Morocco’s Money Laundering Concerns: A Hub in the Making?
Located in North Africa’s Maghreb region, Morocco has emerged as a hub for money laundering techniques due to its strategic location and historical ties with European nations. With an economy ranking fifth largest in Africa, the country heavily relies on imports from Spain, France, Germany, the US, and China, making it an attractive destination for criminals seeking to launder funds.
FATF Classification
In February 2022, the Financial Action Task Force (FATF) classified Morocco as a country with ineffective anti-money laundering (AML) compliance in high-risk third-country jurisdictions. This assessment prompted the Moroccan government to commit to collaborating with FATF and ensuring that all institutions apply AML regulations.
UTRF: The Authorized Body
The Financial Intelligence Processing Unit (UTRF), established in 2009, is the authorized body responsible for AML/Combating the Financing of Terrorism (CFT) in Morocco. The unit’s primary goal is to protect the country’s economy against money laundering and terrorist financing, as well as ensure financial stability.
Challenges Facing Morocco’s AML/CFT Regime
In its latest report, UTRF highlighted several challenges facing Morocco’s AML/CFT regime, including:
- Lack of comprehensive AML legislation
- Inadequate reporting mechanisms
- Areas of vulnerability such as international trafficking, informal sectors, and high-volume transactions
Risk Score in the Basel Index 2022
Morocco’s risk score in the Basel Index 2022 is higher than the average at 5.32, putting it in sixth place among jurisdictions in the Middle East and North Africa (MENA) region. This score is a result of various factors, including drug trafficking between Morocco and Europe, which is a significant source of money laundering.
Efforts to Strengthen AML/CFT Regime
To address these challenges, Morocco has committed to implementing several measures to strengthen its AML/CFT regime, including:
- Implementation of a risk-based approach at the national level
- Establishment of a disincentive AML regulatory system
- Enforcement of legal obligations on non-compliant institutions
- Determination of clear beneficial ownership information
Importance of Compliance
Despite these efforts, Morocco’s economy remains vulnerable to money laundering, making it essential for organizations to implement strict compliance measures. Sanction Scanner offers advanced AI-driven AML solutions designed specifically for Moroccan organizations, enabling them to successfully comply with AML requirements and protect their financial integrity.
References
- Financial Action Task Force (FATF)
- Basel Index 2022
- UTRF Reports