Mauritius: Personalized registration marks

Cabinet has agreed to the National Transport Authority (NTA) allocating personalized registration marks to owners of motor vehicles against payment of an appropriate fee.  The registration mark would comprise a combination of letters and figures.  The NTA would make regulations to safeguard against offensive messages.

OECD’s Gurría presents G20 Leaders with proposal to tackle tax evasion

OECD Secretary-General Gurría today presented to G20 Leaders ground-breaking proposals to tackle tax evasion and avoidance by both companies and individuals. The proposals establish automatic exchange of information for tax purposes as the new international standard for tax co-operation and set out the Action Plan on Base Erosion and Profit Shifting (BEPS), which was first presented to G20 Finance Ministers in Moscow in July 2013.

OECD’s Gurría presents G20 Leaders with proposal to tackle tax evasion

Mauritius 1st in Africa in the Global Competitiveness Report 2013-14

Mauritius ranks 1st in Africa and occupies the 45th place worldwide according to the world Global Competitiveness Report 2013-14 of the World Economic Forum (WEF) entitled : Strengthening Recovery by Raising Productivity, released on September 4.

The country is presently the highest ranked in the sub-Saharan region after having moved nine places from its previous ranking at the 54th position in the last Global Competitiveness Report 2011-12, despite the fact that this region continues to face the biggest competitiveness challenges of all regions.

The 2013-14 report which assesses 148 economies across the world, based on 12 pillars of competitiveness, justifies Mauritius’ success by attributing it to several factors which have been determining for the country to record a fairly good performance in all the indices.

Mauritius, says the report, has benefitted from relatively strong and transparent public institutions (39th) and clear property rights, strong judicial independence, and an efficient government (29th).

According to the report, private institutions in the country are rated as highly accountable (14th), with effective auditing and accounting standards and strong investor protection. The country’s infrastructure is also well developed by regional standards (50th), particularly its ports, air transport, and roads, states the report.

Moreover, notable improvements have taken place in the areas of market efficiency. Financial markets have deepened, lifting Mauritius’ rank up to 26th on the back of improved access to different modes of financing and financial services. This, says the report, is further reflected in company spending on research and development which seems to be increasing, thus enhancing Mauritius’ innovative capacity.

Furthermore, the country boasts an efficient goods market (25th) driven by greater foreign prevalence and more competition. The report underlines that labour market is relatively flexible (55th), although the country does not deploy its talent efficiently:

Mauritius is ranked 92nd in its capacity to retain talent but the report observes that the share of women in the labour force remains low at 118th. This is further reflected in the low availability of scientists and engineers (102nd), concludes the report.

The Global Competitiveness Report 2013-2014 of the WEF assesses the competitiveness landscape of 148 economies while providing insight into the drivers of their productivity and prosperity. The WEF defines competitiveness as the set of institutions policies and factors that determine the level of productivity of an economy.

World Economic Forum: Institutions and Innovation Increasingly Important for Competitiveness

Excellent innovation and strong institutional environments are increasingly influencing economies’ competitiveness, according to The Global Competitiveness Report 2013-2014, which is launched today.

The report’s Global Competitiveness Index (GCI) places Switzerland at the top of the ranking for the fifth year running. Singapore and Finland remain in second and third positions respectively. Germany moves up two places (4th) and the United States reverses a four-year downward trend, climbing two places to fifth. Hong Kong SAR (7th) and Japan (9th) also close the gap on the most competitive economies, while Sweden (6th), the Netherlands (8th) and the United Kingdom (10th) fall.  

The United States continues to be a world leader in bringing innovative products and services to market. Its rise in the ranking is down to a perceived improvement in the country’s financial market as well as greater confidence in its public institutions. However, serious concerns persist over its macroeconomic stability, which ranks 117 out of 148 economies.

In Europe, efforts to tackle public debt and avoid a break-up of the euro have taken the focus off addressing deeper competitiveness issues. Southern European economies such as Spain (35th), Italy (49th), Portugal (51st) and notably Greece (91st) all need to continue addressing weaknesses in the functioning and efficiency of their markets, boost innovation and improve access to finance in order to help bridge the region’s competitiveness divide.

Some of the world’s largest emerging market economies must also engage business, government and civil society to implement long-overdue reforms. Of the five BRICS, the People’s Republic of China (29th) continues to lead the group, followed by South Africa (53rd), Brazil (56th) India (60th) and Russia (64th). Among the BRICS, only Russia improves its ranking, climbing three places, while Brazil drops eight places.

Among the Asian economies, Indonesia jumps to 38th, making it the most improved of the G20 economies since 2006, while Korea (25th) falls by six places.  Behind Singapore, Hong Kong SAR, Japan and Taiwan (China) (12th) all remain in the top 20. Developing Asian nations display very mixed performances and trends: Malaysia places 24th while countries such as Nepal (117th), Pakistan (133rd) and Timor-Leste (138th) are near the bottom of the ranking. Bhutan (109th), Lao PDR (81st) and Myanmar (139th) join the index for the first time.  

