mondaq

Mauritius Times: A Disaster in Waiting

The Betamax case involving a breach of contract by the government appears to have now been determined. The Singapore International Arbitration Centre (SIAC), which was in charge of deciding the case between Betamax, a local company, and the State Trading Corporation (STC), a state enterprise involved in importing several commodities including petroleum products, gave its decision on 6th June in favour of Betamax. Accordingly, the STC would have to pay damages amounting to between $115-125 million (Rs 4.1-4.5 billion) to Betamax for unjustified breach of contract.

The ruling of the SIAC, protected by confidentiality provisions, will not be available for public consultation, and it is not known whether it has gone beyond the issue of breach of contract to examine the terms and conditions thereof. It may be recalled that one of the first dossiers the government issuing from the general election of December 2014 took up after assuming power was the contract given out to Betamax by the STC under the preceding government in 2009. It tried at first to negotiate Betamax out of the country’s petroleum transportation contract in January 2015, on the ground that the contract had been awarded unlawfully thanks to a colourable device consisting of amending public procurement laws and singling it out for privileged contract allocation.

Mauritius Times

Multilateral Instrument - the new super treaty

Just as the One Ring was the most powerful artefact ever created in the Middle-earth, the Multilateral Instrument (MLI) will undoubtedly be one of the most powerful tax treaties ever signed. Already labelled as the "turning point in tax treaty history", the MLI is sure to have a profound impact on the existing tax treaty relationships.

Mauritius commits to sign the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting by 30 June 2017

Mauritius, as a fully collaborative and responsible International Financial Centre (IFC) of substance, has always supported the implementation of best practices as set by leading globally recognised institutions.

To this end, in June 2015, Mauritius signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, jointly developed by the Council of Europe and the Organization for Economic Cooperation and Development (OECD). Mauritius is equally a member of the Early Adopters Group committed to the early implementation of the Common Reporting Standard (CRS) on the automatic exchange of financial account information.

The country is the first in Africa to have signed up to the Intergovernmental Agreement with the United States for the implementation of the Foreign Accounts Tax Compliance Act (FATCA).

To further support its pledge as a cooperative IFC, Mauritius has actively participated in the Ad-Hoc Group set up by the OECD to work on the drafting of the Multilateral Instrument as recommended under Action 15 of the Base Erosion and Profit Shifting (BEPS) Report. More recently, the country equally joined the Inclusive Framework to implement the BEPS Recommendations and the new initiative on exchange of Beneficial Ownership information.

In the same vein, Mauritius wishes to reiterate its firm intention to sign the “Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting”. Mauritius commits to sign the Multilateral Convention by the 30th of June 2017, thus demonstrating its dedication to curb base erosion and fight international tax avoidance.

For those Double Taxation Avoidance Agreements that will not be covered by the Multilateral Convention, discussions will be held on a bilateral basis with the concerned countries to ensure our compliance with the BEPS recommendations while safeguarding the legitimate interest of Mauritius.

As a trusted IFC of substance, Mauritius remains committed to always adopt and adhere to internationally accepted norms and standards.

GMEX Group places Mauritius IFC at heart of global expansion plan

GMEX Group, a global provider of multi-asset exchange trading, post trade business solutions and technology today announced the opening of its regional headquarters in the Mauritius International Financial Centre (IFC). Additionally, its newly launched initiative with partners, FinComEco, the integrated Financial & Commodities Ecosystem, providing technology, services, financing, capacity building and enablement solutions across multiple regions in Sub-Saharan Africa and beyond with a focus on the agricultural sector, will also establish its global headquarters in Mauritius.

Both companies, GMEX Holdings Ltd and FinComEco, have obtained regulatory approval from the Financial Services Commission (FSC) to operate as global business companies. The plan over the coming months, subject to satisfying requisite criteria and additional regulatory approvals, is to extend this to be a global headquarters administration license to benefit from significant advantages the country offers as a globally trusted IFC of substance.

GMEX Holdings Limited will provide business and technical services under the GMEX Services banner with global support for GMEX Group entities and the growing list of international partners, stake-holders and technology vendors in the GMEX ecosystem. GMEX Group will also manage its expanding portfolio of market infrastructure and FinTech investments from Mauritius under the GMEX Investments banner.

This move is supported by the Financial Services Promotion Agency (FSPA), which operates under the aegis of the Ministry of Finance and Economic Development and is mandated to develop and promote Mauritius as an International Financial Centre (IFC) of excellence.

