Morocco

Sanctions

No

FATF AML Deficient List

No

Higher Risk

US Dept of State Money Laundering assessment
Non - Compliance with FATF 40 Recommendations
Not on EU White list equivalent jurisdictions

Medium Risk

Corruption Index (Transparency International & W.G.I.)
World Governance Indicators (Average Score)
Failed States Index (Political Issues)(Average Score)
Offshore Finance Centre

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ANTI-MONEY LAUNDERING

 

FATF Status

 

Morocco is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies

 

Latest FATF Statement -  18 October 2013

The FATF welcomes Morocco’s significant progress in improving its AML/CFT regime and notes that Morocco has established the legal and regulatory framework to meet its commitments in its Action Plan regarding the strategic deficiencies that the FATF had identified in February 2010. Morocco is therefore no longer subject to FATF’s monitoring process under its on-going global AML/CFT compliance process. Morocco will work with MENAFATF as it continues to address the full range of AML/CFT issues identified in its Mutual Evaluation Report.

 

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Morocco was undertaken in 2019. According to that Evaluation, Morocco was deemed Compliant for 2 and Largely Compliant for 10 of the FATF 40 Recommendations. It was also deemed Highly Effective for 0 and Substantially Effective for 1 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

 

US Department of State Money Laundering assessment (INCSR)

Morocco is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.

 

OVERVIEW

Morocco continues to strengthen its AML regime, making strides in risk management, information sharing, and streamlining implementation.  Morocco’s 2016 AML/CFT national risk assessment (NRA), though limited in scope, incorporated all reporting entities and is expected to lead to the development of a national AML strategy. 

 

Money laundering vulnerabilities in Morocco stem from a large informal sector, the prevalence of cash-based transactions, a high volume of remittances, and international trafficking networks.  Morocco is an integration point for illicit drug money into the legitimate economy, with hundreds of millions of euros laundered through Morocco yearly.  Although exact figures are unavailable, a large percentage of this money is believed to be linked to the hashish trade.

 

 

 

 

SANCTIONS

There are no international sanctions currently in force against this country.

 

The Arab League (comprising 22 Arab member states), of which this country is a member, has approved imposing sanctions on Syria. These include: -

 

  • Cutting off transactions with the Syrian central bank

  • Halting funding by Arab governments for projects in Syria

  • A ban on senior Syrian officials travelling to other Arab countries

  • A freeze on assets related to President Bashar al-Assad's government

 

The declaration also calls on Arab central banks to monitor transfers to Syria, with the exception of remittances from Syrians abroad.

 

The Arab League has also boycotted Israel in a systematic effort to isolate Israel economically in support of the Palestinians, however, the implementation of the boycott has varied over time among member states. There are three tiers to the boycott. The primary boycott prohibits the importation of Israeli-origin goods and services into boycotting countries. The secondary boycott prohibits individuals, as well as private and public sector firms and organizations, in member countries from engaging in business with any entity that does business in Israel. The Arab League maintains a blacklist of such firms. The tertiary boycott prohibits any entity in a member country from doing business with a company or individual that has business dealings with U.S. or other firms on the Arab League blacklist.

 

BRIBERY & CORRUPTION

 

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           43

World Governance Indicator – Control of Corruption             53

Corruption represents a problem for businesses in Morocco. Almost all sectors suffer from rampant corruption. Cultures of patronage, nepotism and wasta (the use of connections) exist, and inefficient government bureaucracy and excessive red tape deter investors. The legal framework concerning corruption, transparency and integrity is in place, and the regulatory system is becoming increasingly transparent. Under the Moroccan Criminal Code, active and passive bribery, extortion, influence peddling and abuse of office are illegal. Anti-corruption laws are reportedly not enforced effectively by the government. Prosecutions of corruption cases have been accused of targeting only petty corruption, and, allegedly, companies owned by highly influential persons are rarely disciplined. Facilitation payments and giving and receiving gifts are criminalized under Moroccan law, but businesses indicate the likelihood of encountering these practices is high. For further information - GAN Integrity Business Anti-Corruption Portal

 

ECONOMY

Morocco has capitalized on its proximity to Europe and relatively low labour costs to work towards building a diverse, open, market-oriented economy. Key sectors of the economy include agriculture, tourism, aerospace, automotive, phosphates, textiles, apparel, and subcomponents. Morocco has increased investment in its port, transportation, and industrial infrastructure to position itself as a centre and broker for business throughout Africa. Industrial development strategies and infrastructure improvements - most visibly illustrated by a new port and free trade zone near Tangier - are improving Morocco's competitiveness.