In the Middle East and North Africa, Qatar (13th) tops the region’s rankings, with the United Arab Emirates (19th) entering the top 20 for the first time. Saudi Arabia (20th) falls two places but remains among the top 20. Israel ranks 27th. Egypt (118th) drops a further 11 places on last year’s index. Bahrain (43rd), Jordan (68th) and Morocco (77th) also decline. Elsewhere in the region, Algeria moves up to 100th place and Tunisia re-enters the index at 83rd.

In sub-Saharan Africa, Mauritius (45th) overtakes South Africa (53rd) as the region’s most competitive economy. With only eight countries in the region featuring in the top 100, profound efforts across the board are clearly needed to improve Africa’s competitiveness. Among low-income economies, Kenya makes the biggest improvement, rising by ten places to 96th position. Nigeria (120th) continues to be ranked low, highlighting the need for it to diversify its economy.

Despite robust economic growth in previous years, Latin America continues to suffer from low rates of productivity and the results show overall stagnation in competitiveness performance. Chile (34th) continues to lead the regional rankings ahead of Panama (40th), Costa Rica (54th) and Mexico (55th), which all remain relatively stable.

“Innovation becomes even more critical in terms of an economy’s ability to foster future prosperity,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum. “I predict that the traditional distinction between countries being ‘developed’ or ‘less developed’ will gradually disappear and we will instead refer to them much more in terms of being ‘innovation rich’ vs. ‘innovation poor’ countries. It is therefore vital that leaders from business, government and civil society work collaboratively to create education systems and enable environments which foster innovation.”

Xavier Sala-i-Martin, Professor of Economics, Columbia University, USA, said: “The report highlights a shift in the narrative of the global economy from one year ago, when fire-fighting still characterized much of global and regional economic policy. This has now given way to an increasing urgency for leaders to make wide-ranging structural reforms to their economies.”

Communiqué – Amendments to the Guide to Global Business

Section 74(3) of the Financial Services Act 2007 provides that the Commission may consider any such matters when determining whether a Category 1 Global Business Company (GBC 1) is ‘managed and controlled’ in Mauritius.

Further to government policy of encouraging substance in Mauritius by Global Business companies, as announced in the last budget, discussions were conducted with relevant stakeholders and amendments were brought to Section 3 of Chapter 4 of the Guide to Global Business.

The amendments in the Guide to Global Business require GBC 1s to have presence which can be reasonably expected from a corporation managed and controlled in Mauritius. In addition to existing requirements, other conditions which will be considered by the Commission include amongst others: having office premises, holding assets, employing staff and using the services of local providers.

Please refer to the revised Section 3 of Chapter 4 of the Guide to Global Business.

The GBC 1s have to comply with these new requirements by 1 January 2015.

IFC Review: A Moral Crusade with a Hollow Core

Martin Crawford discusses double taxation treaties (DTTs); created by governments to facilitate cross-border trade, and why going after the offshore financial centres that underpin this system may not work. 

Double taxation treaties (DTTs) were created by governments to facilitate cross-border trade. Usually negotiated bilaterally and with guidance from international organisations, their essential purpose is to ensure companies are not taxed on the same income in multiple locations, which could impede overseas expansion. Offshore financial centres serve as conduits for these capital flows, essential links in a chain that extends from the US, through Europe, into Asia, and back again.

IFC Review: In The Chair ….Philip Kermode

In late 2012 the EU Commission presented an action plan for tackling tax fraud and tax evasion,  in an interview with the IFC Economic Report, the Directorate General for Taxation & Customs, Philip Kermode, discusses the issues of tax planning, tax avoidance and tax evasion in the EU.

IFC Review: De-Centralised Due Diligence

L Burke Files discusses the idea of centralisation in relation to due diligence, which was central to a publication by the Basel Committee on Banking Supervision - October 2001 on Customer Due Diligence for Banks.

De-centralised due diligence makes all the sense in the world.  Those closest to the risks of operation are making informed choices. But it cannot just be done and walked away from.  The information must still be gathered and centralised, responsible management must be sought, trained and properly incentivised.  Oversight must be as keen as the selection and training, remembering all the time that these managers must be left free to choose, but also to be held accountable.

IFC Review: IFCs – Keeping the Wolf from the Door

Professor Philip Booth and Dr Richard Wellings discuss the importance of IFCs to economic development and why policymakers must resist calls to introduce measures that reduce competition in tax and regulation.

The importance of IFCs to the process of economic development, both as exemplars and facilitators, is a major reason why policymakers must resist calls to introduce measures that reduce competition in tax and regulation. As well as diverting attention from the real causes of poverty, a crackdown on IFCs would hinder the trade and entrepreneurship that drive higher living standards. Moreover, if rules are tightened, the multi-nationals, which are such a focus of anti-IFC campaigns, are likely to benefit at the expense of small, local businesses. Large firms can afford to employ expensive tax lawyers and accountants in order to navigate their way through complex new rules, whereas their smaller competitors would face disproportionate compliance costs. It would be a tragedy if well-meaning development campaigners helped bring about policies that actually increased poverty by hindering international trade and suffocating small businesses.