Hirander Misra, CEO of GMEX Group & Deputy Chairman of FinComEco commented, “The rapid development of Mauritius as an International Financial Centre and FinTech hub coupled with a skilled multilingual labour pool is making it very attractive for global business and technology focused companies, like us, to establish a major presence. The FSPA, as a government agency, has been instrumental in supporting our establishment in the Mauritius IFC.”

Harvesh Seegoolam, Chief Executive of the FSPA, “As a sophisticated and trusted IFC, Mauritius is open to global companies looking at establishing their operations locally to target emerging markets. At the level of the FSPA, our focus is on promoting and attracting activities which are substance based, meet and adhere to international standards and lead to high value job creation for our professionals. In this regard, we are pleased to welcome the GMEX and FinComEco projects in the Mauritius IFC.”

Rt. Honourable Mark Simmonds, former U.K. Minister of The Foreign & Commonwealth office for Africa and Chairman of FinComEco commented, “Mauritius has developed into an excellent international financial centre in which to base a multi jurisdictional African investment platform such as FinComEco.” Adding, “Along with our partners, we look forward to facilitating the full agricultural value chain improving lives, creating jobs and alleviating poverty.”

Mauritius has a strong regulatory framework and is recognized as having implemented the highest internationally agreed standards. The country is one of the first jurisdictions to be included in the Organisation for Economic Cooperation and Development (OECD) White List. A strategically important location for GMEX Group and FinComEco, Mauritius is conveniently located and connected for the various ventures currently being undertaken not only across the African continent but also in the Middle East, Europe and Asia.

In addition to its ecosystem and proven track record in global investments, the Mauritius IFC has a number of bilateral treaties for double taxation and investment protection in place across Africa and the Rest of the World; and is currently growing to include firms delivering a range of bespoke financial products for Africa. Mauritius is a member of a number of regional and global organisations including Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA), the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC), and the African Union (AU). As a reputable IFC, the country also adheres to best norms as set by organisations like IOSCO, IAIS, Financial Action Task Force (FATF) and the IFSB.

Anil Gujadhur - The BAI Affair: Mauritians need to know how and what went wrong

“Regulators are not alone to ensure safe and sound management of finance companies in the ‘public interest’ however. There’s also the finance company’s board, its specialised board committees such as the Corporate Governance Committee, Credit/Investment Committee, the Audit Committee, the Risk Management Committee, Internal Audit as well as External Audit. All are accountable and expected to apply the brakes when necessary. Then, the question arises as to why, despite a plethora of such controls, a finance group like the BAI has ended up with such a huge financing gap…”

“The BAI mess and consequent turmoil will not be put to rest any time soon. It’s the taxpayer who will have to pay the price for it to the tune of several billions of rupees. The taxpayer has the right to know how it all came about, whether there had indeed been failures at the level of the regulatory bodies, company boards and auditors – internal and external – and also political interference to sap the functioning of the public bodies, which might have allowed mischief to happen for a long number of years…”

Mauritius Times

SGG Group announces successful completion of the Cim Global Business acquisition

SGG Group is pleased to announce that it has successfully completed today the acquisition of Cim Global Business, a leading Mauritian-based corporate, trust and fund administrator with offices in South Africa and Singapore.

As previously announced, through this strategic acquisition, SGG Group will establish a strong presence in the attractive African and South-East Asian markets which have experienced significant growth.

Together with Cim Global Business, SGG Group forms a leading investor services platform with over 800 staff and state of the art technology.

375 of the Group employees are dedicated to servicing funds.  SGG Group’s fund manager clients benefit from the scale of the business and resulting efficiencies and investment in the highest quality staff and top tier funds software platforms.

To ensure the seamless integration of Cim Global Business, the company will be rebranded as part of SGG, allowing the combined group to pursue its business development strategy by expanding its range of services and geographies. The rebranding process will be completed within a period of 6 months.

Graham Sheward, Managing Director of Cim Global Business, said "We are pleased to be joining forces with such a renowned international group. We look forward to bringing our expertise and platforms together with the SGG Group and to combining our existing range of services, outstanding teams and geographical footprint. In partnership with SGG, Cim Global Business will be able to expand its servicing capabilities, allowing us to better serve our growing base of clients and further develop our focus on fund administration and servicing corporates and investors in the exciting African and Asian markets.”

