This morning, our Compliance Officer sent this message to the NWT team:

“The European Commission (EC) has published the revised list of High-Risk Third Countries in its official journal on 21 February 2022. Mauritius is clear. We are not on the list of countries having strategic deficiencies in the AML/CFT Regime. The amendments will come into force 20 days following their publication.

This decision follows the approval of the EC on 07 January 2022 to clear Mauritius by acknowledging that it no longer presents strategic deficiencies on the basis of the criteria laid down under Article 9 in Directive (EU) 2015/849.”

What a relief! Many of our funds’ European investors, primarily institutional ones, were unable to honour their capital commitments for months. General Partners of the concerned funds were at a loss. There are deals that have already gone through investment committee approvals and need to be funded.

Commitments were taken with promoters of target businesses and now investments were on hold with cascading effects on underlying businesses. Some GPs we administer also had to take bank loans against uncalled capital commitments to fund their own operations. As Fund Administrators, we have a duty to assess the solvency of the funds and of the GP entities. When we questioned the institutional investors on why the delay in funding, they confirmed they were still committed to finance their calls.

They reassured us that they have absolutely no doubt about the robustness of the due diligence measures put in place by the fund, the GP and the Fund Administrator in Mauritius for the management of their investment. As a matter of fact, they’ve witnessed first-hand these measures as investors. But they were simply unable to obtain institutional approval to pay their capital calls because of the black-list. In some cases, we’ve had to set up side-vehicles in European jurisdiction to enable the drawdown of commitments but this has been onerous and is eating up in the fund IRR.

So, it’s a great relief for the European institutional investors, the GPs and promoters of underlying businesses that draw down capital calls can now be restored.

Ganessen Soobramanien

22 February 2022