Campaigners present an alternative ‘Debt League’ for first time

Jubilee Debt Campaign have today released a ‘debt league’ which compares the foreign debts of all countries in the world in a new way. Based on separate calculations from World Bank, International Monetary Fund, central bank and OECD databases, it is the first time these figures have been presented together.

By showing both government debt and private debt, and how much a country owes as well as it is owed, JDC’s ‘net debt’ table better expresses the fact that crises are not simply created by debtors, but by creditors too. Countries such as Norway, Saudi Arabia and Germany are traditionally seen as ‘morally superior’ to indebted countries for their credit surpluses. But they are just as responsible for debt crises in a world increasingly characterised by huge imbalances.

JDC has published four measures of debt figures next to one another, which they claim together give a better picture of the true state of indebtedness. The organisation believes foreign owed debt is a more important factor causing crises than domestic debt, and private debt is far more important than traditionally believed.

Though the UK ranks 98th most indebted country in the world in the net debt league, its private sector debt is a massive 364 per cent of GDP, putting it fourth on that measure. JDC says this means the UK economy is in desperate need of reform – but not of the sort of austerity policies currently being imposed.

Jubilee Debt Campaign economist Tim Jones, who calculated the figures, said:

“Often when referring to a country’s debt, people only focus on how much debt is owed by a government. This includes debts which are owed to citizens of that country, often as part of their savings such as pensions; debt which doesn’t necessarily harm the country’s economy. But it ignores the debt owed by private companies, including banks, even though that was the main cause of the current financial crisis.”

“It is debts owed between countries which are at the root of current crises in Europe, as well as in countries such as Jamaica, Pakistan and El Salvador. But it takes two to tango; our figures also show the big creditor countries, including Germany, Saudi Arabia and Norway, whose surplus status is just as much a problem to the global economy. It’s the other side of the same coin.”

“Of course no one set of figures can capture all the complexities around debt. The quality of debt is a huge issue; whether debts are used productively and democratically, or are used to fund useless projects, and unrepresentative regimes. There can be no statistical way of measuring this. But these new figures give far more insight than the blinkered view which looks only at government debt, and takes no account of who it is owed to.”

“Countries in a foreign debt crisis need debts to be cancelled. But to prevent crises in the first place we need to regain control of the financial system. The UK debt crisis is a crisis of private debt, bank debt, and it hasn’t gone away. Austerity will do nothing to help this. Instead we need to regulate lending between states, including by private companies and banks. In the 1950s and 1960s, when such regulations existed, debts were far lower, growth was higher and there were hardly any debt crises.”[4]

a) Fifteen largest net debtors and lenders

Country Net debt as per cent of GDP

Seychelles 152

Portugal 116

Ireland 98

Greece 95

Spain 88

Jamaica 84

Croatia 83

Belize 72

Sao Tome and Principe 72

New Zealand 71

Cyprus 69

Poland 66

Latvia 65

Laos    65

Zimbabwe 65

Country   Net surplus as per cent of GDP

Singapore 294

Switzerland 158

Saudi Arabia 110

Norway 95

Algeria   93

Luxembourg 75 

Japan    53

Kuwait   45

Timor-Leste 44

Netherlands 41

Germany 38

Belgium   36

China 34

Botswana   33

Denmark   32

Commenting on the fact that it is the first time these figures have been put together, Tim Jones said:

“I find it incredible that no official organisation puts together such figures for the whole world. Whilst there are various gaps in the data, this is a first attempt to do so.”

Welcoming the release of the figures, Karel Williams, Professor of Accounting and Political Economy at Manchester Business School, said:

“This is Jubilee Debt Campaign doing what a radical NGO should be doing. Reworking the official figures to show the undisclosed long chains of international lending which create debt problems in the Global South and drive the Eurozone crisis.” 

Jan Toporowski, Professor of Economics and Finance at The School of Oriental and African Studies, University of London, said:

“Jubilee Debt Campaign have done a great service to the economics profession and practitioners in international money, banking and finance by putting together this data on the structure of international debt. This is the untold story behind developments in international banking and finance, a story which shows that these are not just everyday transactions helpfully carried out by international banks as a  benefit to the world in general. The data shows the legacy of debt that is the consequence of international transactions carried out without a proper system of debt management. They highlight the most urgent issue in international finance.”

John Weeks, Professor Emeritus at the School of Oriental and African Studies, University of London, said:

“The considerable confusion about which country has how much debt and identifying the creditor should be largely dispelled by this excellent work done by the Jubilee Debt Campaign.  This information, a vast improvement on what went before, will benefit both activists and researchers.”

