Money Laundering Reporting Officer (MLRO)

Definition

The Money Laundering Reporting Officer (MLRO) is the individual designated, within a financial institution or a licensed company, to receive internal suspicious transaction reports, assess their relevance and, where appropriate, forward them to the authority competent in matters of combating money laundering and terrorist financing. They are the identified point of contact between the entity and the regulator on anti-money-laundering compliance matters. This function is generally accompanied by a deputy MLRO, tasked with ensuring continuity of vigilance in the holder's absence.

Framework in Mauritius

In Mauritius, the appointment of an MLRO forms part of the anti-money-laundering legal framework applicable to financial institutions and regulated entities. The Financial Services Commission (FSC), the regulator of non-bank financial services, oversees compliance with these obligations by licensed management companies and the structures they administer. This framework has been strengthened since Mauritius left, in October 2021, the FATF grey list and, in January 2022, the EU list of high-risk third countries: two milestones that reinforced the vigilance and reporting requirements the MLRO function addresses.

In practice

A management company licensed by the FSC generally appoints an MLRO from among its qualified staff to perform this function independently and on an ongoing basis. The MLRO receives internal alerts arising from know-your-customer procedures, assesses whether they are suspicious and decides whether to forward them to the authorities. They may also be involved in raising staff awareness of, and training staff in, vigilance obligations. They also take part in updating internal compliance policies and act as a reference point during regulatory inspections. Their effective appointment, competence and independence are points of attention examined by the regulator; the nominal existence of an MLRO is not sufficient if the function is not genuinely and demonstrably carried out within the structure.

Related terms

The MLRO function is linked to Know Your Customer (KYC) procedures, which feed the detection of suspicious transactions, as well as to the broader anti-money-laundering (AML) framework. It is also linked to the role of the Management Company, which oversees compliance of the structures it administers, and to the supervision exercised by the Financial Services Commission (FSC).

Related terms