FATF AML Deficiency List
US Dept of State Money Laundering assessment
Non - Compliance with FATF MER Recommendations
Corruption Index (Transparency International & W.G.I.)
World Governance Indicators (Average Score)
Offshore Finance Center (Tangier)
Morocco is on the FATF List of Countries that have been identified as having strategic AML deficiencies
Latest FATF Statement - 25 June 2021
In February 2021, Morocco made a high-level political commitment to work with the FATF and MENAFATF to strengthen the effectiveness of its AML/CFT regime. Morocco should continue to work to implement its action plan to address its strategic deficiencies, including by: (1) demonstrating effective implementation of the case management system to provide timely responses and prioritisation of MLA requests in line with the country’s risk profile; (2) improving risk-based supervision and taking remedial actions and applying effective, proportionate and dissuasive sanctions for non-compliance; (3) ensuring that beneficial ownership information is adequate, accurate and verified, including information of legal persons and foreign legal arrangements; (4) increasing the diversity of STR reporting; (5) providing FIU with adequate financial and human resources to enhance analytical capabilities in order to fulfil its core mandate of operational and strategic analysis; (6) prioritising the identification, investigation and prosecution of all types of ML in accordance with the country’s risks; (7) building capacity of LEAs, prosecutors, and other relevant authorities to conduct parallel financial investigations, use financial intelligence, seize assets, and seek/provide MLA; and (8) monitoring and effectively supervising the compliance of FIs and DNFBPs with targeted financial sanctions obligations.
Compliance with FATF Recommendations
The last follow-up to the Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Morocco was undertaken in 2020. According to that Evaluation, Morocco was deemed Compliant for 4 and Largely Compliant for 21 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.
Morocco is strengthening its AML regime through legislation and capacity building. Money laundering vulnerabilities in Morocco stem from the prevalence of cash-based transactions, a high volume of remittances, international trafficking networks, public corruption, and deficient AML controls. Morocco serves as an integration point for illicit drug money into the legitimate economy, with an estimated hundreds of millions of dollars laundered through Morocco annually. Financiers of terrorism take advantage of these vulnerabilities
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 40
World Governance Indicator – Control of Corruption 46
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
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
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.
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