Notes

[1] The figures released today show:

a) The net foreign owed debt as a percentage of GDP for 163 countries: the debt owed to foreigners by the whole country – public and private sectors – minus the debt owed to them.

b) Government foreign debt payments as a percentage of government revenue for 155 countries

c) The total (gross) government foreign owed debt as a percentage of GDP for 159 countries

d) The total (gross) private sector foreign owed debt as a percentage of GDP for 110 countries

[2] View the Tables of figures (Word, 25k)

[3] Methodology for calculations

a) The net foreign owed debt as a percentage of GDP

Data on the external debt of developing countries (government and private sector), and the debt owed to their governments, is from the World Bank, World Development Indicators database. However, no figures exist for debts owed to the private sectors in developing countries.

For richer countries, figures come from their International Investment Position figures, released by the individual countries, usually their Central Banks.

b) Government foreign debt payments as a percentage of government revenue

Data for developing countries comes from the World Bank, World Development Indicators database.

For richer countries, data was calculated by Jubilee Debt Campaign using:

- the World Bank External Debt database

- the IMF World Economic Outlook database

- the OECD Central Government Debt database

- IMF Article IV Consultation and Programme documents with individual countries

c) The total (gross) government foreign owed debt as a percentage of GDP

Data for developing countries comes from the World Bank, World Development Indicators database.

Data for richer countries comes from the World Bank External Debt database

d) The total (gross) private sector foreign owed debt as a percentage of GDP

Data for developing countries comes from the World Bank, World Development Indicators database. However, for many developing countries there is no data for private sector debts, whilst for many with data it is probably an underestimate.

Data for richer countries comes from the World Bank External Debt database

[4] For the situation in the 1950s and 1960s, see Bush, O., Farrant, K. and Wright, M. (2011). Reform of the international monetary and financial system. Bank of England Financial Stability Paper No. 13. December 2011.

“The current system has coexisted, on average, with: slower, more volatile, global growth; more frequent economic downturns; higher inflation and inflation volatility, larger current account imbalances; and more frequent banking crises, currency crises and external defaults [than the Bretton Woods System which existed from 1948 to 1972].”

FSC / BOI Private Equity Masterclass 2013

The Financial Services Commission (‘FSC’) jointly with the Board of Investment (‘BOI’) will be hosting the Masterclass: Excellence in Private Equity at the FSC House on 11 September. The Course is presented from two standpoints. Firstly, from the point of view of private equity funds and from the perspective of companies and entrepreneurs who are seeking private equity and venture capital.

The Course Director is Mr. Arvind P. Mathur, CFA, FRM and is currently the Chairman of Private Equity Pro Partners, India. Mr. Mathur has over 20 years Asia-Pacific private equity experience. He will provide examples of private equity transactions in China and other Asian countries like India as well as African markets to illustrate key concepts.

Mauritius is a major center for the flow of private equity and venture capital to Asia and Africa. A strong understanding of private equity and Mauritius' conducive framework for private equity has become a necessity for all players in the financial eco-system.

Besides fund managers, small, growing companies, as well as established corporates need private equity or venture capital to fund their growth strategies. Private equity is now intricately linked to mergers and acquisition and buyout transactions in complex ways.

The outcome of this course will enable participants to:

• Understand how private equity and venture capital funds are established;
• Master the operations of private equity and venture capital funds and how value is added;
• Understand deal structuring techniques;
• Appreciate how entrepreneurs and companies raise private equity and venture capital;
• Grasp the logic and underlying principles of private equity and venture capital valuation;
• Understand buyouts and leveraged buyouts, their use and structuring; and
• Understand private equity trends and deal structures.

Mauritius: Excise duty on household electrical appliances based on energy consumption

A New Excise duty shall be introduced on imported household electrical appliances as from 01 September 2013.

This New Excise duty shall apply to the following household electrical appliances:

1. Refrigerators
2. Dish washing machines
3. Ovens

and the rate of Excise duty to be levied on these electrical appliances shall be as per Part IV of the First Schedule to the Excise Act.

All importers of these electrical appliances shall be required to submit a certificate of conformity at the time of delivery of documents with an entry.

The certificate of conformity shall be issued by:

• the manufacturer of the electrical appliance; or
• an accredited institution listed in the Thirteenth Schedule of the GN 193 of 2013.

In case any certificate not emanating from an accredited institution or a document purporting to specify the energy consumption is not a certificate of conformity, the importer shall refer the certificate or document to the Mauritius Standards Bureau (MSB) for verification and recommendation.

The importer shall submit the verified and recommended certificate or document by MSB prior to the clearance of the goods.

These electrical appliances shipped on or before 31 August 2013 or imported under items E1, E2, E6, E9, E10 and E13 of Part II of the First Schedule to the Customs Tariff Act shall not be subject to the levy on energy consumption.

Constance celebrates New Zealand wines in Mauritius this September

Constance Belle Mare Plage and Constance Le Prince Maurice will be welcoming some of the finest winemakers from New Zealand for a week-long celebration of wine from the region.