Serge Krancenblum, SGG’s Group CEO continued, "We are very excited to find in Cim Global Business a team of professionals that are highly praised by their clients and the market for their level of expertise across a broad range of services. We add to our group impressive platforms in Mauritius, Singapore and South Africa that will further strengthen our servicing capacities and reinforce the focus on fund administration. Cim Global Business management team share our growth ambitions and are equally passionate about supporting the needs of our clients."

SS&C Advent: Preparing for MiFID II - A Guide for Investment Managers

The updated Markets in Financial Instruments Directive (MiFID II) and accompanying regulation (MiFIR) create a huge and complex rulebook that will transform the way financial markets operate and how trading activity is conducted in the European Union. While designed more for the sell side than buy side, its scope means any investment manager that has dealings with European clients, funds or even assets will be impacted to some extent, and will need to adopt a MiFID II program.

A White Paper and video are now available from SS&C Advent on Preparing for MiFID II.

Outrigger Mauritius Beach Resort reveals its Crystal Marquee for MICE and wedding sectors

Outrigger Mauritius Beach Resort has unveiled Crystal, a unique meeting space in the south of the island. This new concept opens opportunities for the resort in the events and MICE sector, from meetings and conferences to exceptional gala dinners and weddings.

Crystal is a fully air-conditioned transparent marquee. It measures 33 x 17.5 meters, can seat up to 250 people in banquet style and sits on a rooftop area of the hotel giving a wonderful view of the Bel Ombre coast.

The resort setting is ideal for events: 181 sea-facing rooms offer a breathtaking beachfront location alongside the turquoise lagoons of the Indian Ocean. Nestled in the nature reserve of Bel Ombre, the property is only 45 minutes from the airport,

A permanent structure, Crystal can be adapted for many needs. It can be used as a classic conference venue with pitch-dark option, or semi-transparent with ocean views, both incorporating the latest audio-visual technology.

“Crystal is unique in Mauritius and repositions the Outrigger as a full-on MICE destination for events, incentive meetings, weddings and banquets,” says Cyrille Carmona, deputy general manager of the resort. “With Crystal, the sky is the now the limit.”

The Outrigger, highly acclaimed for its dining, now has five food and beverage venues which can deliver MICE events for up to 250 covers.

Carmona says the key MICE points for the Outrigger are its five food and beverage outlets, including Crystal; all the resort’s rooms and suites are sea facing with a private terrace and balcony; there are spacious beachfront, garden and poolside venues for events; customized menus for beach parties and weddings, all the way up to wine and gala dinners; advanced audio-visual services; technical and secretarial services for businesses; lighting and ambience support; live entertainment, and complimentary Wi-Fi.

The Outrigger Mauritius Beach Resort has a dedicated MICE team that tailors proposals and accompanies groups during their events. This team has created a range of original MICE services including team-building activities, nature retreats, personalized wellness experiences, themed gala dinners and private outdoor events.

“With the opening of Crystal at the Outrigger Mauritius Beach Resort, I believe we now have a total package — a very compelling proposition for MICE event organizers worldwide,” says Carmona.

FSC Mauritius issues Communiqué - Online Submission Platform

The Financial Services Commission, Mauritius (“FSC Mauritius”) launched its Online Submissions Platform (OSP) on 01 December 2016. The OSP is the interactive platform allowing Management Companies to submit their applications for a licence online, and to upload the relevant supporting documents.

The number of applications received by FSC Mauritius through the OSP as at date aggregates to 353 Global Business Companies.

The aim of the OSP is to provide a more conducive regulatory environment to establish and conduct operations.

The FSC Mauritius informs its stakeholders that as from 01 August 2017, all applications for Global Business Licences should be made through the OSP platform.

Accordingly, no applications for Global Business Licences submitted in hard copies would be entertained by the FSC Mauritius thereafter.

Financial Services Commission, Mauritius

30 May 2017

European Commission welcomes adoption of new rules to block tax avoidance

The agreed rules will stop companies from escaping tax by exploiting the mismatches between Member States' and non-EU countries' tax systems ("hybrid mismatches"). Today's agreement completes the Anti Tax Avoidance Directive (ATAD) which ensures that binding and robust anti-abuse measures are applied throughout the Single Market.

