Annual Report on Exchange Arrangements and Exchange Restrictions 2005
Chapter

MOROCCO

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2005
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(Position as of December 31, 2004)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: January 21, 1993.
Exchange Arrangement
CurrencyThe currency of Morocco is the Moroccan dirham.
Other legal tenderCommemorative gold coins with a face value of DH 250 and DH 500, and commemorative silver coins with a face value of DH 50, DH 100, DH 150, and DH 200 are also legal tender.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementBank Al-Maghrib (BAM)—the central bank—intervenes continuously in the market during the day by setting the buying and selling rates applicable to its operations with banks, based on a basket of currencies weighted in accordance with the geographic distribution of Morocco’s foreign trade and the pattern of currencies of settlement. This quotation system is also based on the observance of the cross exchange rates in the international market. For exchange operations with customers, banks may not exceed the rate limits set by the BAM. Banks charge a commission of 0.2% on their foreign exchange transactions with customers.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketBanks may provide forward exchange contracts for commercial and financial operations for periods of up to 12 months. They may also open foreign exchange options to economic operators as a hedge against exchange rate risks.
Arrangements for Payments and Receipts
Prescription of currency requirementsAll transactions between Morocco and foreign countries—regardless of the type of transactions—must be settled in foreign currencies that are quoted by the BAM or in convertible dirhams.
Use of foreign exchange among residentsTransactions among residents in Morocco must be denominated and settled in domestic currency.
Payments arrangements
Regional arrangementsA regional payments arrangement among the central banks of Algeria, Libya, Mauritania, Morocco, and Tunisia governs payment operations among those countries.
Administration of controlExchange control is administered by the Foreign Exchange Office (FEO), an agency under the MOF. This office has delegated the execution of the main exchange control measures to authorized banks. Import and export licenses, which are required for some products, are issued by the Department of Foreign Trade (DFT).
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)In accordance with the relevant UN Security Council resolutions, prior FEO authorization is required to conduct financial transactions with nonresident individuals or entities associated with suspected links to terrorism.
In accordance with UN sanctionsMorocco maintains restrictions against certain countries pursuant to UN Security Council resolutions.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents may purchase, hold, and sell gold coins in Morocco for numismatic or investment purposes. Ten different types of foreign gold coins are traded on the Casablanca Stock Exchange, which does not, however, deal in gold bars.
Controls on external tradeImports of gold are subject to authorization from the Customs and Indirect Taxes Administration. The MOF fixes annually a quota for the importation of gold ingots. The quota is then allocated among jewelers and industrial users of precious metals. Exports of gold are also regulated.
Controls on exports and imports of banknotes
On exports
Domestic currencyThe exportation of domestic banknotes is subject to authorization.
Foreign currencyForeign and Moroccan nonresidents may export foreign banknotes debited from their foreign exchange or convertible dirham accounts, or that were previously imported. Foreign nationals visiting Morocco are permitted to repurchase foreign exchange on presentation of receipts indicating the amount of the original conversion of foreign exchange into dirhams. Residents may also export foreign banknotes within the limits specified in foreign exchange regulations.
On imports
Domestic currencyThe importation of domestic banknotes is subject to authorization.
Foreign currencyNonresident travelers may bring in unlimited amounts of foreign banknotes, traveler’s checks, and other means of payment denominated in foreign exchange. If nonresidents wish to take out some or all of the foreign exchange they are importing, a customs declaration for amounts in excess of the equivalent of DH 50,000 is necessary. Resident travelers may also import unlimited amounts of foreign banknotes or any other means of payment denominated in foreign exchange, but must surrender them for dirhams within 30 days of their return to Morocco. Foreign exchange banknotes may be brought into the country without a customs declaration.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyTwo types of accounts may be opened.
(1) Foreign resident individuals and corporations may open foreign exchange accounts in Moroccan banks without limitation. These accounts may be credited with transfers from abroad, any foreign exchange–denominated means of payment (e.g., banknotes or traveler’s checks), or foreign currency that was withdrawn from a Moroccan bank in accordance with current foreign exchange regulations. They may be debited for transfers abroad or for purchases of dirhams for all domestic settlements. There are no restrictions on the rate of interest payable on the accounts or on transfers between foreign exchange accounts or between these accounts and convertible dirham accounts. Authorized banks may issue international credit cards to holders of these accounts. Overdrafts on these accounts are not permitted.
