BUSINESS: Budget measures become effective

The Finance Bill has been voted in Parliament this week. The main purpose of the Finance Bill is to give legal effect to measures announced in the Budget Speech and its annex and for matters connected, consequential or incidental thereto. The Finance (Miscellaneous Provisions) Bill brings amendments to 58 enactments. News on Sunday highlights the main amendments. 

Bank of Mauritius Act

• to grant the Bank of Mauritius authority to regulate and supervise ultimate and intermediate financial holding companies that have at least one subsidiary that is a bank or a non-bank deposit-taking institution; 
• to allow the Bank of Mauritius to grant advances to financial institutions and such other entities only against securities issued by Government or the Bank of Mauritius instead of “against such security as the Board may determine”; 
• to provide for new families of currency notes and coins to be issued after the concurrence of, instead of consultation with, the Minister of Finance; and
• a new  section 50A is being added for the Central Bank to issue Rules without the need for prior approval of the Minister and these shall be published in the Gazette;

Banking Act

• to remove “investment banking business” from the definition of “bank” so that only the Financial Services Commission regulates that business with a view to preventing regulatory arbitrage;
• to add a definition of private banking business and cater for private banking business; 
• to add a new section 3(8) for the provisions of the Banking Act to prevail in the event of any conflict or inconsistency with provisions of other laws, other than sections 110A and 110B of the Insurance Act;
• to provide for subsidiaries of financial institutions incorporated outside Mauritius to submit to the BoM, within one month after publication, a copy of their audited annual consolidated financial statements with a view to facilitating consolidated supervision;
• to allow for the Central Bank to carry out an independent valuation of the assets which a bank holds as collateral;
• to provide for a Receiver to discontinue the operations of a bank which has been placed into receivership instead of continuing its operations; However, the Central Bank can still appoint a conservator to continue the operations of the bank;  
• to add a new section 79A to enable a simplified licensing procedure for a temporary financial institution to take over the assets and liabilities of a financial institution which has been put into receivership by the Bank of Mauritius; and
• to make it mandatory for banks to rotate audit firms instead of its partners every 5 years.

Financial Reporting Act   

To make it mandatory for audit firm for companies listed on the stock exchange to rotate every 7 years. 

Building Control Act

• To extend the definition of “principal agent” to also include firms of architects or engineers registered under the Construction and Industry Development Board Act. 
• To make provision for plans and drawings that support an application for permit with respect to a proposed construction work to be submitted electronically or such other technological means; and
• To reduce the time frame for the issue of a compliance certificate by a local authority from 10 to 5 working days from the date of application. 

Business Registration Act

To provide for the Registrar of Companies to be able to issue business registration card electronically; 

Central Electricity Board Act  

To provide for the setting up of companies.  These companies shall be exempted from the Public Procurement Act and their shareholdings will be opened to small investors. To simplify the procedures for approving applications by small and medium scale electricity producers generating less than   2 MW of electricity from renewable sources. 

Civil Aviation Act

To stop crediting the proceeds of the Passenger Solidarity Fee on airline tickets to UNITAID and credit to the Consolidated Fund instead.

Code Civil Mauricien

To bring clarification to the application of Article 2202-6 of the Code Civil Mauricien regarding capitalisation of interest. Henceforth, this Article will be subject to Article 1154 which does not allow the capitalisation of interests which are due for less than a year. 

Companies Act

• to provide for the appointment of an administrator instead of a liquidator in the event of winding up a limited life company; 
• for the Registrar of Companies to remove a company from the Register where an objection lodged before 1stJuly 2009 has not been withdrawn; and
• to allow for a process where undisposed funds available when companies are being removed from the Register to be vested in a Companies Special Deposit Account or the Curator of Vacant Estates as the case may be.

Customs Act, Customs Tariff Act and Excise Act

To implement the measures announced in the Budget Speech and its Annex relating to customs and excise, including 

• empowering Customs to suspend the clearance of goods suspected to be counterfeit for a maximum of 21 days instead of 3 days, in the context of the fight against counterfeit trade;
• harmonising the procedure for compounding of customs offences with that obtaining under other revenue laws; and
• allowing the heirs of a deceased owner of a duty free motor vehicle not to become liable to pay the remaining proportionate excise duties, provided that the vehicle is not disposed of within the duty liability period. 

Financial Services Act

To further diversify and consolidate the financial services sector, a new Part XA is also being added to the Financial Services Act to provide for an umbrella licence for investment banking. 

New sections are being added to the Financial Services Act to allow the Financial Services Commission to issue a new Global Legal Advisory Services Licence to cater for flagship international law firms to set up offices and operations in Mauritius. 

To allow Global Business Companies category 2 to invest in listed companies on the stock exchange and to empower the FSC to set up a standardised centralised online KYC database for the non-bank financial services sector. 

Hire Purchase and Credit Sale Act 

To make it clear that interests cannot be charged on any amount that has been prepaid.