"Our campaign for fairer taxation in Europe continues to reap results. Today's agreement is further proof of what the EU can achieve when we work together against common challenges. It is another victory for fair taxation and another blow against those companies that try to escape paying their fair share," said Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs.

Today's agreement will ensure that companies cannot avoid taxation by abusing mismatches between countries' tax treatment of certain income or entities, even if the mismatches involve third countries. The new rules, which were endorsed by EU ministers in February and subsequently by the European Parliament, will come into force on 1 January 2020, with a longer phasing-in period of 2022 for one provision (Art. 9a).

They build on the solid anti-avoidance safeguards initiated by the Juncker Commission and agreed at EU level. In addition to the ambitious Anti Tax Avoidance Directive, agreed in 2016, a host of new tax transparency rules have been adopted to ensure fairer and more open taxation throughout Europe.

Since January 2017, Member States have been obliged to automatically exchange information on financial accounts, as an important step against offshore tax evasion. From July this year, similar transparency rules will apply for tax rulings, while multinationals will have to provide country-by-country reports to tax authorities by the end of the year. The Council and the European Parliament are currently negotiating other important proposals to prevent tax abuse, including public country-by-country reporting, stronger Anti-Money Laundering provisions and tighter good governance rules for EU funds. A number of other substantial corporate tax reforms have also been proposed, notably the re-launch of the Common Consolidated Corporate Tax Base (CCCTB) in October 2016. Member States are also working on a common EU list of non-cooperative jurisdictions, to tackle third countries that refuse to adhere to tax good governance standards. The list should be ready by the end of the year.

In the coming weeks, the Commission will bring forward another new transparency initiative, with a proposal for intermediaries to report cross-border tax planning schemes.

May 2017 directive on hybrid mismatches with third countries

OECD releases peer review document for assessment of the BEPS Action 6 minimum standard

Today the OECD released the key document, approved by the Inclusive Framework on BEPS, which will form the basis of the peer review of the Action 6 minimum standard on preventing the granting of treaty benefits in inappropriate circumstances.

The Action 6 minimum standard is one of the four BEPS minimum standards. Each of the four BEPS minimum standards is subject to peer review in order to ensure timely and accurate implementation and thus safeguard the level playing field. All members of the Inclusive Framework on BEPS commit to implementing the minimum standards and participating in the peer reviews.

The document released today forms the basis on which the peer review process will be undertaken. The document includes the Terms of Reference which sets out the criteria for assessing the implementation of the Action 6 minimum standard, and the Methodology which sets out the procedural mechanism by which the review will be conducted.

Mrinal Roy: Crisis management, BAI Saga and India - Calling a Spade a Spade

It is obvious that India will never turn down a call for a helping hand from Mauritius. While finding a solution to end the hardships and anguish of the victims of BAI remains a priority, this unprecedented initiative of seeking help from India to resolve domestic problems of our own making raises a series of questions of principles… India cannot be the panacea for our blunders. By doing so the government is exposing its inability to manage the affairs of the country competently…

The recent flagrant lapses in respect of licences granted to Alvaro Sobrinho shows that the regulatory bodies have not yet learnt the lessons of the BAI debacle. Politicians must also learn to stay clear of political meddling in the strict application of rules and regulations by regulatory bodies. Going forward, urgent steps must also be taken to inculcate a culture of supervisory rigour among regulators and strict compliance with rules and regulations among operators to prevent any risk of crisis in our financial services sector. It is only then that we will prevent hiccups in the future and truly establish the standing and repute of Mauritius as a clean and vibrant financial services centre.

Mauritius Times

Africa subsidises the rest of the world by over $40 billion in one year, according to new research

Much more wealth is leaving the world’s most impoverished continent than is entering it, according to new research into total financial flows into and out of Africa.  The study finds that African countries receive $161.6 billion in resources such as loans, remittances and aid each year, but lose $203 billion through factors including tax avoidance, debt payments and resource extraction, creating an annual net financial deficit of over $40 billion.

The research shows that according to the most recent figures available in 2015:

• African countries received around $19 billion in aid but over three times that much ($68 billion) was taken out in capital flight, mainly by multinational companies deliberately misreporting the value of their imports or exports to reduce tax.
• African governments received $32.8 billion in loans but paid $18 billion in debt interest and principal payments, with the overall level of debt rising rapidly.
• An estimated $29 billion a year was stolen from Africa in illegal logging, fishing and the trade in wildlife and plants.
• Tim Jones, economist from the Jubilee Debt Campaign, said: "The African continent is rich, but the rest of the world profits from its wealth through unjust debt payments, multinational company profits and hiding proceeds from tax avoidance and corruption." 

