INTERVIEW: MEENAKSHI SAXENA
By
Vishal Bhidu
Compliance is everyone’s business not just meant for the Compliance department, says Meenakshi Saxena, the Executive Director at AMG Group. In this interview, Meenakshi discusses several business aspects such as a slew of budgetary measures trickling into the financial services, underlying market challenges, growing importance of the Financial Services sector, and the thriving NRI market across jurisdictions such as Dubai as we speak about benefits along the India-Mauritius corridor. Today, AMG Solutions is growing in leaps and bounds where it has recently obtained its license to operate as a Management Company.
Meenakshi is a self-motivated, energetic, and lively human being, a Citizen of India who resides in Mauritius with her family for nearly 14 years.
A law graduate from India where Meenakshi has worked across different industries since 2001, in several countries before moving to Mauritius. Since then, She has worked with an investment company for eight years bringing in her expertise, and is now associated with the AMG Group for the past 6 years.
AMG is an avant-gardist, proactive, young, and promising group. From its starting point as a legal & Tax advisory firm and is now a licenced Management Company in Mauritius. Meenakshi serves as an Executive Director of AMG Group with additional responsibilities of Legal and Compliance.
- As a global financial services leader, AMG Group boasts of several offerings from tax and Legal advisory to compliance and now operates as a Management Company. How do you assess its growth path in terms of domiciliation and compliance as we see opportunities across the Golden Triangle-Mauritius-Middle East-Asia, including India?
Your understanding is correct about the service offerings of AMG. We will continue to grow in all service lines. Domiciliation and compliance service is part and parcel of our Management Company (MC) service offerings that will be one of our focus areas for growth.
Regarding the so-called Golden Triangle, as an MC we don’t look at short-term strategies as things could change quickly. For instance, 9 percent tax being imposed in UAE could very well create challenges. We would rather continue to focus on more long-term and sustainable businesses, which can withstand waves of change. Having said that, we do have a presence in Dubai to assist if our clients want to avail of the opportunity.
2. The budget comprises several announcements encompassing the National Risk Assessment of money laundering and terrorism financing risks with the help of the World Bank coupled with amendments to the current AML/CFT legal framework and Whistleblowing Act. How do such initiatives help buttress the jurisdiction’s image as we speak about the growing importance of compliance to ensure that it doesn’t fall prey to future grey/black lists?
The aim of the National Risk Assessment (NRA) was to identify, understand and assess the ML/TF risks faced by Mauritius while implementing the necessary procedures cum control to mitigate and monitor these risks. It is great to see that the Government continues to focus on this area and in ensuring that Mauritius is not blacklisted. Having said that, it will be important to keep the right balance and not go for overkill. Regulatory framework should be practical, implementable, and yet effective. One can lose focus on the very fact that there will be no compliance left if there is no business left.
What should remain of utmost importance for Mauritius is to help develop the resource pool both at the industry and regulatory levels, which can understand and implement the AML / CFT framework in its true letter and spirit. Mauritius has always been and will be a gateway to Africa and Asia.
3. How does the setting up of a new commission of an independent assessment on the effectiveness of the AML/CFT system ahead of the ESAAMLG mutual evaluation in 2025 help ensure the jurisdiction keeps pace with the exigencies of an increasingly demanding compliance while at the same time, help protect the global business sector?
We all know that so far ESAAMLG has conducted 5 evaluations and has been satisfied with the progress made by Mauritius. The jurisdiction remains under continuous monitoring and thus no one can undermine its importance and ability to maintain the highest standards of AML / CFT so as not to fall again under the “grey list” of the Financial Action Task Force (FATF). Keeping this in mind, the setting up of a new commission for independent assessment will ensure a focused approach and that Mauritius is fully compliant in the next evaluation. Whilst, each regulator is playing its role, this commission shall be able to see how effective the measures have been so far and shall certainly help prepare for the ESAAMLG evaluation.
As you refer to safeguarding the interests of the global business sector, let’s hope that the independent commission will understand its importance for the jurisdiction. That it will be able to make an assessment and recommendations, which are not excessive and yet achieves the necessary objectives.
4. As we speak about the Consultation Paper issued by FSC on compliance, to what extent should MLROs and DMLROs be well trained to raise awareness in dealing with the exigencies of AML/CFT, changing nature of the business sector going digital while being able to deal with challenges such as Big Data, AI and Chat GPT?
Training both the existing and fresh resources should be a priority for both the industry and regulators. There is a general feeling that there is a lack of required resources needed for the industry where they should be extremely well trained, and it comes from experience. The Consultation Paper issued by FSC is a step in the right direction and we also hope that specialized compliance licenses and service providers would allow outsourcing and creating a much desired competency level.
The various challenges posed by new technologies are given where experienced and well-trained staff should be able to deal with these in the normal course.
5. As a management company, how do AMG Services see opportunities offered by the thriving NRI market in Dubai to boost potential alongside the India-Mauritius corridor coupled with the huge potential to develop investment banking, fund management, and family offices on the local shores?
