Morocco Tackles Anti-Money Laundering Regulations Amid FATF Concerns

Strengthening Its AML Framework to Avoid Blacklisting

Morocco has launched a series of measures to combat financial crimes and strengthen its anti-money laundering (AML) framework in response to concerns raised by the Financial Action Task Force (FATF). The country’s economic attractiveness for money laundering and terrorist financing has raised concerns among international authorities.

FATF Concerns

In February 2022, FATF identified Morocco as a country with ineffective AML compliance in high-risk third-country jurisdictions. This designation poses a significant threat to the European economy. To avoid being blacklisted by FATF, Morocco has committed to working closely with the organization to ensure that all institutions in the country apply its regulations.

Financial Intelligence Processing Unit (UTRF)

The UTRF is the authorized body responsible for AML/CFT in Morocco. Established in 2009, UTRF joined the Egmont Group of FIUs in 2011 and aims to protect countries’ economies against money laundering and terrorist financing, as well as maintain financial stability.

Report on Morocco’s AML/CTF Situation

In March 2021, UTRF published a report on the examination of Morocco’s AML/CTF situation 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. An action plan was also included, which aims to strengthen the system by collaborating with international and local authorities, conducting regular controls, and reporting suspicious activities.

Challenges in Combating Money Laundering

However, Morocco still faces several challenges in combating money laundering. The lack of comprehensive AML legislation is a major concern, with both the private sector and governmental bodies displaying gaps in fighting financial crimes according to international standards. The country’s overall risk score in the Basel Index 2022 is higher than the average at 5.32, placing it in the sixth rank among MENA jurisdictions.

Critical Areas for Financial Crimes

International trafficking, informal sectors, and high-volume transactions are critical areas that are stressed as vulnerabilities for financial crimes. Drug trafficking between Morocco and Europe is a significant source of money laundering, with the EU attempting to increase checking points and implement strict cross-border rules to protect its jurisdiction.

Addressing Concerns

To address these concerns, Morocco has agreed to work closely with FATF and MENAFATF to establish a stronger anti-money laundering system. According to the FATF examination in 2021, there were several deficiencies in Morocco’s AML/CTF regime under Article 9 of Directive (EU) 2015/849. To meet these standards, Morocco has committed to implementing a risk-based approach at the state level, establishing a disincentive AML regulatory system, enforcing legal obligations on non-compliant institutions, and determining clear beneficial ownership information.

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