Mauritius' Fight Against Illicit Funds

The case OLA ENERGY HOLDINGS LTD & ORS v THE FINANCIAL INTELLIGENCE UNIT (2023 SCJ 326) before the Supreme Court of Mauritius is a significant ruling that clarifies the scope of powers of the Financial Intelligence Unit (FIU) under the Asset Recovery Act (ARA) and its relationship with the UN Sanctions Act 2019.

The case OLA Energy Holdings Ltd & Ors v The Financial Intelligence Unit (2023 SCJ 326) is vital for several reasons in the context of Mauritian financial regulation and prevention of financial crime frameworks:

Clarification of Legislative Interplay

The ruling provides critical guidance on how the Asset Recovery Act (ARA) interacts with the United Nations (Financial Prohibitions, Arms Embargo and Travel Ban) Sanctions Act 2019 (UN Sanctions Act). The court rejected the application of the legal principle "generalia specialibus non derogant" (general provisions do not override specific ones), determining that the two laws are not in direct conflict, despite the UN Sanctions Act being enacted later. Instead:

• The ARA establishes a broad mechanism for asset recovery, empowering the Financial Intelligence Unit (FIU) as an enforcement authority (under section 9 of the Financial Intelligence and Anti-Money Laundering Act) to seize or restrict assets reasonably suspected to be proceeds of crime, benefits from criminal conduct, instrumentalities of offences, or terrorist property.
• The UN Sanctions Act focuses specifically on implementing UN Security Council resolutions to combat terrorism and proliferation financing, including asset freezes and travel bans.

This distinction ensures that the FIU can pursue asset recovery actions under the ARA without being limited by the scope of the UN Sanctions Act, allowing for parallel enforcement where applicable. It prevents potential loopholes where sanctioned entities might argue that one law supersedes the other.

Reinforcement of FIU's Authority

• The decision upholds the FIU's proactive role in investigating and restricting suspicious transactions.
• In this case, the FIU had obtained a restriction order on funds held by the applicants (companies linked to Libyan entities subject to UN sanctions) in Mauritian banks, based on reasonable suspicion of:
• Ties to terrorist property or
• Sanctioned activities.
• By dismissing the applicants' bid to rescind the order, the court affirmed that the FIU must act on such suspicions, strengthening its mandate to protect Mauritius's financial system from illicit flows.
• This is particularly relevant in an international context, as Mauritius serves as a hub for global businesses and has faced scrutiny over money laundering risks.

Broader Implications for Sanctions Enforcement and Financial Integrity:

• International Compliance: The case underscores Mauritius's commitment to UN sanctions (e.g., resolutions targeting Libyan entities like the Libyan Africa Investment Portfolio) while maintaining domestic tools for asset recovery. It sets a precedent for handling cases involving foreign-sanctioned parties operating through Mauritian entities, such as global business companies licensed by the Financial Services Commission.
• Judicial Precedent: As a Supreme Court ruling, it influences future interpretations of overlapping financial laws, promoting legal certainty for regulators, banks, and businesses. It also highlights the need for clear judicial reasoning in such matters, as seen in the related 2025 appeal (OLA Energy Holdings Ltd & Anor v The Financial Crimes Commission & Anor, 2025 SCJ 25), where inadequate motivation in the original judgment led to the matter being remitted for reconsideration under the new Financial Crimes Commission Act 2023 (which replaced parts of the ARA and FIU's role).
• Economic and Policy Impact: By clarifying regulatory powers, the ruling helps Mauritius align with global standards (e.g., FATF recommendations), potentially reducing risks of grey-listing and supporting the jurisdiction's reputation as a stable financial centre. It also demonstrates the courts' role in balancing enforcement with due process, as the applicants' challenge was ultimately set aside with costs.

In essence, this case establishes a foundational framework for distinguishing general asset recovery powers from specific sanctions regimes, ensuring effective enforcement without legislative overlap.

This has lasting value for legal practitioners, financial institutions, and policymakers involved in addressing cross-border financial crimes.

Key Legal Issue:

The Applicants (Ola Energy Holdings Ltd and others) challenged a Restriction Order issued by the FIU under Section 27 of the Asset Recovery Act, arguing that:

• The FIU had misapplied the ARA.
• The matter should have been dealt with under the UN Sanctions Act, specifically Section 26, which governs freezing orders for designated parties.
• The FIU had usurped powers meant for the National Sanctions Committee (NSC) under the UN Sanctions framework.

They invoked the legal principle of “generalia specialibus non derogant”, which means general laws do not override specific laws.

Court’s Determination:

The Court rejected the application and held:

1. No Conflict Between the Two Laws:

• The UN Sanctions Act and the Asset Recovery Act are not in conflict.
• Each has its own specificity and purpose:
• UN Sanctions Act: Implements UN Security Council Resolutions to combat terrorism and related threats.
• Asset Recovery Act: Provides a domestic legal framework for recovering assets believed to be proceeds of crime or terrorist property.

2. FIU’s Powers Under the ARA Are Valid:

• The FIU, as the Enforcement Authority under Section 9 of FIAMLA, is empowered to act under the ARA.
• The FIU can apply for a Restriction Order if it reasonably believes property is:
• Proceeds
• A benefit
• An instrumentality
• Or terrorist property

3. Generalia Specialibus Non Derogant Does Not Apply:

• The principle applies only when there is a direct conflict between laws.
• The Court found no such conflict; both laws operate in parallel, not in contradiction.

Outcome:

• The application to rescind the Restriction Order was dismissed with costs.
• The Court affirmed the FIU’s authority to act under the ARA, even in cases involving entities linked to UN sanctions, without needing to rely solely on the UN Sanctions Act.

Implications:

• The ruling reinforces the FIU’s autonomy in asset recovery actions.
• It confirms that sanctions enforcement and asset recovery can proceed independently, even if the entities involved are not formally designated under UN sanctions.
• It sets a precedent for dual-track enforcement: one via international sanctions, and another via domestic asset recovery mechanisms.

OLA ENERGY HOLDINGS LTD & ORS v THE FINANCIAL INTELLIGENCE UNIT

Upon application for rescission of the Restriction Order, the Court held that the principle of ‘’generalia specialibus non derogant’’ does not apply. Even if the UN Sanctions were enacted after the Asset Recovery Act, the two legislations are not in direct conflict, as each has its own specificity. While the UN Sanctions Act enables the Government of Mauritius to combat terrorism and related offences, the ARA provides for an asset recovery framework, establishing a legal mechanism for the recovery of assets by the enforcement authority as established by Section 9 of the FIAMLA. As empowered by the Asset Recovery Act, the FIU should take necessary actions as it deems fit against transactions which is reasonably believed to be recoverable under the Asset Recovery Act to be proceeds, a benefit or an instrumentality or terrorist property.

The application was set aside with costs.

Ola Energy Holdings Ltd ors v Financial Intelligence Unit

• https://www.fiumauritius.org/fiu/wp-content/uploads/2023/09/ola-energy-holdings-ltd-ors-v-financial-intelligence-unit-2023-scj-326-1.pdf
• https://www.fiumauritius.org/fiu/?p=4242