At AMG we see things differently. Mauritius and Dubai are offering services which to a great extent are competing with each other. There are certain advantages that Dubai has in terms of well-established bases for large companies, better connectivity, infrastructure and proximity to Africa, Asia, and Europe. Over the years it has been able to establish itself as a real business hub and it can reap the benefits trickling to other sectors to if they put their act right. Despite that, Mauritius has a clear edge in being well entrenched in a well-established offshore centre and eco-system supporting it. Be it, the regulator, MCs, or the banking system which understands and serves the offshore needs. On the other hand, Dubai lacks it and at least for now.
We believe every business and client will have a unique requirement with the UAE now imposing a tax, it will be interesting to see how things evolve.
6. Back to the budget, how do you assess the scope of VCC to ensure their use for family offices and wealth management, encompassing wealth manager under private banking as well as the introduction of a new framework to support licensing and operation of Electronic Money Institutions?
When VCC (Variable Capital Companies) framework was announced and implemented, it was considered a welcome move by the industry. However, there existed various doubts both about its uses and clarity on the tax treatment and ring-fencing. The industry has been making several representations designed for the VCC to become more potent. In line with that, recent budget announcements and clarifications will greatly assist in the much wider uses of VCC, including its use as family offices under one umbrella.
On a similar note, the MIFC can also contribute through the concept of VCCs under “Gift City”, the talk of new India.
Electronic Money Institutions (EMI) are yet another framework that is being promoted and adopted in various jurisdictions, especially in Europe. It is proving to be efficient and effective, both in terms of giving businesses easy and cheaper options.
We need to understand that Mauritius is a developing country where the EMI is a great initiative that the Government has put in place to help support and promote, considered a new era in banking and a need for the jurisdiction. In the context of the post-COVID-19 pandemic, it has become more important to promote EMIs as they are fast, cheap, easy, and secure.
7. How can such initiatives help attract highly skilled compliance officers from abroad as we speak on the need to enhance the visibility of the MIFC to make it a hub cum pool for AML/CFT expertise in acting as service providers to the region?
Very interesting question. As you are aware, Mauritius is world famous for its “Offshore” sector which in itself serves as an attraction point for expats. It is a matter of market demand and supply however, looking at the context in Mauritius where we are not able to meet this criterion on account of demand exceeding supply due to a lack of competent and skilled Compliance officers. By creating more product lines, licenses and making Mauritius more vibrant, it will certainly bring focus on skilled resources. However, it may not be enough to attract them to the Island. Various other factors need to be looked at in its entirety. For example, good air connectivity, medical facilities, educational institutions including higher education, financial and long-term security, etc. These are softer aspects but they have a major impact too.
8. Various reports point out at financial crime costs the global economy an average of USD 2.1 trillion annually coupled with 78 percent of compliance providers expecting regulatory information to increase by 62 percent among respondents in expecting more compliance involvement in cyber resilience together with 34 percent reported RegTech resolutions to affect compliance management. How does one address the underlying regulations in a vast and complex industry in a changing world to balance competitive and compliance pressure while meeting regulatory expectations cum anticipating future regulatory trends?
Financial crime is generally viewed as a compliance issue in terms of adhering to relevant regulations and averting regulatory fines with AML/CFT increasingly becoming an impending concern for governments around the world. Financial crime is a shared challenge to both large and small financial organizations due to its broad scope where every member of the global economy faces a challenging task in combating this threat.
The numbers you refer to are eye-openers and to make things worse these are not going to drop. Does this mean that we will keep increasing the compliance costs for all times to come? Does this mean the only purpose to be in business will be to do compliance? If world organizations do not come together to address this issue in a much simpler and more regulated way, there will be no end to it. A very farfetched thought but could still be relevant. Why can’t governments worldwide come up with a centralised KYC data bank? Each person or entity is allowed to voluntarily register and provide information centrally at one source. Each one could be given a unique ID. All financial institutions should be allowed to use this data to rely on. To create a balance between regulatory expectations and producing the desired result as a compliance officer, one must think out of the box and conduct planning well ahead of time and task.
9. From real estate and energy in Africa to investment holdings, how do you dive deep into the complexity of legal compliance in merging business challenges across continents? How would you define your average day in the vast compliance culture?
There is no hard and fast process. How to approach the Compliance duties depends on the merit and facts of each case. It entails the initial checks, nature of transactions, quantum, and complexity as well as the jurisdictions involved that will instinctively guide on how deep you need to dive in.
In a Management Company, Compliance has a huge responsibility to ensure that the organisation strictly follows the law and regulations in place pertaining to its business. How to do that? Keep your controls, policies, and procedure stark with regular monitoring and ensuring that we adhere to external regulations and internal controls.
My average day is decided by the exigencies of work on that particular day. But some of them are given, like training, screening and doing regular checks on existing clients, monitoring transactions, working on random file checks, and keeping an eye on all legislation updates and current affairs. In my opinion, Compliance is everyone’s business not just meant for the Compliance department and we inculcate the same culture at AMG.
