BIZweek n°279 28 fév 2020
BIZweek n°279 28 fév 2020
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  • Parution : n°279 de 28 fév 2020

  • Périodicité : hebdomadaire

  • Editeur : Capital Publications Ltd

  • Format : (260 x 370) mm

  • Nombre de pages : 7

  • Taille du fichier PDF : 1,9 Mo

  • Dans ce numéro : lutte anti-corruption, le Zimbabwe recherche ses milliards dissimulés dans plusieurs pays, dont Maurice.

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VENDREDI 28 FÉVRIER 2020 BIZWEEK ÉDITION 279 FAT F *Wb The Financial Action Task Force on February 21, 2020, has placed Mauritius in the list of «jurisdictions under increased monitoring», commonly referred to as the «grey list» and has stated the following : «In February 2020, Mauritius made a high-level political commitment to work with the FATF and ESAAMLG to strengthen the effectiveness of its AML/CFT regime. Since the completion of its MER in 2018, Mauritius has made progress on a number of its MER recommended actions to improve technical compliance and effectiveness, including amending the legal framework to require legal persons and legal arrangements to disclose of beneficial ownership information and improving the processes of identifying and confiscating proceeds of crimes. Mauritius will work to implement its action plan, including by : (1) demonstrating that the supervisors of its global business sector and DNFBPs implement risk-based supervision ; (2) ensuring the access to accurate basic and beneficial ownership information by competent authorities in a timely manner ; (3) demonstrating that LEAs have capacity to conduct money laundering investigations, including parallel financial investigations and complex cases ; (4) implementing a risk based approach for supervision of its NPO sector to prevent abuse for TF purposes, and 5) demonstrating the adequate implementation of targeted financial sanctions through outreach and supervision.» Financial Action Task Force This led to panic amongst the Foreign Portfolio Investors (FPI) since the eligibility criteria required to be met by any person to register as a foreign portfolio investor under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations 2019 (FPI Regulations) include that such person should not have 25% or more investors by value or controlling investors from jurisdictions identified by the FATF as : ▪ a jurisdiction having a strategic Anti-Money Laundering or Combating the Financing of Terrorism deficiencies to which counter measures apply ; or ▪ a jurisdiction that has not made sufficient progressin addressing the deficiencies or has not committed to an action plan developed with the FATF to address the deficiencies. Further, the Operating Guidelines for FPIs, Designated Depository Participant and Eligible Foreign Investors (Operating Guidelines) states that if a jurisdiction, which was a compliant jurisdiction at the time of grant of registration to a FPI, is, inter alia, listed in FATF public statement as ‘high risk’and ‘non-cooperative’jurisdiction, then the concerned custodian shall not allow such FPIs to make fresh purchases till the time the jurisdiction/FPI is compliant with the FPI Regulations. Due to ambiguity around the ambit of ACTA PUBLICA FATF LIST OF ‘JURISDICTIONS UNDER INCREASED MONITORING’Status quo for Mauritius based FPIs - No Need to Panic On 21 February 2020, the Financial Action Task Force (FATF) issued a list of ‘jurisdictions under increased monitoring’, popularly known as the ‘grey list’and to the dismay of several Foreign Portfolio Investors (FPIs), Mauritius endedup featuring in this list alongside 17 other jurisdictions, for the first time w ‘jurisdiction that has not made sufficient progressin addressing the deficiencies sufficient progressin addressing the deficiencies or has not committed to an action plan developed with the FATF to address the deficiencies’, and whether as a consequence of being tagged as a ‘monitored jurisdiction’, Mauritius could be regarded as ‘high-risk’and ‘non-cooperative’jurisdiction, uncertainty prevailed in the market and several designated depository participants (DDPs) stopped trading by Mauritius-based FPIs. With custodians and market participants reaching out to SEBI to get clarity on the status of Mauritius-based FPIs, SEBI has issued a statement today,i.e., 25 February 2020, clarifying that Mauritius-based FPIs would maintain their status quo in terms of eligibility under the FPI Regulations and could thus continue to trade. SEBI also highlighted to the intermediaries that inclusion of a jurisdiction in the grey-list does not call for the application of enhanced due diligence to be applied to such jurisdiction, but that FATF encourages its members to take into account this information in their risk analysis. Comment While the inclusion of Mauritius in the FATF grey list sent an initial alarmamongst ti I stakeholders, SEBI’s clarification that as per FATF, when a jurisdiction is placed under increased monitoring by FATF, it construes that the country has committed to swiftly resolve its identified strategic deficiencies within agreed timeframes and is subject to increased monitoring, may be seen as a blessing in disguise for Mauritiusbased FPIs. Going by SEBI’s positive spin on the inclusion of Mauritius in the grey list, if Mauritius continues its endeavour to addressing the deficiencies highlighted by FATF, it may pave the way for it being regarded as an FATF-compliant country and lead to the inclusion of Mauritius in the member list of the FATF. KHAITAN &-CO Advocates since 1911 Khaitan & Co - Siddharth Shah, Rohit Jayaraman and Khusboo Agarwal 26 February 2020 [Founded in 1911, Khaitan & Co is one of the oldest and largest Indian law firms] 4
VENDREDI 28 FÉVRIER 2020 BIZWEEK ÉDITION 279 EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT How the finance industry is leading the way to a greener future Financiers, not policymakers, are crafting climate action, European Bank for Reconstruction and Development (EBRD) conference hears. Freak weather events that focus minds on the dangers of climate change are fast becoming the norm, from blazing forests in the Amazon and bushfires across Australia to StormDennis, which brought floods around the UK last weekend. The latest World Economic Forum (WEF) global risk report says that, for the first time, the top five risks the world is facing are all climate-related Vanora Bennett, Green spokeswoman at EBRD 21 Feb 2020 As decision-makers around the globe grapple with how to address this challenge with faster, more comprehensive and better coordinated action on climate change, another strange phenomenon is also coming into the open. In today’s climate crisis, it’s not policymakers who are leading the way towards a virtuous solution. It’s the financial system. The days of corporate Gordon Gekkos cackling «greed is good» as they rape the earth are long gone, was one message from a February conference on climate corporate governance held at the EBRD’s London headquarters. Today banks, companies and international financial institutions are talking the language of cooperation and collaboration, an approach which, so far, has taken