Emphasising that India-focussed overseas funds are subjected to stringent checks in Mauritius, financial services regulator here said it has stepped up enforcement of norms to prevent any round tripping of funds through the island nation.
There are provisions to cancel the licence of entities if they are found to be indulging in round-tripping or money laundering activities, Mauritian Financial Services Commission (FSC) CEO Clairette Ah-Hen said.
“We have stepped up in terms of our enforcement. We look at who the people are behind (the investments into India)...,” she told PTI in an interview here.
India and Mauritius are discussing changes to their bilateral taxation treaty to address concerns of the Indian side and the next meeting of a Joint Working Group (JWG) in this regard is expected to be held later this month or early in October.
Mauritius says it has put in place various conditions for issuance of Tax Residency Certificates (TRCs) -- which allow entities to take tax benefits under the Indo-Mauritius Double Taxation Avoidance Agreement (DTAA).
One of the conditions is that if any such entity is found to be involved in round tripping activities, their licenses would get cancelled, said Ah-Hen, who is a member of the JWG.
“... if you (an entity) are going against the policy (of not doing round tripping), we are going to take your license off. This is the pre-condition we have put and anyone who is going to invest in India would know, this is the Indian condition we have agreed to,” she noted.