Head Sommelier Jerome Faure will organise a range of wine dinners from the 15-21 September to introduce guests to New Zealand wines and giving them the opportunity to meet and talk with the winemakers.

Wine tastings will also be held for all the sommeliers of each resort as part of ongoing training to ensure that Constance sommeliers are at the head of their field.

New Zealand winemakers visiting Belle Mare Plage and Le Prince Maruice will include:

• Felton Road – a biodynamic wine producer using wild yeast, no fining or filteration has created wines of a unique character and an impressive reputation.
• Millton Vineyards and Winery – Situated on the East coast of North Island in the winegrowing region of Gisborne the family have introduced French traditions picked up working in the famous wine regions of France.
• Ata Rengi – A small New Zealand winery at the southern end of North Island, Ata Rengi has become famous for producing a renowned Pinot Noir.
• Escarpment – Stretching along the banks of the Huangarua River, Escarpment’s vineyards produce wine with a complexity and structure that have made them a leader in the market.
• Pegasus Bay – The second largest winery in Canterbury, Pegasus Bay is rated as the top winery of the region.

Guests will be able to enjoy a number of events across both resorts to introduce them to these fascinating New World wines:

Sunday 15 September

Belle Mare Plage – A management cocktail party featuring the wines

Monday 16 September

Belle Mare Plage – A special dinner featuring Escarpment wines at La Spiaggia

Tuesday 17 September

Belle Mare Plage – A special dinner featuring Pegasus wines at Indigo

Wednesday 18 September

Belle Mare Plage – A special dinner featuring Ata Rangi wines at Deer Hunter

Thursday 19 September

Le Prince Maurice – A management cocktail party featuring New Zealand wines including Felton Road 2010 Pinot Noir Bannockburn, 2012 Millton La Cote Pinot Noir and Ata Rangi Petrie Sauv Blanc.

A special dinner at l’Archipel featuring Millton wines including 2011 Opour Chardonnay, 2011 Riverpoint Viognier, 2010 Clos St Anne, 2010 Clos Samuel Viognier SBS.

Friday 20 September

Le Prince Maurice – A special dinner featuring Felton Road wines at Le Barachois including 2012 Riesling Bannockburn, 2011 Chardonnay Bannockburn, 2009 Pinot Noir Block 3, 2008 Riesling Block 1.

Saturday 21 September

Belle Mare Plage – A gala dinner featuring all the wineries.

Tax Havens and the Production of Offshore FDI : An Empirical Analysis

While most research on FDI focuses on the ‘real’ economy, at least 30% of global FDI stock is intermediated through tax havens. Using 2010 IMF data on FDI stocks, this paper sheds new light on geographical, historical, and political determinants of offshore FDI. Despite its intangibility, offshore FDI is as sensitive to physical distance as real FDI. Offshore FDI links are particularly strong between colonial powers and their current and former colonies. The OECD, while officially leading an agenda against tax evasion, internalizes significant offshore FDI within its membership. Indeed, offshore FDI is pervasive, affecting wealthy economies as much as developing countries.

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IFC Economic Report (Summer 2013) Offshore Voice – Kenneth Krys

The IFC Economic Report speaks to Kenneth Krys about the effects that the global financial crisis has had on the asset recovery industry within IFCs.

  

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Standard & Poor's: Report Says Rising Regulatory Pressure On Offshore Economic Models Threatens Small European Sovereigns' Creditworthiness

Increasing regulatory scrutiny of offshore economic models is making the future for small European sovereigns (Gibraltar, Jersey, Guernsey, Isle of Man, Andorra, Monaco, San Marino, and Liechtenstein) uncertain, according to a report by Standard & Poor's Ratings Services.

Titled "Rising Regulatory Pressure Heightens Risks To Small European Sovereigns' Creditworthiness," the report points out that the exceptional wealth of these small sovereigns is in part due to their heavy dependence on the high value-added financial services sector. The sector varies in size across the small sovereigns--from 14% of GDP in San Marino to 42% in Jersey. Dependence on this sector served the small sovereigns well prior to the global financial crisis of 2007-2009, and in some cases throughout it, with Gibraltar and the Isle of Man posting consistently positive rates of economic growth. However, dependence on financial services has since left small European sovereigns exposed to regulatory headwinds.

"An important appeal of several of these small sovereigns is their benign tax regime and/or client anonymity," said Standard & Poor's credit analyst Benjamin Young. "However, European and North American regulatory authorities are pressing for increased banking transparency and tighter rules on tax evasion and avoidance.

"It's unclear to us how far regulators will go to curtail the activities of offshore business centers, and to what extent any regulatory changes will affect the small European sovereigns. Although the regulators' focus falls periodically on offshore financial centers, the latest push, partly in response to the financial crisis, appears to us to be more sustained and focused."

