“The announcement is credit positive for local banks and the broader domestic financial system because it will reduce the reputational risk stemming from increased levels of monitoring by the FATF, and support confidence and trust in Morocco’s financial system”, the American company said in a note commenting FATF’s decision.
The decision is also expected to smooth the banks’ relationships with international correspondent banks, clearing houses and investors by reducing the risk of delays in clearing and settlement for cross-border payments and receipt transactions, and supporting capital inflows to the country, stating that Moroccan banks will continue to maintain sound efficiency ratios.
Attijariwafa bank, Groupe Banque Centrale Populaire, Bank of Africa – BMCE Group and Credit du Maroc had a sound cost-to-income ratio of 48% in the first half of 2022, the company indicates, adding that Moroccan banks benefit from a solid and strengthening regulatory framework, while large domestic banks have sophisticated risk management practices.
Morocco has strengthened its legal and regulatory framework to combat money laundering and terrorism financing since it was added to the list, it said, recalling that in June 2021, the authorities published Law No. 12-18 relating to combating money laundering. The law strengthened the national system for implementing targeted financial sanctions by creating a national commission in charge of applying penalties; reinforced surveillance measures according to a risk-based approach; created a register of beneficial owners; enhanced the monetary and disciplinary sanctions regime; and expanded the list of infractions and increased the financial penalties applicable to individuals found guilty of money laundering.
The authorities have also created a national financial intelligence authority whose remit includes proposing legislative, regulatory or administrative reforms to combat money laundering and terrorism financing, according to the company.
Bank Al-Maghrib, Morocco’s central bank, helped to develop Law No. 12-18 and its related implementation texts, and has intensified training and awareness-raising initiatives through workshops for the staff of financial institutions’ compliance units, Moody’s underlined, recalling that in 2021, the bank conducted several on-site control missions at financial institutions, focused mainly on assessing the compliance and effectiveness of systems in place to combat money laundering and the financing of terrorism.
In 2022, the Moroccan capital markets authority published a circular bringing together the obligations related to combating money laundering and terrorism financing that are incumbent upon the persons subject to the authority’s control, in light of the new legislative and regulatory provisions, it indicated, adding that the authority also updated its guide to combating money laundering and terrorism financing.
