AML: MOROCCO'S NEW LAW ENTERS INTO FORCE

UNCLAS RABAT 000889

SIPDIS

SENSITIVE
SIPDIS

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

E.O. 12958: N/A
TAGS: KTFN EFIN PTER PGOV MA
SUBJECT: AML: MOROCCO'S NEW LAW ENTERS INTO FORCE

REF: A. 06 RABAT 2284

B. 06 RABAT 356

C. BAIRD/SCHONANDER E-MAILS 5/7/07

(U) This message is sensitive but unclassified. Not for
internet distribution.


1. (SBU) Summary: Morocco's long-awaited anti-money
laundering statute officially entered into force on May 3,
2007, with its publication in the country's "Bulletin
Officiel." Moroccan officials tell us they are currently
working to finish the decrees that will implement the new
law, and that they anticipate that the new Financial
Intelligence Unit the law establishes should be up and
running by early 2008. They indicated that they welcome U.S.
assistance in setting up the FIU and in training its
personnel, but believe such assistance would most usefully be
provided next year. They added (and Embassy Madrid confirms)
that Spain and France will take the lead in the EU in
providing similar assistance, and that a convention to this
effect will be signed in the near future. End Summary.


2. (U) Morocco's anti-money laundering legislation, which was
passed in parliament's special session in early March, became
official on May 3 with its publication in the Kingdom's
"Bulletin Officiel." The law (informal translation will
follow via fax) fills in the key missing piece in Morocco's
counter-terrorism finance legal framework, building on the
overall law on terrorism which was passed in 2003. It
establishes a financial intelligence union (attached to the
Prime Minister's office),provides new powers for freezing
and seizing assets, and requires financial institutions to
report suspicious transactions. Penalties for money
laundering range from 2 to 5 years imprisonment and 2,500 USD
to 12,000 USD for individuals and 55,000 USD to 350,000 USD
for institutions. Financial institutions that fail to carry
out their monitoring responsibilities under the law can be
fined from 12,000 USD to 60,000.


3. (SBU) Earlier in late April, in anticipation of the law's
publication, Econoffs met with Ministry of Finance officials
to learn their timeline for implementation of the law and to
renew discussion of how the U.S. might best assist Morocco as
it moves to set up its FIU. Deputy Treasury Director Habib
El Idrissi and Abdelaziz Khaoua, Head of the Credit
Establishments Division of the Treasury Directorate told us
that they were currently in the process of drafting
implementing regulations for the law. These will be
submitted to the Council of Government and the Council of
Ministers after the Secretary General of the government has
organized a consultation around them, but as the "essential
has already been discussed," El Idrissi predicted this would
be accomplished within two months. Thereafter, the FIU will
be set up and made operational. El Idrissi added that the
Justice Ministry is organizing a "day of reflection" for
stakeholders from across the government and private sector to
inform them of the law's requirements and to explain how it
will be implemented.


4. (SBU) Reviewing the law's passage through Parliament, El
Idrissi noted that while a number of non-substantive
amendments were introduced the Chamber of Deputies, expected
opposition did not emerge in the Chamber of Representatives.
Instead that chamber approved the bill unchanged. He
suggested that the government had been successful in arguing
that the FIU offered financial institutions and others an
additional "protection," in that it would review suspicious
cases before they were referred to the justice system, so
that only cases which turned out to have "irregularities"
would be sent to the judiciary.


5. (SBU) Noting the intensive consultations that have
occurred over the years, El Idrissi and Khaoua looked forward
to further cooperation with the U.S. in setting up Morocco's
FIU and in providing training for its agents. They stressed,
however, that such training would be most useful if it was
provided in 2008, as they expect that the Financial
Intelligence Unit will become operational at the turn of the
year. They noted that they have also received offers of
assistance from the European Union, and in fact will soon
sign a cooperation convention with France and Spain. Under
it, the two countries will provide training to personnel who
will be assigned to the FIU (Embassy Madrid separately
confirmed this information-- ref C). They judged USG

training, even if similar, would not be duplicative, but
would provide valuable added perspective on U.S. experience
in the area. El Idrissi noted that Morocco intends that the
FIU be "supple and not gigantic." It will be constituted of
a core group of personnel, and will pull in additional
resources from concerned Ministries and institutions as is
necessary.


6. (SBU) Comment: Publication of the law marks a major step
forward for Morocco counter-terrorism finance regime. We are
working with Legatt to organize a potential consultation
visit in coming months to review training needs, even as

Moroccan officials from the Central Bank and elsewhere
continue to participate in relevant FDIC and other training
opportunites. We are also reaching out to counterparts at
European missions to ensure that our bilateral assistance
efforts are coordinated. End Comment.


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RILEY