We therefore believe that the creditworthiness of small European sovereigns increasingly depends on the extent to which they rely on tax or regulatory arbitrage or bank secrecy and their value to their larger "hosts." Hosts are larger countries with which small sovereigns frequently have historical ties and which often assume responsibility for small sovereigns' foreign affairs, defense, and monetary arrangements.

The regulation currently being discussed could cause some small sovereigns to lose parts of their financial services business to overseas competitors, forcing them to undertake a major reorientation of their economies. Other countries could find that the financial services they provide to their "host" countries' onshore financial sector - such as short-term lending facilities - are too important to be compromised.

This has positive and negative repercussions. On the positive side, some small European sovereigns are likely to become more adept at reinventing themselves to suit the evolving global environment. On the other hand, these sovereigns are on the receiving end of regulatory shocks.

Aside from regulatory risks, the prolonged recession in the European Economic and Monetary Union (eurozone) has weakened a number of small European sovereigns' trade centers, while most have seen their public finances deteriorate. In some cases, this has led governments to introduce unprecedented consumption and personal income taxes.

Therefore one of the key challenges we see for these small European sovereigns is to adapt to circumstances over which their control appears to be diminishing.

The report examines both rated and unrated sovereigns. Besides the rated Isle of Man and the Principalities of Liechtenstein and Andorra, we consider comparable unrated jurisdictions - Gibraltar (a British Overseas Territory), the Channel Islands of Jersey and Guernsey (British Crown Dependencies), the Principality of Monaco, and the Republic of San Marino.

Mauritius - Tunisia: Discussions on Preferential Trade Agreement Launched

A meeting between Mauritius and Tunisia to initiate discussions on a Bilateral Preferential Trade Agreement (PTA) between the two countries, opened this morning in Port Louis.

The Tunisian delegation is led by Mrs Saida Hachicha, Director of Trade and Industry, Ministry of Trade and Handicraft of Tunisia.  The Mauritian side, led by Mr N. Boodhoo, Deputy Director, International Trade Division, Ministry of Foreign Affairs, Regional Integration and International Trade, comprises representatives from stakeholder ministries, the State Law Office, and the private sector including the Mauritius Chamber of Commerce and Industry and MEXA.

Discussions on the PTA are based on a text proposed by Mauritius and to which the Tunisian side has already expressed broad agreement.  The two-day meeting is also addressing issues related to rules of origin and market access which will be annexed to the PTA.  Participants are being called upon to identify issues that need to be negotiated at technical level.  Presentations on the Mauritian and Tunisian respective economies are also scheduled.

It is expected that the PTA will provide a gateway for Mauritius to penetrate the Mediterranean market and this will help diversify the export market of Mauritius in line with government strategy.

Developing a partnership to maximise the benefit of the EU market

In his opening address, Mr Assad Bhuglah, Director International Trade Division, Ministry of Foreign Affairs, Regional Integration and International Trade stated that the launching of discussions on the PTA demonstrates the political will of the Mauritian and Tunisian governments to enter in a structured dialogue and agree on the framework that would help facilitate bilateral trade.

Both Mauritius and Tunisia have opened their economies through liberalisation measures, observed Mr Bhuglah.  ‘The EU constitutes the major market for the two countries.  The possibility therefore of developing a partnership to maximise the benefit existing in the EU market is real especially by developing a bilateral supply chain in garments and other products.  This will be in addition to the market opportunities which the PTA will provide, he added.

For her part, Mrs Hachicha expressed her conviction that the present meeting and the discussions on the PTA will enhance bilateral commercial exchanges and their development. ‘We expect a lot from the PTA under discussion with Mauritius which will certainly enhance the conditions of commercial exchanges between the two countries and the competitiveness of products exchanged’, she said.

It is recalled that Tunisia has concluded an Association Agreement with the European Union in 2008 allowing duty free access to Tunisian industrial products.  Given that Mauritius has concluded an Interim Economic Partnership Agreement with the European Commission, the PTA would provide a platform to explore the possibility of developing synergies to tap the European Market, especially, through the cumulation of rules of origin.

Trade Statistics

According to trade statistics, in 2012, Mauritius exports to Tunisia amounted to Rs 6.7 million comprising canned tuna, denim fabric of cotton, fertilizers, machinery parts and woven fabrics.

Imports for the same year amounted to 88 million rupees including electrical appliances, footwear, textiles products, sweet biscuits, fruits such as watermelons and dates.

Australia: ASIC releases report on emerging market issuers

Following the high profile collapse of some emerging market issuers overseas ASIC has undertaken a review of these types of entities here in Australia. Our review has not identified at this time any areas of systemic concern, however ASIC does consider that there are some specific challenges that retail investors should be aware of before making the decision to invest in an emerging market issuer.

Today ASIC has published Report 368 Emerging market issuers (REP 368) about our review of emerging market issuers.