Aisha Dodwell, a campaigner with Global Justice Now said: “There’s such a powerful narrative in Western societies that Africa is poor and that it needs our help. This research shows that what African countries really need is for the rest of the world to stop systematically looting them.  While the form of colonial plunder may have changed over time, its basic nature remains unchanged.”

Martin Drewry, director of Health Poverty Action said:  “To end poverty we need to focus our efforts on preventing the policies and practices that are causing it.  That means we need to stop our tax havens facilitating the theft of billions, clamp down on illegal activities and compensate African countries for the impact of climate change that they did not cause. “

Bernard Adaba, policy analyst with ISODEC in Ghana said: “'Development' is a lost cause in Africa while we are haemorrhaging billions every year to extractive industries, western tax havens and illegal logging and fishing. Some serious structural changes need to be made to promote economic policies that enable African countries to best serve the needs of their people rather than simply being cash cows for Western corporations and governments. The bleeding of Africa must stop!"

The report Honest Accounts 2017: How the world profits from Africa’s wealth, published by a coalition of UK and African organisations, including Global Justice Now, Health Poverty Action and Jubilee Debt Campaign, makes a series of recommendations as to how the system extracting wealth from Africa could be dismantled. These recommendations include promoting economic policies that lead to equitable development, preventing companies with subsidiaries based in tax havens from operating in African countries, and transforming aid into a process that genuinely benefits Africa.

Shu-Yi Oei: The Offshore Tax Enforcement Dragnet

Taxpayers who hide assets abroad to evade taxes present a serious enforcement challenge for the United States. In response, the U.S. has developed a family of initiatives that punish and rehabilitate non-compliant taxpayers, raise revenues, and require widespread reporting of offshore financial information by financial institutions and taxpayers. Yet, while these initiatives help catch willful tax cheats, they have also adversely affected immigrants, Americans living abroad, and “accidental Americans.” 

This Article critiques the United States’ offshore tax enforcement initiatives, such as FATCA and the offshore voluntary disclosure programs. It argues that the U.S. has prioritized two problematic policy commitments in designing enforcement at the expense of competing considerations: First, the U.S. has attempted to equalize enforcement against taxpayers with solely domestic holdings and those with harder-to-detect offshore holdings by imposing harsher reporting requirements and penalties on the latter. But in doing so, it has failed to appropriately distinguish among differently situated taxpayers with offshore holdings. Second, the U.S. has focused on revenue and enforcement, ignoring the significant compliance costs and social harms that its initiatives create. 

The confluence of these two policy commitments risks creating high costs for the wrong taxpayers. While offshore tax enforcement may have been designed to catch high-net-worth tax cheats, it may instead impose disproportionate burdens on those immigrants and expatriates who have less ability to complain, comply, or “substitute out” of the law’s grasp. This Article argues that the U.S. should redesign its enforcement approach to minimize these risks and suggests reforms to this end.

SSRN

CERT-MU White Paper: The WannaCry Ransomware

The world has experienced a massive global ransomware cyber-attack known as “WannaCrypt” or “WannaCry” (Ransom: Win32/WannaCrypt) since Friday, May 12 2017. Hundreds of thousands computers worldwide have been hit and affected more than 150 countries. WannaCry is far more dangerous than other common ransomware types because of its ability to spread itself across an organisation’s network by exploiting a critical vulnerability in Windows computers, which was patched by Microsoft in March 2017 (MS17-010). The exploit, known as “Eternal Blue,” was released online in April in the latest of a series of leaks by a group known as the Shadow Brokers, who claimed that it had stolen the data from the Equation cyber espionage group.

CERT-MU Security Alert: The Global Wanna Cry Ransomware Attack - Technical Advisory ​ ​

CERT-MU Technical Advisory on the Wanna Cry Global Ransomware Attack

THE MASSIVE WANNA CRY GLOBAL RANSOMWARE ATTACK

Original Issue Date: 14th May 2017

Updated: 15th May 2017

Severity Rating: High

Technical Advisory

Loss of Direction

The extremely damaging “entrée en scène” of the new government the last two years did not augur much good. A lot of it was about getting the upper hand in politics than improving the image of the country as a good venue for doing business. Despite the first budget of the government and announcement the following year of a series of long term redress measures called ‘Vision 2030’, nothing much happened to add substance.