(2) Moroccan exporters of goods and services holding convertible export promotion accounts (CCPEX) may open foreign exchange accounts; those without a CCPEX must obtain prior approval from the FEO. Up to 20% of foreign exchange receipts from exports may be credited to these accounts (deep sea fishing companies may credit up to 25%) and the remainder must be sold to Moroccan banks. Exporters’ foreign exchange accounts may also be credited without restriction with proceeds (principal and interest) from financial investments made from these accounts and with transfers from other foreign exchange accounts of the same account holder. These accounts may be debited for payment of business expenses, as provided for in the exchange regulations; for investments in authorized banks; for subscribing to bonds issued by the Moroccan Treasury; to credit another foreign exchange account or a CCPEX held in the name of the same account holder; and for the surrender of foreign exchange to banks. Authorized banks may issue international credit cards to holders of these accounts. Overdrafts on these accounts are not permitted.
Approval requiredApproval is not required for foreign residents.
Held abroadYes.
Approval requiredApproval is not required for foreign residents.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyForeign residents may open accounts in convertible dirhams in Moroccan banks. The accounts may be credited with the proceeds of foreign exchange sales and amounts transferable from Morocco, in accordance with exchange regulations. The accounts may be debited to purchase foreign exchange or for any other domestic settlement.
There are no restrictions on interest payments or on transfers between accounts abroad in convertible dirhams and between convertible dirham accounts and foreign exchange accounts.
Authorized banks may issue international credit cards to holders of these accounts.
Overdrafts are not permitted on these accounts.
Exporters of goods and services may open convertible dirham accounts in Moroccan banks.
These accounts may be credited with the dirham equivalent of 20 percent of foreign exchange that is repatriated and transferred to approved intermediary banks for exports of goods and services. Funds in the accounts may be used to finance expenditures undertaken abroad in relation to the professional activities of the interested parties. Fishing companies may deposit up to 100 percent of the exchange value of repatriated foreign exchange.
Exporters may open a foreign exchange account, a CCPEX, or both, provided that the overall percentage of foreign exchange earnings to be deposited in the accounts does not exceed 20 percent of repatriated earnings.
Authorized banks may issue international credit cards to holders of these accounts.
Overdrafts are not permitted on these accounts.
Nonresident Accounts
Foreign exchange accounts permittedTwo types of accounts may be opened.
(1) Foreign currency accounts in the names of foreign nationals may be maintained by nonresident natural or juridical persons of foreign nationality. These accounts may be credited with transfers from abroad; with foreign banknotes, checks, and traveler’s checks; with any other means of payment denominated in foreign currency; and with foreign currency withdrawn from domestic banks, in accordance with exchange regulations. They may be debited for transfers abroad or for the surrender of foreign currency for dirhams for all domestic settlements.
(2) Foreign currency accounts may be opened by Moroccan nationals residing abroad. These accounts may be credited with transfers from abroad, with traveler’s checks, banknotes, or any other means of payment denominated in foreign currency, and foreign currency withdrawn from domestic banks in accordance with exchange regulations. They may be debited for transfers abroad, and for the surrender of foreign currency for dirhams for all domestic settlements. There are no restrictions on the rate of interest payable on these two types of accounts or on transfers between foreign currency accounts, or between these accounts and convertible dirham accounts.
Domestic currency accountsThere are three types of accounts.
(1) Dirham accounts convertible into foreign currency are restricted to resident and nonresident natural and juridical persons of foreign nationality.
(2) Convertible dirham accounts may be opened freely in the name of Moroccans residing abroad. Both types of accounts may be credited with proceeds from the surrender of foreign currency and transfers from Morocco in accordance with current exchange regulations. They may be debited for the purchase of foreign currency and all domestic settlements. There are no restrictions on transfers between foreign accounts in convertible dirhams, or between these accounts and foreign currency accounts. Holders of these accounts may obtain international credit cards from authorized banks. Overdrafts are not allowed, and there are no restrictions on the interest rate payable.
(3) Nonresident foreign nationals not entitled to maintain convertible dirham accounts may open term convertible accounts. Effective September 1, 2004, funds in these accounts with balances less than or equivalent to DH 200,000 as of that date may be transferred abroad without restrictions no later than March 31, 2005. For accounts exceeding this limit, funds may be transferred within a maximum period of four (previously, five) years in annual installments of 25% (previously, 20%).
Holders of convertible term accounts and those acquiring them, including Moroccans resident abroad, may make unlimited use the funds in the accounts to cover any domestic expenditure in dirhams, including investment expenditures. Investments financed from the accounts shall be covered by the convertibility arrangements within two years.