REP 368’s key points:

• ASIC identified challenges emerging market issuers may be more likely to encounter than entities operating wholly in Australia.
• ASIC is urging emerging market issuers and their advisers to focus on their corporate governance and the disclosure they provide to Australian investors regarding these challenges.
• Investors should consider the risks before investing in an emerging market issuer.
• Investors need to know that they may not have the same protections when investing in an emerging market issuer that is listed in Australia but incorporated abroad.

As described in REP 368, ASIC found that there are a number of challenges faced by entities that are operating in, or have significant exposure to, emerging markets. Common challenges include implementing good corporate governance and management systems, operating through complex ownership or contractual arrangements, risks associated with relying on one or two key individuals located outside Australia, and the difficulty in accessing or verifying reliable information about an entity’s operation and performance.

The report recommends emerging market issuers respond to these challenges by implementing effective internal controls and risk management systems. It is important that entities focus on making appropriate disclosure to investors consistent with an exchange’s listing rules and ASIC’s regulatory guidance.

‘ASIC is shining a light on emerging market issuers and their governance and disclosure, because we want to lift the sector’s transparency. And that is because we want investors to be confident and informed when putting their money in these companies,’ ASIC Commissioner John Price said.

Further investor guidance on emerging market issuers is available on ASIC’s MoneySmart.

ASIC will continue to monitor emerging market issuers in the coming year by including a number of these entities in its financial reporting surveillance programs and through reviewing selected disclosure documents lodged with it.

Download REP 368

Bank of Mauritius: Guideline on Complaints Handling Procedures

1. Introduction

One of the objects of the Bank is to ensure the stability and soundness of the financial system of Mauritius. In order to help achieve that objective, an amendment has been brought by The Economic and Financial Measures (Miscellaneous Provisions) Act 2012, whereby a new Section 96A has been added to the Banking Act 2004, laying down specific provisions in relation to the protection of customers of financial institutions

This guideline sets out the minimum criteria to be observed by financial institutions for the handling of complaints from their customers.

2. Authority

This guideline is issued under the authority of Section 50 of the Bank of Mauritius Act 2004 and Sections 96 A and 100 of the Banking Act 2004.

3. Scope of Application

This guideline applies to financial institutions licensed by the Bank of Mauritius under the Banking Act 2004 with the exception of paragraphs 6, 7, 8, 10, 14, 15, 16, 17, 18, 27, 28 which shall not apply to cash dealers.

4. Effective Date

This guideline shall come into effect on 01 November 2013.

5. Interpretation

In this guideline:-

“Bank” means the Bank of Mauritius established under section 3 of the Bank of Mauritius Act.

“Complaint” means any act or omission of an institution made within a period of 7 years as from the date thereof, which causes a customer to be aggrieved.

“Complaints Officer’ means an officer appointed under Section 96A of the Banking Act 2004 for banks and non bank deposit taking institutions.

“Financial institution” has the same meaning as in the Banking Act 2004.

SECTION 1 - PROCEDURES

6. Financial institutions should have in place appropriate and effective internal procedures for handling customer complaints. In formulating these procedures, financial institutions should take into account the provisions of Section 96 A of the Banking Act 2004.

7. The internal complaint handling procedures should be in writing and their scope should include at least of the following:

(i) receiving complaints;

(ii) responding to complaints;

(iii) the appropriate investigation of complaints;

(iv) the availability of redress and compensation, in appropriate circumstances.

8. Financial institutions should put in place appropriate management controls and take reasonable steps to ensure that they handle complaints fairly, consistently and promptly.

SECTION 2 - ACCESSIBILITY

9. Financial institutions should ensure that their customers know where and how to make complaints.

10. Financial institutions should publish relevant provisions of their internal complaint handling procedures, in the form of a leaflet as well as on their websites with a view to bringing actual notice thereof to their customers. Notice may also be given by e-mail where this is available. Financial institutions should ensure that their complaint handling procedures are provided to new customers at the time of the establishment of the business relationship with them.

11. Financial institutions should allow customers to make complaints by any reasonable means for example by letter, facsimile, e-mail, phone or in person.

SECTION 3 –EMPOWERMENT

12. Complaint Officers should have the authority to settle complaints including offering redress where appropriate or should be able to have ready access to those who have the necessary authority.

13. Complaints, in appropriate cases, should be escalated to senior management if not resolved by staff below.

SECTION 4 - RESOURCES AND STAFF TRAINING

14. Financial institutions should make available the resources needed to ensure the efficiency and effectiveness of a complaint management system. Resources comprise staff, appropriate training and technology.

15. Financial institutions should take reasonable steps to ensure that all relevant employees are aware of their internal complaint handling procedures and that they act in accordance therewith.

SECTION 5 - MONITORING AND AUDIT

16. Effective procedures to monitor complaints should be set up with regular reports to senior management for review. Information provided to management should include at least the following:-

• Statistics on the volume and type of complaints received;
• How well the internal complaint management system meets prescribed performance standards;
• The level of customer satisfaction;
• Whether recurrent problems are being identified and corrected.

