Financial Crime World

Morocco’s Financial Crime Epidemic: A Growing Concern

Corruption Perception Index Reveals Vulnerabilities

In its 2022 Corruption Perception Index, Transparency International ranked Morocco a dismal 94th out of 180 countries globally, highlighting the country’s vulnerability to systematic corruption. The judicial system, police, public services, and other sectors are particularly susceptible to bribery and nepotism.

Financial Sector at Risk

The financial sector is not immune to this corruption, with money laundering (ML) being a major concern. According to the Basel AML Index, Morocco was the 64th worst performing country out of 128 in terms of anti-money laundering measures, citing:

  • Cash-based transactions
  • Geographic location
  • Established trafficking networks
  • High levels of public corruption

Informal Economy and Hawala System Exacerbate Risk

Morocco’s large informal economy and reliance on the hawala system have also heightened the risk of ML. The country has been a significant transit and destination point for European organized criminal groups seeking to launder proceeds.

FATF Grey List and Improved National Response

Despite efforts to improve its anti-money laundering regime, Morocco was placed on the Financial Action Task Force’s (FATF) “grey list” in 2022 due to persistent rule-of-law challenges and corruption. However, an improved national response led to a re-rating in 2023, and Morocco was removed from the grey list.

Cybercrime: A Growing Concern

Cybercrime is also a significant concern in Morocco, with the country experiencing the fastest growth of internet usage in the MENA region. Fraud and extortion attempts via:

  • Malware
  • Ransomware
  • Denial-of-service attacks
  • Social engineering
  • Impersonations

are prevalent forms of cybercrime.

Human Trafficking: A Serious Issue

Morocco is also exposed to human trafficking, with law enforcement authorities investigating numerous cases in recent years. The US State Department has highlighted:

  • Oujda on the Algerian border and northern coastal cities as trafficking hotspots
  • The prevalence of Cameroonian and Nigerian sex trafficking networks in Morocco

Drug Trafficking and Small Arms Proliferation

In addition to these financial crimes, Morocco is also grappling with drug trafficking and small arms proliferation. The country is a significant source country for hashish and cannabis, which is trafficked into Europe through Spain, while terrorist financing poses a growing threat.

Call to Action: Addressing Financial Crime Risks

The Moroccan government has acknowledged the need to address these financial crime risks, but more needs to be done to combat corruption and improve transparency in the financial sector. As one of the most vulnerable countries in the region, Morocco must prioritize reform to prevent further erosion of its economic stability.