Convertible into foreign currencyNonresident foreign individuals or corporations may open convertible national currency accounts in domestic banks and foreign accounts in convertible dirhams. These accounts may be credited with the proceeds of foreign exchange sales and transferable amounts from Morocco in accordance with exchange regulations. The accounts may be debited for the purchase of foreign exchange or for any domestic settlements.
There are no restrictions on interest payments on the accounts, or on transfers between foreign accounts in convertible dirhams and between convertible dirham accounts and foreign exchange accounts.
Authorized banks may issue international credit cards to holders of these accounts.
Overdrafts are not permitted on these accounts.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsImporters may make advance payments for imports of capital goods up to 40% of the f.o.b. value of the imports. In the case of spare parts, consumer goods, and samples, advance payment is limited to the foreign exchange equivalent of DH 20,000. Importers may make payment in advance of the due date under a contract in exchange for a discount of at least 3% from the foreign suppliers.
Documentation requirements for release of foreign exchange for importsExcept for goods imported by air, insurance policies for imports must be taken out with insurance companies in Morocco. For certain groups of goods, however, insurance policies may be underwritten abroad. This group includes (1) externally financed imports if the terms include foreign insurance; (2) capital goods and equipment under turnkey contracts; and (3) crude oil, gas, heifers, and wood.
Domiciliation requirementsFor all imports, a commercial security must be underwritten by the importer and domiciled at an authorized bank to cover eventual payment for goods and related fees. This domiciliation is not required for imports that do not involve payments.
Import licenses and other nontariff measures
Positive listImports are not restricted, except for arms and explosives; secondhand clothing; chemical products that deplete the ozone layer (effective May 13, 2004); and used tires and wheels with used tires or retreads. These products require an import license issued by the DFT.
Negative listImports of products that affect public health, morals, order, or security are prohibited.
Other nontariff measuresImports may be restricted for limited periods to protect infant industries or to countervail dumping. Tariff measures may be established for periods of five years to protect infant industries, and they may be extended to eight years. In the case of dumping, the product in question is subject to a prior import declaration for a maximum period of nine months and this measure is renewable once. During this period, investigations are carried out to determine whether or not dumping is taking place and, if it is, to determine what tariff measures are to be introduced. No product was subject to a prior import declaration in 2004.
Import taxes and/or tariffsCustoms duties are levied on an ad valorem basis. A large number of consumer goods not produced in Morocco are subject to a 10% duty. Imports of products to be used in the manufacture of goods for export are exempt from customs duties. Specific rates are applied to certain agricultural products.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsAll exporters must provide an export certificate guaranteeing repatriation and surrender of foreign exchange proceeds. Certain exports are exempt from this regulation. Proceeds from exports may be collected abroad and used directly to finance imports of goods and raw materials needed to manufacture goods for export.
Surrender requirementsForeign exchange must be surrendered within one month of the date of payment by foreign buyers specified in the commercial contract. In principle, this date must not be more than 150 days from the date of the shipment of goods. This deadline may be extended if warranted by business conditions and approved by the FEO. Exporters of goods and services are authorized to hold up to 20% of export earnings in convertible dirham or foreign exchange CCPEX accounts. Companies exporting clothing, household textile products, and related products may grant their foreign clients a discount of up to 3% of the invoice price.
Financing requirementsNo.
Documentation requirementsExporters must provide an export certificate guaranteeing repatriation and surrender of proceeds from their exports.
Preshipment inspectionPreshipment inspection is not required; however, exports of food products are subject to quality control.
Export licenses
Without quotasExports of grain flour, charcoal, archaeological items, chemical products that deplete the ozone layer, and hides and skins require export licenses issued by the DFT.
Export taxesA tax of DH 34 a ton is levied on exports of phosphates. A 1% quality control tax is levied on exports of foodstuffs.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersAuthorized banks may make payments for current transactions, such as fees relating to international trade transactions, transportation, services, technical assistance, income from capital (including interest and dividends), and wages.
Authorized banks may transfer amounts owed to foreign suppliers for international business transactions (goods and services) conducted by Moroccan corporations (purchase of goods abroad for direct sale to a foreign customer).
Effective September 8, 2004, authorized intermediaries may issue grants in banknotes and/or transfer their tax-exempt and taxable earnings to foreign or Moroccan artists residing abroad who are invited to exhibit or perform in Morocco.