With unbridled zeal, the government went around pulling down brutally the BAI group early in its mandate, introducing highly controversial legislation likely to erode Constitutional liberties and undermining public institutions. Interference in Air Mauritius, which eventually led to the unceremonious sacking of its Chief Executive, rocked public confidence even further.

Mauritius Times

Gareth Vaughan: It's time to end the madness

Gareth Vaughan argues it's time to ban offshore trust and company service providers from NZ activities, licence local ones, and hold them to account if their clients break the law in a move away from the Wild West

interest.co.nz

European Commission launches reflection on harnessing globalisation

Based on a fair assessment of the benefits and downsides of globalisation, today's Paper aims to launch a debate on how the EU and its Member States can shape globalisation in a way that anticipates the future and improves the lives of Europeans.

Frans Timmermans, First Vice-President of the Commission, said: "Globalisation is good for the European economy overall, but this means little to our citizens if the benefits are not shared fairly and more evenly. Europe must help rewrite the global rulebook so that free trade becomes fair trade. So that globalisation becomes sustainable and works for all Europeans. At the same time, we must focus our policies on getting people the education and skills they need to keep up with the evolution of our economies. Better redistribution will help guarantee the social cohesion and solidarity this Union is based on."

Jyrki Katainen, Vice-President for Jobs, Growth, Investment and Competitiveness, said: "Globalisation is a formidable force bringing benefits to Europe and the rest of the world but also many challenges. To preserve the benefits of openness but also address its drawbacks, Europe must promote a stronger rules-based global order, act resolutely against unfair practices, make our societies more resilient and our economies more competitive in the face of a fast changing environment."

The reflection paper takes an honest look at what globalisation has brought to the EU. The fact is that, even if the EU has greatly benefitted from globalisation, it has also brought many challenges. Around the world, globalisation has helped lift hundreds of millions of people out of poverty and enabled poorer countries to catch up. For the EU, global trade has boosted EU economic growth, with every €1 billion of additional exports supporting 14,000 jobs. Cheaper imports also benefit poorer households in particular. But these benefits are not automatic nor are they evenly distributed among our citizens. Europe is also impacted by the fact that other countries do not all share the same standards in areas such as employment, environmental or safety standards, meaning that European companies are less able to compete on price alone with their foreign counterparts; this can lead to factory closures, job losses or downward pressure on workers' pay and conditions.

However, the solution lies neither in protectionism nor in laissez-faire politics. The evidence presented in the Reflection Paper shows clearly that globalisation can be beneficial where it is properly harnessed.  The EU must ensure a better distribution of the benefits of globalisation by working together with Member States and regions as well as with international partners and other stakeholders. We should seize together the opportunity to shape globalisation in line with our own values and interests.

Today's Reflection Paper opens up a vital debate on how the EU can best harness globalisation and respond to its opportunities and challenges:

• On the external front, the paper focuses on the need to shape a truly sustainable global order, based on shared rules and a common agenda. The EU has always stood for a strong and effective 'multilateral' global rulebook and should continue to develop it in a way that addresses new challenges and ensures effective enforcement. For example, the EU could push for new rules to create a level-playing field by addressing harmful and unfair behaviour like tax evasion, government subsidies or social dumping. Effective trade defence instruments and a multilateral investment court could also help the EU act decisively against countries or companies that engage in unfair practices.
• On the domestic front, the paper suggests tools to protect and empower citizens through robust social policies and providing the necessary education and training support throughout their lives. Progressive tax policies, investing in innovation and strong welfare policies could all help redistribute wealth more fairly. Meanwhile, use of EU structural funds to assist vulnerable regions and the EU Globalisation Adjustment Fund to help displaced workers find another job can help mitigate negative impacts.

Tax Havens and International Human Rights

While tax havens and low tax areas are themselves not necessarily bound by relevant international human rights norms, through their very existence and the use of structuring and fiscal opportunities in such jurisdictions by actors who are bound by international human rights norm, they impact the international human rights continuum.