17. A regular assurance exercise should be conducted by competent and independent staff. The assurance exercise should aim at examining whether the complaint handling procedures fulfil the stated aims of the policy and that the procedures are operating effectively.

18. The results of the assurance exercise should be used to improve the complaint handling procedures, operating processes, products and services as appropriate.

SECTION 6 - TIME LIMITS FOR DEALING WITH COMPLAINTS

19. Where a complaint can be resolved on the spot, this has to be favoured. In the case that the complaint has not been resolved on the spot and is not in writing, customers should be advised to submit their complaints in writing.

20. Financial institutions should, except where the complaint has been resolved, send a written acknowledgement of a complaint within three working days of its receipt, giving the name, job title and contact details of the person handling the complaint.

21. A written reply should be sent to the complainant within 3 months as from the date the complaint is received by the financial institution.

22. Complainants should be informed in the internal complaints procedures that in case they are not satisfied with the reply provided to them, or they do not receive a reply from the financial institution concerned within 3 months as from the date of their complaint, they may refer their complaint to the First Deputy Governor Bank of Mauritius, specifying the nature of their complaint, the redress sought for and the reasons for their dissatisfaction duly accompanied by the following documents:

(i) a copy of the complaint made to the financial institution;

(ii) a copy of the reply made by the financial institution; and

(iii) any other document or information which may be of relevance to the complaint.

SECTION 7 – RECORD KEEPING

23. Financial institutions should record and retain details of complaints for at least a period of 7 years as from the date of their receipt.

24. The details to be recorded should include, where applicable:

• the complainant's name;
• the substance of the complaint;
• any correspondence between the institution concerned and the complainant,including the manner in which the complaint was resolved and details of any redress offered by the financial institution concerned; and
• Whether any alleged problems, if substantiated, were rectified and the manner in which this was done.

25. The records should be kept in a convenient and accessible form to facilitate examination by the Bank during regular on-site or ad hoc examinations.

SECTION 8 – NOTIFICATION TO THE BANK

26. Financial institutions should provide the Bank, on a quarterly basis, with information on complaints as per format annexed.

27. To enhance communication with the Bank in relation to complaint handling, financial institutions should provide the Bank within one week as from the issue of this guideline, with details of the complaints officer appointed in terms of Section 96A of the Banking Act 2004.

28. Financial institutions should notify the Bank as soon as reasonably practicable of any subsequent change with regard to the complaints officer.

Bank of Mauritius

15 August 2013

Mauritius - Employment Relations Tribunal: New Employment Promotion and Protection Division Operational

A new Employment Promotion and Protection Division (EPPD) is operational since yesterday at the Employment Relations Tribunal (ERT). This division will deal will all cases of reduction of workforce, whether on a short term or permanently or the closing down of an enterprise, referred by the Ministry of Labour, Industrial Relations and Employment.

The official launching of the EPPD was held yesterday at Newton Tower, in Port Louis by the Minister of Agro-Industry and Food Security, Attorney General, Mr Satya Veyash Faugoo in the presence of the Minister of Labour, Industrial Relations and Employment, Mr Shakeel Mohamed and the Minister of Business, Enterprise and Cooperatives, Mr Jangbahadoorsing Seetaram.

The setting up of this new division has been enunciated in the Employment Rights Act proclaimed in 2008. It will be presided by the President or the Vice-President of the ERT together with two members well versed in the field of employment and finance respectively.

Speaking at the launching ceremony, the Attorney General, Mr Satya Veyash Faugoo commended the task which is being undertaken at the ERT, which according to him, is a clear indication of the strong commitment of the Government to ensure that decent work prevails at the workplace in addition to protecting the rights of workers.

The Minister of Labour, Industrial Relations and Employment, Mr Shakeel Mohamed for his part, made an appeal to the employers to respect the terms and conditions of employment as defined under the two labour laws that is the Employment Rights Act and the Employment Relations Act.

The President of the ERT, Mr Rashid Hossen, called upon the lawyers to assist the ERT in meeting its deadlines. He added that the time limit for the Tribunal to give its verdict is only 30 days with an extra 30 days in exceptional cases to consider whether the employers’ decision is justified. According to him, this is itself a challenge for the ERT taking into account the Constitutional and other legal rights of disputants.

For the purposes of this new division, the law defines the word “employer” to be one of not less than 20 workers. The rationale behind the setting up of the EPPD at the ERT is to ensure that an independent, impartial body with the required expertise in employment relations matters is dealing with such important issues which may have a bearing on numerous workers.

The ERT has since 2012 implemented an e-tribunal electronic case management system through which the parties can exchange pleadings by e-mail. It can also post online its awards and statements of case and of defense or other documents presented before the Tribunal.

ERT has as main functions to settle industrial disputes in the civil service, the private sector and parastatal bodies and local government services in addition to hearing appeals related to decisions of the Conciliation and Mediation Commission. ERT also contributes to the promotion of harmonious industrial relations and is expected to enquire into the dispute and make an order/award/ruling within 90 days of the date of lodging.