Trade-related paymentsPayments for freight, unloading, and storage are not restricted. Importers may pay for overweight freight charges in amounts not exceeding 10% of the amount initially stated in the commercial contract, as well as any penalty for the shipment. Representation and brokerage charges of exporters of goods or services may be settled for up to 10% of the value of exports of goods or services; this limit may be exceeded only when payment is made by debit to a CCPEX.
Rental fees for stands and exhibitor fees for fairs and exhibitions abroad by residents who do not hold a CCPEX account may be transferred by authorized intermediaries upon presentation of an invoice or fee slip duly signed by the organizer of the fair or exhibition.
Authorized intermediaries may also freely transfer funds returned by the General Treasury of the Realm for the VAT on bills of purchase in Morocco collected by diplomatic and consular representatives, representatives of international public bodies, or by foreign staff of those bodies.
Indicative limits/bona fide testYes.
Investment-related payments
Indicative limits/bona fide testThere are indicative limits on transfers of interest, which must be market based.
Payments for travel
Quantitative limitsFor tourist travel, authorized banks may provide Moroccan or foreign nationals the equivalent of DH 15,000 a person a year. An additional allowance of DH 7,000 may be granted for a minor child on the passport of the beneficiary parent, when accompanying the parent at the time of travel abroad. For a given trip, the tourist allowance may be combined, in whole or in part, with any other foreign exchange allowances granted under a general or special FEO authorization. The same allowance for tourist travel may also be granted to Moroccan nationals living abroad upon their return to their country of residence following their stay in Morocco, provided they have not benefited from the 15% allowance on remittances within the previous 12 months, up to a limit of DH 20,000. Residents of foreign nationality who wish to travel abroad may be granted the foreign exchange equivalent of all their income savings. Moroccan or foreign nationals residing in Morocco and Moroccan nationals residing abroad are eligible for a foreign exchange allowance equivalent to DH 14,000 for Umra (lesser pilgrimage) travel. Grants for tourist travel and pilgrimage (Umra) travel may be granted in whole or in part, by subrogation, to Moroccan travel agencies approved by the Ministry for Tourism, for tourism, family, cultural, or private travel abroad, by means of an individual or group check, or by transfer to foreign service providers. Business travel by exporters of goods and services may be financed without restriction by debiting convertible export promotion accounts or foreign exchange accounts maintained with Moroccan banks. In the case of business travel other than by exporters of goods and services, annual foreign exchange allowances are approved by the FEO on the basis of need, with a daily limit of DH 2,000. Banks have been authorized to provide allowances of up to DH 40,000 to small and medium-sized enterprises and of up to DH 20,000 a year for business travel by individuals not belonging to either of these categories. Larger allowances may be approved by the FEO on proof of need. The allowances for specific business travel may not be added to other allowances, except for the tourist allowance.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalApproval from the Ministry of Health is required to make transfers abroad for medical treatment when the patient is not covered by an insurance policy.
Quantitative limitsAuthorized banks may provide foreign exchange allowances to Moroccan nationals for travel abroad for medical treatment up to a maximum of the equivalent of DH 30,000, and to make transfers on patients’ behalf for treatment abroad to hospitals and medical institutions concerned. Banks are authorized to make transfers for study abroad as follows: (1) an annual installation allowance equivalent to DH 20,000 and the same amount for a person accompanying a minor student leaving Morocco for the first time; (2) school fees to foreign academic institutions, in unlimited amounts, upon presentation of supporting documents; (3) allowances for living expenses amounting to (a) the equivalent of DH 7,000 a month for 12 months for non–scholarship holders; (b) DH 7,000 a month less the amount of the scholarship for scholarship holders; (c) expenses required for boarding school plus DH 2,500 a month for school fees; and (d) for students in the United States, the sum for tuition fees and living expenses stated in U.S. immigration documents; (4) payments of rent and corresponding charges to a foreign landlord upon presentation by a student or guardian of a lease and a certificate of residence or other equivalent document; (5) the purchase price of a computer, up to DH 25,000 for a three-year period; and (6) repayment of student loans contracted with foreign banks. To cover the costs of internships and missions abroad, banks are authorized to sell foreign exchange to staff of public agencies, local governments, public institutions and enterprises, and foreign institutions or bodies up to the amount allocated by their employers. Medical staff in public agencies, local governments, and public institutions and enterprises wishing to attend professional events abroad are also eligible to purchase foreign exchange. If the costs of the mission or internship is borne in full by the traveler, banks may provide DH 2,000 a day up to DH 20,000 a trip. Banks may transfer funds to cover immigration application fees. In addition, immigrants who have obtained a visa may purchase up to the equivalent of DH 25,000 for moving expenses.
