The role of currency exchange companies, commonly known as exchange bureaus, in the fight against money laundering and the financing of terrorism (AML-CFT) is more crucial than ever, in particular with their new obligations defined in the Circular 01/2021 of the Foreign Exchange Office.
To do this, this circular calls on currency exchange bureaus to set up a vigilance and internal monitoring system adapted to the size of their activity and the risks associated with this activity.
This system comprises a series of procedures, including the identification and knowledge of customers and beneficial owners in accordance with the provisions of article 12 of the said circular and the updating and conservation of documents relating to customers and to the transactions that they perform.
It also concerns the rules for filtering the data of regular customers, occasional customers and the actual beneficiaries of transactions, in relation to the lists of authorized international bodies and the decisions of the National Commission responsible for the application of the penalties provided for. by the Resolutions of the United Nations Security Council relating to terrorism, the proliferation of arms and their financing.
The system also includes the monitoring and surveillance of transactions, reporting of suspicious transactions to the National Financial Intelligence Authority (ANRF), and awareness-raising and training of the staff of the currency exchange company.
The flyer well received by professionals!
Indeed, this circular has been well received by the currency exchange companies who are announcing their commitment to respect the new obligations. This was stated by the president of the Moroccan Federation of Foreign Exchange Companies, Abderrazzak Mahmoudi.
“The federation is unconditionally committed to ensuring that its members respect the standards of vigilance as defined in circular 01/2021, in order to help enhance the image of our country vis-à-vis international bodies”, he said.
And to continue: “The federation represents all the currency traders of the country which are about 750 small and medium-sized enterprises (SMEs). These are companies that have a unique activity namely “currency exchange”. They are therefore specialized companies, whose managers are highly qualified in manual exchange ”.
It is for this reason that this circular was perfectly assimilated and this, following the training and awareness seminars jointly conducted between the federation and the Foreign Exchange Office, said Abderrazzak Mahmoudi.
Said circular, he recalled, was drawn up after amendment of Law 43.05, deemed by international bodies to be incomplete, adding that according to currency exchange companies, “this circular brings new practices on the form which are now respected, but not in substance, since it stipulates good knowledge of customers and the detection of suspicious transactions, things that currency exchange companies in Morocco master perfectly and this, thanks to their expertise and know-how, especially that this ‘is their only job on a daily basis ”.
Foreign exchange offices face multiple challenges
In Morocco, the currency exchange sector faces a multitude of challenges and constraints, the effects of which have been further accentuated with the crisis linked to the Covid-19 pandemic.
In this regard, Abderrazzak Mahmoudi indicated that “the big problem from which the currency exchange sector suffers is that it is not well known”.
Indeed, the supervisory administration (the Foreign Exchange Office) considers these companies to be small structures to which the field of action is limited to the collection of the currency to pay it to the large structures (the banks), he points out.
It is the regulations that provide for it. It requires under penalty of sanctions not to hold more than the equivalent of five hundred thousand dirhams in foreign currency and to pay the remainder within a maximum period of 24 hours, all the surplus must be sold to the banks, which, of course, impose their prices. according to their needs and the needs of their market, he explained
And to argue: “The obvious question: what if the price does not suit us? I will tell you that there is no other choice, even at a loss ”.
In addition, Abderrazzak Mahmoudi stressed that the sector remains unknown because the Central Bank, unlike the Foreign Exchange Office, considers exchange companies as financial structures able to adapt with the flexibility regime and to intervene. in the national foreign exchange market which requires analysis and management of foreign exchange risk.
According to the Central Bank, “the problem facing this sector lies in the non-professional qualification of the managers of these companies to manage this risk, whereas in reality it is the regulations which deprive them of any action”, he added, noting that the transition to the flexibility regime required a regulation which “unfortunately excluded this sector to deprive it of managing the exchange risk as recommended by the Central Bank”.
Thus, the obligation to sell to a single customer and which is also a competitor (the banking sector), the obligation to sell within 24 hours on pain of sanctions (limitation of any possibility of negotiation by favoring a sector to the detriment of the other) and the currency sales allocations granted to the banking sector and not to exchange companies are the main obstacles to the emergence and sustainability of this sector, summarized Abderrazzak Mahmoudi.
Despite this alarming situation, he argued, the currency exchange companies sector continues to believe that the Moroccan monetary authorities, which have always played a regulatory role, will know how to support this sector, which contributes to the collection of foreign currency. , the reduction of the parallel market and the permanent vigilance of AML-CFT.