About the Country
Morocco is located in North Africa’s Maghreb region, with borders to West Sahara, Algeria, the Atlantic Ocean, and the Mediterranean Sea. Its capital is Rabat, its official language is Arabic, and it has 37.34 million population according to World Banks' data in 2021. It is ruled by a constitutional monarchy. The country has importation and exportation relations with most of the Euro area thanks to its historical bounds and location. The relationship is mainly with France or through France as an old colonial territory.
According to GDP numbers, it has the 5th biggest economy in Africa. Its main importation goods are energy and food. Its importation generally depends on Spain, France, Germany, the US, and China, while the exportation depends on Spain, France, Italy, and India. Economic relationships and the wire of money makes the country attractive for laundering in the eyes of financial criminals.
Morocco was pointed out as a country with ineffective AML compliance in high-risk third-country jurisdictions by FATF in February 2022. It is seen as a threat to the European economy in terms of money laundering and terrorist financing. As a result, the state was obliged to commit a collaboration with FATF and ensure all institutions of the country imply its regulations.
In Morocco, the authorized body for AML/CFT is the Financial Intelligence Processing Unit (UTRF). It was established in 2009 and joined the global Egmont Group of FIUs in 2011. The primary goal of UTRF is to protect countries’ economy against money laundering and terrorist financing and set financial stability. It is responsible for supporting lawyers and prosecutions about suspicious activities detected by financial organizations.
In March 2021, the institution published a report on the examination of the AML/CTF condition of Morocco and the Kingdom’s efforts to combat them. UTRF mentioned the developments of the AML framework of the country and commit improving its regime according to international standards. In this respect, the report included an action plan which aims to
- Strengthen its system
- Collaboration with international and local authorities
- Regular controls
Overview of Morocco AML Situation
The lack of comprehensive AML legislation is the first noticeable problem in Morocco. In conclusion, not only the private sector but also governmental bodies display a gap in fighting money laundering according to international AML standards. It is classified as a Country/Jurisdiction of Primary Concern by US State Department. Its overall risk score in Basel Index 2022 is higher than the average at 5.32, which puts the country in the 6th rank in the Jurisdiction of MENA (average score is 5.03).
International trafficking, informal sectors, and high-volume transactions are critical areas that are stressed as vulnerabilities for financial crimes. Especially drug trafficking between the country and Europe is a severe source of money laundering. EU tries to increase checking points and have strict cross-border rules to protect its jurisdiction.
The country agreed with FATF and MENAFATF to have a stronger anti-money laundering system and collaborate with them to implement it effectively. According to the FATF examination in 2021, there were some deficiencies in its AML/CTF regime under Article 9 of Directive (EU) 2015/849. To meet its standards, Morocco committed to several steps;
- Implementation of a risk-based approach at the state level
- Establishment of a disincentive AML regulatory system
- Enforcement of legal obligations to non-compliant institutions
- Determination of clear beneficial ownership information to describe local and foreign legal persons, entities
- Having a diversified transaction reporting
- Regarding its risk profile, describing and litigation of money laundering cases
- Supporting compliance of Financial Institutions (FIs) and Designated Non-Financial Businesses and Professions (DNFBPs)
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