Indicative limits/bona fide testRequests for additional amounts require FEO approval, which is granted upon presentation of supporting documents.
Foreign workers’ wages
Quantitative limitsForeign nationals residing in Morocco and employed in either the private or public sectors or engaged in industrial, commercial, agricultural, and certain other professions may transfer all their income. They may also contribute freely to pension or social security funds in their countries of origin. These arrangements apply equally to foreign spouses of Moroccan nationals.
Commercial banks may transfer pensions paid by government or private organizations to retired individuals residing permanently abroad. In addition, retired foreign nationals and foreign spouses of Moroccan nationals may transfer their entire pensions. They may also transfer severance benefits by order of a Moroccan court.
Credit card use abroad
Prior approvalEffective February 17, 2004, banks may issue credit cards without restriction to (1) foreign nationals holding accounts in foreign exchange or convertible dirhams; (2) staff of international organizations that have offices or headquarters in Morocco; (3) Moroccan nationals residing abroad who hold accounts in convertible dirhams or in foreign exchange; (4) exporters of goods or services who hold foreign exchange or CCPEX accounts; and (5) economic operators, other than exporters of goods and services, who have a foreign exchange travel allowance. Authorized banks may also issue international credit cards to other economic operators, and to any Moroccan or foreign individual eligible for a foreign exchange allowance under the exchange regulations for travel for tourism, religious, medical, or educational purposes.
Quantitative limitsThe limit is the amount of funds in the beneficiary’s account and the authorized foreign exchange allowance.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsResidents of Moroccan nationality and Moroccan legal entities must repatriate foreign exchange receipts accruing from all their claims on nonresidents and sell them on the foreign exchange market. Resident foreign nationals must repatriate only those foreign exchange receipts that result from their activities in Morocco. Repatriation must take place within one month of the date of the claim.
Effective September 8, 2004, rental fees for stands and exhibitor fees for fairs and exhibitions abroad for residents who do not have a CCPEX account may be transferred by authorized intermediaries upon presentation of an invoice or fee slip duly signed by the organizer of the fair or exhibition.
Authorized intermediaries may also freely transfer the funds returned by the Treasury General of the Realm for the VAT levied domestically on bills of purchase by diplomatic and consular representatives, representatives of international public organizations, or by the foreign staff of those bodies.
Surrender requirementsExporters of goods and services may keep up to 20% of their foreign exchange receipts in foreign currency or convertible dirham accounts.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsNonresidents may purchase Moroccan securities without limitation.
Sale or issue locally by nonresidentsThe issue of capital market securities by nonresidents is subject to authorization. There are, however, no restrictions on the sale of Moroccan securities by nonresidents. Proceeds from such sales may be transferred freely, provided that the relevant purchases are financed by foreign exchange inflows or other comparable means. In other cases, the proceeds must be deposited in a convertible dirham account and may be transferred abroad over a four-year period.
Purchase abroad by residentsPurchases of foreign securities by residents of Moroccan nationality and transfers of the funds required for such purchases are subject to the prior approval of the FEO. Authorized intermediary banks may place foreign exchange with correspondent banks abroad and may acquire sovereign securities issued by international financial institutions. Residents of foreign nationality are free to purchase securities and other funds, provided that these purchases are financed from their foreign exchange holdings abroad or from their foreign exchange accounts or convertible dirham accounts.
Sale or issue abroad by residentsThese transactions are subject to prior FEO authorization.
Bonds or other debt securitiesThe regulations governing shares or other securities of a participating nature apply.
On money market instruments
Sale or issue locally by nonresidentsThe issue of these instruments by nonresidents is prohibited.
Purchase abroad by residentsPurchases by Moroccan nationals require prior FEO authorization. Residents of foreign nationality are free to engage in these transactions, provided they are financed with their own foreign exchange holdings.
Sale or issue abroad by residentsThese transactions require prior FEO authorization.
On collective investment securitiesThe regulations governing money market instruments apply.
Controls on derivatives and other instruments
Purchase locally by nonresidentsAuthorized intermediary banks may offer instruments to hedge against exchange, interest rate, and commodity price fluctuation risks to resident operators only.
Sale or issue locally by nonresidentsOnly Moroccan banks may offer instruments to hedge against exchange, interest rate, and commodity price fluctuation risks to operators.
