Centralizing crime tracking in Mauritius

Speaking at the opening session of the UN Global Conference on Anti-Corruption in Small Island States, the Prime Minister announced on Monday last that the government was contemplating enacting/re-enacting a series of legislations to tackle corruption. The objective apparently is to have a set of legal dispositions in place to deal with the matter, headed by what has been called a Financial Crime Commission (FCC).

The proposed FCC will oversee the operation of a revised anti-corruption agency (now entrusted to the Independent Commission against Corruption under the Prevention of Corruption Act 2002), the Financial Intelligence Unit, the Assets Recovery Unit as well as units implementing related decisions of the Financial Services Commission and the Financial Reporting Council.

The stated aim of the proposed centralization process is to ensure better coordination in the fight against financial crime and to plug loopholes in any specific institution fraudsters may exploit to undertake illicit transactions. The Prime Minister stated that the adoption of such measures, including amendments to the Prevention of Corruption Act, are intended to deal with cases of money laundering and unlawful enrichment. There will also be a legal framework to facilitate whistle-blowing, making at once for the safety of the whistle blowers and the protection of the reputation of persons who may have no case to answer.

It will be recalled that one of the main planks of L’Alliance Lepep in the last general elections was to remove the rot that they perceived as having set in public life due to alleged corruption in various spheres of activity. So, dealing with such a problem cannot be a bad thing in itself. Besides, it is a theme which has high appeal to voters, especially those who want to put themselves in the clean role of redressers of abusive wrongs done by others, especially those wielding political power.

Governments have the privilege to propose new legislations or changes thereto. It is not clear however whether the legislations sought to be re-enacted/amended are so fundamentally flawed that they would require to be so overhauled, with the creation of a new body such as the FCC for overseeing a whole range of activities.

For example, the Financial Reporting Council which is sought to be integrated in this structure operates on an altogether different platform compared with others dealing with corruption. Its job is to ensure that financial statements are prepared and presented in compliance with international standards of accounting and auditing by duly accredited professionals. It’s strange therefore that it should be amalgamated with others like the FIU and the ICAC which deal with fraud and corruption, in the FCC framework.

In the ordinary course of business, one would have expected the government to have identified specific flaws that created pass-through situations for abuse and corruption to take place with reference to individual specific legislations. It could then have amended the specific legislations in question, as appropriate, to plug the loopholes. There was no need, in other words, to re-enact them or to consolidate them in a bid to create a new hierarchy of responsibilities, so to say, to make the framework more effective to deal with the problems.

Specialised units, such as the FIU, do a fantastic job to track down money laundering locally and at the international level if no one interferes with the way they should do their job. Once the rules are clearly laid down to this effect, any establishment dedicated to fight a specific set of financial crimes can address issues in which it specializes more effectively that a big administrative machinery in which matters should be up streamed across an entire hierarchy having discretionary powers to chase up or not to chase up a particular issue. This arrangement may actually contain loopholes due to the number of steps involved to reach the top of the pyramid.

If the rules for coordinating the chasing up of different types of white-collar crimes across specialized institutions are well laid down, there is, in other words, no need to centralize.

In certain other places, institutions have sprouted up from one central source, e.g., the police or department of investigations into crime. They have evolved from this mainspring into a unified structure. Such a unified structure has developed its own system of internal coordination. It therefore has the associated synergy to deal within a common structure with all sorts of criminal misbehaviours.

But the effectiveness of such centralized crime-tracking institutions arising from historical synergy fits into that specific environment. In Mauritius, by contrast, the development of crime-busting institutions has been a piecemeal process, with institutions being set up at different times and having now developed their own specificities and strengths. It would not be wise to dilapidate the acquired expertise of each one of these by lumping them together in one big unwieldy structure like the proposed FCC. That may not be apt however where a country like Mauritius has set up distinct financial crime busting institutions responding to distinct global bodies set up with missions of their own in different fields: money laundering, asset recovery from drug traffickers, tracking down serious fraud, chasing up tax evaders, etc.

There must be research to back up any claim that in our case, centralising – rather than strengthening the hands of distinct implementers at existing separate anti-crime, anti-fraud institutions against powerful politicians, and other patriarchs hailing from private or other business interests – will be the right response to the otherwise continuing stream of abuse taking place over decades.

• Published in print edition on 21 August 2015