AML in Morocco

Morocco, situated in the Maghreb region of North Africa, shares borders with West Sahara, Algeria, the Atlantic Ocean, and the Mediterranean Sea. The capital of Morocco is Rabat, and the official language is Arabic. As of 2021, the country has a population of approximately 37.34 million, according to World Bank data. Morocco is governed by a constitutional monarchy. Due to its historical ties and geographical location, the country maintains import and export relations with several countries in the Euro area. France, either directly or through its historical colonial ties, plays a significant role in these relationships.

In terms of GDP, Morocco ranks as the fifth-largest economy in Africa. The country’s primary imports consist of energy and food products. Spain, France, Germany, the United States, and China are key trading partners for imports, while exports predominantly go to Spain, France, Italy, and India. These economic relationships and the flow of money make Morocco an attractive destination for financial criminals involved in money laundering.

In February 2022, Morocco was identified by the FATF as a country with ineffective anti-money laundering (AML) compliance, particularly in high-risk third-country jurisdictions. This designation raises concerns about money laundering and terrorist financing, posing a potential threat to the European economy. As a result, Morocco is required to collaborate with the FATF and ensure that all institutions in the country adhere to its regulations.

Morocco faces several notable challenges when it comes to anti-money laundering (AML) efforts, with the lack of comprehensive AML legislation being a prominent issue. This deficiency is evident not only in the private sector but also within governmental bodies, indicating a gap in combating money laundering according to international AML standards. As a result, the United States State Department has classified Morocco as a Country/Jurisdiction of Primary Concern. In the Basel Index 2022, Morocco’s overall risk score of 5.32 is higher than the average, placing the country in the 6th rank among MENA jurisdictions, where the average score is 5.03.

Key areas of vulnerability for financial crimes in Morocco include international trafficking, informal sectors, and high-volume transactions. Drug trafficking, particularly between Morocco and Europe, poses a significant source of money laundering. In response, the European Union has been increasing checkpoints and enforcing strict cross-border regulations to safeguard its jurisdiction.

Morocco has agreed to collaborate with the FATF (Financial Action Task Force) and MENAFATF (Middle East and North Africa Financial Action Task Force) to establish a stronger anti-money laundering system and ensure effective implementation. However, a FATF examination in 2021 identified certain deficiencies in Morocco’s AML/CTF (Counter-Terrorist Financing) regime, specifically under Article 9 of Directive (EU) 2015/849. To meet FATF standards, Morocco has committed to taking several steps, including:

  1. Implementing a risk-based approach at the national level.
  2. Establishing a robust AML regulatory system to discourage non-compliance.
  3. Enforcing legal obligations for institutions that are not in compliance.
  4. Obtaining clear beneficial ownership information for both domestic and foreign legal entities.
  5. Implementing diverse transaction reporting methods.
  6. Enhancing the description and prosecution of money laundering cases based on the risk profile.
  7. Supporting compliance efforts of Financial Institutions (FIs) and Designated Non-Financial Businesses and Professions (DNFBPs).