Tax Havens and International Human Rights analyses the use of fiscal and taxation initiatives, considering the various mechanisms through which human rights law abuses may be perpetrated or facilitated using tax havens. Structures in the Isle of Man, the Grand Duchy of Luxembourg, the Principality of Liechtenstein, the Cayman Islands, the Republic of Panama, Mauritius, Singapore and the State of Delaware are examined as being representative of low tax areas. The book explores the human rights abuses inherent in the use of such offshore entities such as companies with nominee shareholders and nominee directors, trusts, and foundations. Paul Beckett effectively demonstrates the distortive effect to which the use of such initiatives and structures can give rise, not merely where human rights are abused, but also where human rights are cited in justification of activities undertaken.

Anil Gujadhur: The Makings of a Good Financial Centre

Mauritius may not be able to compete with a highly sophisticated long-established place like London. But we made a start sometime in the late 1980s and early 1990s. We attracted some new types of business, on the promise we’ll not deviate from established principles. As in the case of other successful international financial centres, the objective was to go on adding to the existing mass of our financial activities, based on a solid reputation for harbouring sound business and fostering attractive living conditions for expatriates having the skills to expand the scope of our global business.

Mauritius Times

AML / CFT: When Compliance Is Not Enough

This article outlines a case in Australia involving an employee of a reporting entity who was charged with money laundering even though he followed the AML/CFT program of the company in identifying customers. The article questions just how far a reporting entity should go to identify the beneficial owner and the problem that appears to exist where a risk based assessment for AML does not protect an employee from being charged with criminal money laundering.

Malkara Consulting

EY: 2017 Africa Attractiveness Program – Connectivity redefined

Africa’s growth will improve off 2016 – the worst year for the continent in nearly 20 years.

• Africa’s growth will improve following 2016.
• Selected key economies will continue excelling.

Low growth was largely driven by external factors, particularly oil prices, which meant two of the largest three economies in Sub-Saharan African (SSA) i.e. Nigeria and Angola had to accept lower receipts for their exports.

As a result, both economies fell into recession, with Nigeria hit particularly hard, as the nation dealt not only with reduced terms of trade, but with lower production levels as a result of domestic insurgency.

South Africa’s growth in 2016 was only marginally positive (0.3%), while Angola’s growth for the year is likely to be flat. All three of these economies are expected to grow more strongly in the year ahead, although each one is dependent on a combination of global commodity price recovery, and structural economic reform.

At the other end of the spectrum, Cote d’Ivoire remains one of the fastest growing countries globally, although once again, highly dependent on commodity (cocoa) prices, and its ability to manage internal conflict. Staying in West Africa, Ghana’s prospects are also looking increasingly promising, with a newly elected administration promising to manage the public purse more prudently.

East Africa remains the most buoyant of all, with the four key economies (Kenya, Ethiopia, Tanzania, and Uganda) all poised for growth of 6%+ for the rest of the decade.

For most of the sub-continent, inflation has peaked and is declining, allowing the space for central banks to ease interest rates. This in itself will add stimulus to economic growth, and should interest rates at the very least remain stable, consumer disposable income will support even stronger growth through 2017.

However, there are a number of risks that need to be managed. Countries with high and rising twin fiscal and trade deficits remain at risk of currency devaluation. This becomes all the more evident where national debt levels are either rising too rapidly or are already at high levels.

Mozambique is the most notable example, although this has not impacted its growth outlook.

Commodity prices are also key to growth assumptions. Oil prices have fallen back to US$50 after trading at US$55 in the first two months of 2017. Price moves will depend on OPEC’s ability to get member countries to stick to agree to production levels. China remains critical to commodity prices more broadly, as its recent slowdown has already illustrated. Given these unknowns, policy certainty and economic reform are critical to stimulating growth and reducing the impact of exogenous influences.

By 2030 Africa remains on track to be a US$3t economy. To achieve that will require accelerating diversification initiatives and thereby boosting resilience to external shocks.

Download: Connectivity redefined

The Republic of Mauritius’s Regulatory Sandbox Could Attract Blockchain Startups

As part of their 2016–2017 budget, the Republic of Mauritius, which is an island nation off the southeastern coast of Africa, included regulatory sandbox legislation that can be used by blockchain technology companies to develop and commercialize their applications in the country with access to the African and Indian markets.

In an effort to learn more about the opportunities for blockchain startups in Mauritius, Bitcoin Magazine reached out to James Duchenne, who is the co-founder of Volt Markets and an honorary representative of the Republic of Mauritius’s Board of Investment, the national investment promotion agency.

Bitcoin Magazine

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