 

In the 1980s, Morocco was a heavily indebted country before pursuing austerity measures and pro-market reforms, overseen by the IMF. Since taking the throne in 1999, King MOHAMMED VI has presided over a stable economy marked by steady growth, low inflation, and gradually falling unemployment, although poor harvests and economic difficulties in Europe contributed to an economic slowdown. To boost exports, Morocco entered into a bilateral Free Trade Agreement with the US in 2006 and an Advanced Status agreement with the EU in 2008. In late 2014, Morocco eliminated subsidies for gasoline, diesel, and fuel oil, dramatically reducing outlays that weighted on the country’s budget and current account. Subsidies on butane gas and certain food products remain in place. Morocco also seeks to expand its renewable energy capacity with a goal of making renewable more than 50% of installed electricity generation capacity by 2030.

 

Despite Morocco's economic progress, the country suffers from high unemployment, poverty, and illiteracy, particularly in rural areas. Key economic challenges for Morocco include reforming the education system and the judiciary.

 

Agriculture - products:

barley, wheat, citrus fruits, grapes, vegetables, olives; livestock; wine

 

Industries:

automotive parts, phosphate mining and processing, aerospace, food processing, leather goods, textiles, construction, energy, tourism

 

Exports - commodities:

clothing and textiles, automobiles, electric components, inorganic chemicals, transistors, crude minerals, fertilizers (including phosphates), petroleum products, citrus fruits, vegetables, fish

 

Exports - partners:

Spain 22.1%, France 19.7%, India 4.9%, US 4.3%, Italy 4.3% (2015)

 

Imports - commodities:

crude petroleum, textile fabric, telecommunications equipment, wheat, gas and electricity, transistors, plastics

 

Imports - partners:

Spain 13.9%, France 12.4%, China 8.5%, US 6.5%, Germany 5.8%, Italy 5.5%, Russia 4.4%, Turkey 4.3% (2015)

 

Investment Climate  -  US State Department

Despite global economic uncertainty and slowed capital inflows into North Africa following the Arab Spring, the Moroccan government is making great strides in attracting foreign direct investment (FDI). It actively encourages and facilitates foreign investment through macro-economic policies, trade liberalization, and structural reforms. Further, due to its political stability, solid infrastructure, and strategic location, Morocco is becoming a regional manufacturing and export base for international companies. Morocco’s overarching economic development plan seeks to leverage its unique status as a multilingual nation with a tri-regional focus (toward Sub-Saharan Africa, Middle East, and Europe) to transform the country into a regional hub for shipping, logistics, finance, manufacturing, assembly, and sales.

 

The Government of Morocco has implemented a series of strategies aimed at raising performance and output in key revenue-earning sectors, boosting employment, and attracting foreign investment. An ambitious 2014 strategy set out to create 500,000 new jobs in manufacturing by 2020 by targeting higher levels of FDI and strengthening the linkages between the small business sector and Morocco’s industrial leaders. Morocco has also focused on positioning itself as a financial hub for Africa, and offers incentives for firms that locate their regional headquarters in the Casablanca Finance City (CFC), Morocco’s flagship financial and business center launched in 2010 by King Mohammed VI.

Morocco has ratified 63 bilateral investment treaties for the promotion and protection of investments and 51 agreements that aim to eliminate the double taxation of income or gains, including with the United States and most EU nations. Its Investment Charter has put in place a convertibility system for foreign investors and gives investors the freedom to transfer profits. Morocco’s Free Trade Agreement (FTA) with the United States entered into force in 2006, immediately eliminating tariffs on more than 95 percent of qualifying consumer and industrial goods. For a limited number of products, tariffs will be phased out through 2024. Since the United States-Morocco FTA came into effect, overall bilateral trade has increased by more than 300 percent, and the United States is now Morocco’s third largest trading partner. In September 2012, the U.S. and Morocco launched a Strategic Dialogue, annual high-level consultations that promote mutual priorities including efforts to increase trade and investment. Further, the annual U.S.-Morocco Business Development Conference (BDC) provides a platform to strengthen business-to-business ties.

 

Despite significant progress in its business and economic environment, Morocco continues to face limitations posed by its lack of skilled labor, spotty intellectual property rights protection, inconsistently enforced anti-corruption laws, and limited regulatory transparency. According to the World Economic Forum’s Global Competitiveness Report 2014-2015 (http://reports.weforum.org/global-competitiveness-report-2014-2015/), the surveyed companies cite limited access to financing as the most problematic factor for doing business in Morocco, followed by inefficient government bureaucracy, and inadequately educated workforce. Nevertheless, multinational companies cite Morocco’s security and stability as positive factors contributing to the country’s appeal as a base for their regional activities.

 

 

 

Country Links
Financial Information Processing Unit (UTRF)
AMMC : L'Autorité Marocaine du Marché des Capitaux
Central Bank of Morocco
Other Useful Links
FATF
US State Department
Transparency International
World Bank
CIA World Factbook

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