MOROCCO: HOW BANKS PREVENT FRAUD IN THE NORTH AFRICAN COUNTRY
Morocco, located in North Africa’s Maghreb region, is a significant player in the African economy with a population of 37.34 million people and a ranking as the fifth largest economy on the continent. The country has historical ties with France and the Euro area, making it an attractive hub for financial criminals.
Financial Action Task Force (FATF) Identification
In February 2022, the Financial Action Task Force (FATF) identified Morocco as a high-risk third-country jurisdiction with ineffective anti-money laundering (AML) compliance. This poses a threat to the European economy and requires collaboration with FATF to ensure that all institutions in the country apply its regulations.
Authorized Body for AML/CFT
The authorized body for AML/CFT in Morocco is the Financial Intelligence Processing Unit (UTRF), established in 2009 and joined the Egmont Group of FIUs in 2011. UTRF’s primary goal is to protect countries’ economies against money laundering and terrorist financing, and set financial stability.
Report on AML/CTF Condition
In March 2021, UTRF published a report on the examination of Morocco’s AML/CTF condition and efforts to combat them. The report highlighted developments in the country’s AML framework and committed to improving its regime according to international standards.
Challenges in Combating Money Laundering
However, the lack of comprehensive AML legislation remains a significant problem in Morocco, with both the private sector and governmental bodies displaying gaps in fighting money laundering according to international AML standards. Morocco is classified as a Country/Jurisdiction of Primary Concern by the US State Department and has an overall risk score of 5.32 in the Basel Index 2022.
Vulnerabilities for Financial Crimes
International trafficking, informal sectors, and high-volume transactions are critical areas that are stressed as vulnerabilities for financial crimes, particularly drug trafficking between Morocco and Europe. To address these issues, EU countries have implemented stricter cross-border rules to protect their jurisdictions.
Steps to Strengthen Anti-Money Laundering System
Morocco has agreed with FATF and MENAFATF to strengthen its anti-money laundering system and collaborate with them to implement it effectively. The country is committed to several steps to meet FATF’s standards, including:
- Implementing a risk-based approach at the state level
- Establishing a disincentive AML regulatory system
- Enforcing legal obligations on non-compliant institutions
Advanced AI-Driven AML Solutions
Sanction Scanner offers advanced AI-driven AML solutions for Moroccan organizations, enabling them to comply with AML requirements successfully. The company provides a solution to keep up with AML compliance and protect financial integrity, allowing Moroccan entities to join the global fight against money laundering and terrorist financing.
References
- [1] Financial Action Task Force (FATF). (2022). Morocco’s AML/CFT System.
- [2] US State Department. (2022). Country Reports on Terrorism 2021.
- [3] Basel Index. (2022). Morocco: Risk Score.