The Financial Intelligence Unit of the Mauritius government has sounded out the Indian government on having a coordinated approach in the global fight against money laundering.
To tackle the menace of money laundering, the banking secrecy laws have also been relaxed by the African country.
"Mauritius is in the forefront of the fight against money laundering arising from drugs/ illegal arms sales and terrorism. As and when the Indian government, which has already passed an anti-money laundering legislation, floats its own FIU, we would like to exchange information pertaining to money laundering," Sushil KC Khushiram, minister of economic development, financial services and corporate affairs, Mauritius, said.
The minister, while expressing relief on the banning of overseas corporate bodies from investing in India, emphasised that the double taxation avoidance agreement between the two countries was important as most of the foreign institutional investments into India was via the Mauritius route.
Incidentally, India accounts for the maximum investments made by offshore investment entities operating out of Mauritius.
He stressed that they wanted to wipe out the negative image that his country had acquired due to the ongoing controversy over the issue of participatory notes.
"We want to be known as a country from where clean business can be obtained," he said.
Incidentally India, China and South Africa are among the few countries where this kind of a problem over foreign investments have been raised. This is due to the strict capital control regimes in these countries, Khushiram said.
He assured that the Financial Services Commission, which regulates the non-banking finance sector in Mauritius, checks the antecedents of FIIs through customer verification and identification before granting registration.
Mauritius, it may be noted, has a zero capital gains tax regime and has DTAA with 30 countries.
"We will not allow abuse of the DTAA by foreign institutional investors. DTAA helps India get foreign investments, which it otherwise would not have got," averred Khushiram.
He suggested that Indian companies should take advantage of the DTAA and route their investments into other countries via Mauritius.
He pointed out that the FSC has signed a Memorandum of Understanding with the Securities and Exchange Board of India for exchange of information.
Indian information technology companies have evinced keen interest in setting up base in Mauritius, which boasts of a brand new cyber tower.
These include the likes of Wipro. Infosys and Satyam have already set up shop there.
He, however, lamented the fact that not enough Indian banks were operating in Mauritius. Only Bank of Baroda and State Bank International (offshore unit) have their activities there.
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