DTAA Renegotiation

Tit-bits

Are we back to square one as far as renegotiation of the DTAA is concerned? One might be tempted to conclude that such is the case following the attendance by SAJ and his delegation at the gathering of African leaders at the New Delhi summit held last week. It transpires that PM Modi has acceded to SAJ’s request that the renegotiation that was widely reported by local Senior Ministers, MBC and Government Information Service to have been successfully and satisfactorily concluded five months ago by our joint ministerial working groups, can and will be re-opened.

There could obviously be neither time-frame, nor guarantee of a satisfactory outcome for the upcoming renegotiations by, one assumes, the same ministerial and technical joint working groups that signed off the agreement reached five months ago. Nevertheless, it may be a late-in-coming sigh of relief for our financial and offshore services sector, badly shaken by changes that had been agreed in June. Collectively, over the past ten years or more, despite intense commitment of past portfolio Ministers, we have failed to stem or respond effectively to the increasing perception by powerful Indian bureaucracy that Mauritius is a “round-tripping” route for investors from India back into India while benefiting from Indian tax avoidance.

By focusing primarily on the political level of India-Mauritius relations to resolve matters in contention, psychologically tuned to our own State functionings and dysfunctionings, we tend to forget that India is a vibrant democracy where politicians can’t simply impose their will and whims on a compliant civil service. Have we spent enough long-term effort to address the negative perceptions of Mauritius Inc and its low-tax financial jurisdiction (as significantly different from a tax-haven!) by higher rungs of the powerful Indian Administrative Services, more particularly the Finance, Interior, Defence and Foreign policy career top-guns? Are we considered really as an “all-weather” ally, that is, intimately aware of PM Modi’s emerging strategic priorities for Indian foreign policy and economic development thrusts and their implications for us, beyond lip-service to traditional ties? Should we more generally reflect on how to gear up our strategic image building capacities overseas in a fiercely competitive world where other players will be too happy to transform our losses into their gain?

We note that neither the Finance, nor the Financial services nor even the Foreign Affairs Ministers, nor their seniormost Chief Executives, were part of the official delegation where they could have usefully got new insights into the vexatious DTAA issues and brought their combined image-building weight to bear in and around the corridors of the Summit with the highest echelons of Indian ministries. That is probably the most useful part of an official delegation’s work at such important Summits. Observers and operators will nevertheless hope and pray that the new Mauritian ministerial and technical working group that will take up the challenge of the promised renegotiation will take the opportunity to get fully briefed regarding the realities of the financial services sector and take useful advice regarding possible concessionary measures that might satisfy top Indian Finance bureaucrats without putting in jeopardy ten per cent of the national economy.

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Constitutional Amendment

We have for long nurtured the idea that democracy should enshrine the rule of law, the protection of fundamental rights of citizens against abuse, the presumption that everybody is innocent until proven guilty by a court of law, even if that entails patience for due appeal processes, and the strict separation of the Legislature, Executive and Judiciary.

In most countries, it is enshrined by a Constitution that lays down strict conditions under which, for major justified reasons, some departure from those stringent requirements could be alleviated, say, in the fight against terrorism, corruption of public officials or organised crime. However, even in cases like Australia, Ireland and Italy, where laws of exception have been passed against illicit wealth or standard of life, the need to safeguard constitutional rights of citizens has remained a high feature of new laws.

Government’s proposals to introduce a bill and a constitutional amendment purporting to fight illicit wealth, by granting quasi-criminal powers to ministerial agents, by-passing constitutional and judiciary safeguards normal in a democratic state, by-passing the need for any legal condemnation prior to execution, are raising a justified row for a long list of constitutional, legal and institutional reasons.

The mere fact that by virtue of such a proposed double enactment, a Minister, whoever he might be today or tomorrow, (or his appointed boys) can, for any expeditious “Inquisition”, call to account any member of the judiciary, from the Chief Justice to any other judicial officer, any Magistrate of District Courts, the Ombudsman, the Director of Audit, the Director of FIU, Director General of ICAC, Director of Mauritius Post Authority, to report to the Minister, should be scary enough to raise every alarm bell.

There is a considerable armoury of institutions with varying powers to chase, charge, condemn and eventually confiscate property acquired by some form of financial fraud, “malfaisance” or delinquency. Common sense would suggest a comprehensive review of existing instruments and a panoply of additional powers or amendments, where advisable and necessary, to strengthen the ability to bring illicit wealth acquisition to task. Through due process of law, onus of proof resting on prosecution, rather than by making all Mauritians indistinctly guilty by default, by the stroke of a pen, until such time as they prove themselves innocent to some Minister.

The idea of harbouring, nurturing and encouraging a whole army of anonymous “délateurs” against possible reward, may indulge our lower instincts but cannot tally with everybody’s concept of a civilised society we want to live in. Cutting off the nose to spite the face never seemed a rational behaviour!

We have to wait and see whether common sense prevails and proper consultations are held with all concerned citizens, the NGOs and human right associations, civil society and political parties for more acceptable ways to improve the fight against fraudulent practices leading to illicit wealth acquisition. Without tearing apart the essential fabric of a democratic society.

• Published in print edition on 6 November 2015