them farther, faster, towards managing climate change than parallel political and policy processes. «It’s actually the financial system that seems to be ahead, and in certain cases way ahead, of all the policy,» the EBRD’s climate change managing director Josué Tanaka told delegates from across the financial system, coming together to compare approaches. «How far can we keep on moving ahead of policy ? » During a day-long event which tracked climate corporate governance in financial institutions from principles to policy to risk assessment to products, it became clear that the finance industry would welcome more guidance, even as a worldwide climate finance business model begins to take shape. «Clearly we’re very hungry for clarity and standards – we want to know which systems and accreditations we hang our hat on going forward,» said the EBRD’s climate change director Terry McCallion, summingup the day. Climate events unpredictable «What the private sector needs is absolute certainty and clarity on what the regulation’s going to look like when it comes … what’s the business model for this climate emergency that we’re in ? » The challenge is huge. Today worried companies and banks looking at their balance sheets are seeing both new physical risks (their assets might be burned or flooded in the next freak weather event) and transition risks (their assets might not be green enough for the lower-carbon economy that will be needed for our economic system to survive, and become uselessly «stranded»). Success would look like this. The finance industry works out exactly how to define and measure today’s complex situation. Policymakers are encouraged to catchup and provide government legislation and central bank regulation, so solutions that will decarbonise the world can soon be financed, through the commercial banking system, at the vast scale needed to keep global temperature POST SCRIPTUM rises down below two degrees and if possible to 1.5 degrees. Roland Mees, a director of sustainable finance at ING, underlines the apocalyptic cost of failure. «At a three-degree scenario, there will not be any market. We will not be here. We will be rescuing our families and ourselves from the consequences of climate change.» But how even to measure the risks ? In banking terms, this is a practical question. Traditionally, corporate risk was measured and priced by simply extrapolating from past trends. In a world where climate events are increasingly unpredictable, and new solutions may have no track record, there’s now growing recognition of the need to scrap that backward-looking way of thinking altogether and start looking at future risks through completely different, forward-looking, scenario-based analysis. Financial instability Creative thinking on such adventurous approaches, along with imaginative collaborations and partnerships and measuring systems (TCFD, NGFS, UNEP FI) and climate finance instruments, are springingup allaround the financial system. Yet this is far from conventional, problem-solving, «don’t-tie-me-down» capitalism, as speakers’repeated requests for more central bank regulation and more action by national governments show. With all kinds of bespoke solutions and systems now jostling for attention, the finance industry is a coalition of the willing looking for a leader to harmonise approaches. One closely argued argument for more central bank action came from Luis Pereira da Silva, deputy general manager of the Bank for International Settlements. He’s also the author of «Green Swan», a book on what a climate-prompted catastrophe might look like. Because a climate disaster could cause a cascade of unpredictable further consequences, whether environmental or social or economic or geopolitical, the fear his book focuses on is that climate change could eventually trigger a complex, unquantifiable «green swan» cataclysm worse than a systemic financial catastrophe. To stave this off, Pereira da Silva argues that financial and climate stability should be considered as «two interconnected public goods». And – since climate change brings financial instability, and it is the job of central banks to maintain financial stability – he is among those urging central banks to become «more proactive in calling for precisely coordinated change from actors in society. Central banks should have a central role, help the private sector, civil society, and the international community to think about all this because there are a number of actions that need to be implemented at the same time. Central banks’role in settingup and making these actions effective will be important.» Collective responsibility Praise for government intervention came from another speaker, Sean Kidney from the Climate Bonds Initiative, who attributes the ever cheaper prices for solar energy that have helped revolutionise the global market in renewable energy to positive action by governments in Germany and China. «We’ve seen the collapse of solar. That happened because of policy action by states, and we haven’t twigged to it. It was Germany that established a feed-in tariff, followedup by China, with massive levels of procurement of solar across China. In most economies the prime driver of price reduction is volume procurement. So you see a couple of governments acting on something ; now think what have been the consequences. We are getting really cheap solar, in the US, in the Gulf, in Australia – cheaper than gas. US firms are abandoning gas and going straight to solar, just because it’s cheaper. That is the benefit of government action.» Kidney also wants finance industry colleagues to go and «educate your public sector» to bring governments into climate action, «because the public sector in nearly every country in the world is 20 years behind the finance sector, and they’ve got to catchup. Your government liaison people can be talking to MPs, government ministers, and apprise them of what it all means. In fact you need to, because the action they take will reduce your risk, create better opportunities for you, and by the way create a better future for your children.» The future of the children is always waiting to come into this debate. So are existential questions about how humanity got itself into today’s climate predicament, and how best to get out. Pereira da Silva’s answer is collective responsibility in a future with «new institutional and new governance arrangements». «Somehow, somewhere, some time ago, we lost the ancient sense of collective responsibility that small human groups have vis-à-vis themselves and their environment. Now we have to regain this sense of responsibility in a very different world. We are globalised. We have technology. We want efficiency and speed, and we know that it’s going to be very challenging. To link us together, we need new institutional arrangements and new governance arrangements. By working together with these very difficult challenges, and trying collectively to answer cooperatively, I hope these efforts will trigger a much needed sense of collective responsibility for ourselves, for our generation, and the future of our kids.» 5

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