AML: PROSPECTS FOR PARLIAMENTARY PASSAGE

UNCLAS RABAT 000356

SIPDIS

SENSITIVE
SIPDIS

STATE FOR NEA/MAG, S/CT, EB, AND INL

E.O. 12958: N/A
TAGS: EFIN PTER PGOV MO
SUBJECT: AML: PROSPECTS FOR PARLIAMENTARY PASSAGE


(U) This message is sensitive but unclassified. Please
protect accordingly.


1. (SBU) Summary: Although the controversial draft bill has
been languishing in interministerial vetting for three years,
Government of Morocco (GOM) officials say the government will
push through parliament new anti-money laundering (AML)
legislation this spring. Citing a full legislative agenda
and lack of proper political preparation, opposition
parliamentarians are doubtful an AML law will be passed.
Increasingly, signs are pointing to a government campaign to
introduce into parliament the overdue AML bill in the
foreseeable future. However, it is not unusual for sensitive
or controversial legislation -- like AML -- to experience
delays. End summary.


2. (SBU) GOM officials confidently tell econoffs that a
draft anti-money laundering bill that has been languishing in
interministerial vetting for more than three years will be
introduced into and passed by parliament this Spring. The
draft legislation, the key missing piece for Morocco's
counter-terrorism finance legal framework, will establish a
financial intelligence unit, provide new powers for freezing
and seizing assets, and will require financial institutions
to report suspect transactions. Unsurprisingly, in a country
where the informal sector accounts for an estimated 40
percent of employment and employment and where the
politically volatile northern regions depend on the lucrative
hash trade for their livelihood, the bill has proven
controversial and unpopular.


3. (SBU) Recently the Prime Minister resolved an internal
dispute over whether the FIU should reside in the Ministry of
Finance or at the Central Bank. It will be installed in the
Prime Minister's Office. A GOM official responsible for
preparing draft legislation for approval by cabinet (a
prerequisite for presentation to parliament) told emboffs
that the Secretariat General of Government (an OMB-like
entity) had distributed a final draft to 60 key officials for
review and approval. Finance Ministry officials confirmed
their impression that the cabinet will consider the draft law
in the near future. A senior advisor to the Minister of
Justice told EconCouns that the government would aggressively
push through the AML bill in the early days of the
legislative session that begins in April. He rejected
naysayers' claims that Members of Parliament (MPs) would
block it or that the cabinet would fail to approve the bill.


4. (SBU) Opposition parliamentarians reject the GOM's
optimistic claims. They say the government has not
appropriately prepared MPs or the Moroccan people for the
changes an AML law will bring. A Socialist Party MP who
represents Marrakech and sits on the Finance Committee told
EconCouns she doubted the bill would be presented in
parliament in 2006. Noting the very full agenda of priority
issues (but unable to name more than a few, and mentioning
the already approved annual budget),an MP who represents a
northern Morocco district told EconCouns that the
parliamentary calendar could not accommodate the AML bill
this year.


5. (SBU) Comment: After a long silence on the subject, the
Moroccan media, particularly the French language financial
press, began running positive news stories on the AML bill
and GOM efforts to combat terrorism finance in late 2005.
Such media coverage is often a harbinger of government
action. Opposition parliamentarians could delay, but
probably not block, the bill's passage. If the government
puts its weight fully behind the AML law (as the Ministry of
Justice Advisor indicated),the legislation should sail
through parliament with little trouble. Experience has shown
that legislative action, even on popular and non-contentious
bills, can be excruciatingly slow. A sensitive bill like the
draft AML law could be relegated to a slow track when and if
it reaches the parliament.
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Riley