Purchase abroad by residentsEffective January 13, 2004, economic agents may acquire hedging instruments through authorized banks against price fluctuations for certain commodities that are or may be traded on a secondary market. Effective June 1, 2004, authorized intermediary banks may offer their customers their own exchange options, to the exclusion of foreign instruments. To hedge against customer risks, authorized intermediary banks must have recourse to the local interbank market. However, if they are unable to find the appropriate hedging instrument on the local market, they may turn to the international market for foreign exchange hedging instruments. Hedging transactions should be backed by the foreign exchange options taken by customers. Effective November 24, 2004, authorized banks may also offer resident economic operators who take out foreign loans instruments to hedge against the risk of interest rate fluctuation. These instruments (option, hedge against interest rate risk) should be backed by real trade or financial transactions excluding speculative transactions.
Sale or issue abroad by residentsThese transactions are subject to prior approval by the FEO.
Controls on credit operations
Commercial credits
By residents to nonresidentsExporters of goods are free to extend commercial credits to nonresidents for up to 150 days. Credits with longer terms may be extended with FEO approval, if justified on the basis of commercial necessity.
To residents from nonresidentsImporters may obtain commercial credits abroad and transfer payments of interest and principal.
Financial credits
By residents to nonresidentsThese transactions are subject to FEO approval. Local banks may extend loans in dirhams to foreign nonresident individuals for the purchase or development of Moroccan real estate, up to 70% of the value of the real estate to be purchased or developed; these loans must be serviced with funds transferred from abroad or with debits from convertible dirham accounts.
To residents from nonresidentsResident enterprises may obtain loans abroad without limitation, provided that they are backed by investment or foreign trade transactions. Repayments must be made from Morocco through the banking system.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsMoroccan banks may issue securities to nonresidents, on behalf of residents in support of the participation of the latter in markets abroad (the provision of goods or services), the refund of down payments received from foreign customers, and the guarantee of loans or any other financial instruments mobilized in accordance with foreign exchange regulations.
To residents from nonresidentsMoroccan banks may issue or accept, in favor of residents, sureties issued on behalf of nonresidents in support of the participation of those nonresidents in public or private contracting, the supply of goods or services, and the refund of down payments. They may also issue sureties on behalf of nonresidents in settlement of tax liabilities or financial obligations. A counter guarantee from a foreign bank is required for sureties issued by Moroccan banks on behalf of nonresidents. When claims are entered under sureties issued or accepted in favor of residents on behalf of nonresidents, the relevant amounts must be repatriated to Morocco.
Controls on direct investment
Outward direct investmentOutward direct investments are subject to prior approval of the FEO, but residents of foreign nationality are free to invest abroad, provided that the operations are financed from their own funds abroad or from their holdings denominated in convertible dirhams or foreign exchange.
Controls on liquidation of direct investmentThere are no controls on transfers made directly through the banking system of the proceeds of the liquidation or sale of foreign investments, including capital gains when such investment is financed by sale of foreign exchange or other comparable methods.
Controls on real estate transactionsThese operations are subject to the investment regulations.
Purchase abroad by residentsPurchases of real estate abroad by Moroccan nationals require prior FEO authorization. Residents of foreign nationality may purchase real estate abroad with funds from foreign exchange accounts.
Purchase locally by nonresidentsForeign nationals may purchase real estate, except farmland.
Controls on personal capital transactionsThe limit on the transfer of assets (that are not subject to convertibility arrangement) by foreign nationals was increased to the equivalent of DH 30,000 from DH 25,000 for a year of residency in Morocco.
Loans
By residents to nonresidentsThese operations are subject to FEO approval. However, Moroccan banks may grant loans to foreign individuals for the purchase or development of real estate in Morocco up to 70% of the value of the real estate to be purchased or developed.
To residents from nonresidentsThese operations are subject to FEO approval.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsGifts and grants are subject to authorization. However, transfers of inheritance may be effected freely if the inherited property is covered by convertibility arrangements. In other cases, eligible parties may enjoy transfer rights if such rights have not been already exercised by the deceased.
Settlement of debts abroad by immigrantsThese operations are unrestricted, provided they are financed from the foreign funds of the parties concerned or from their funds in foreign exchange or in convertible dirhams.
Transfer of assets
Transfer abroad by emigrantsEffective September 8, 2004, upon departure from Morocco, foreign nationals may freely transfer those assets not subject to the convertibility arrangement for amounts up to DH 30,000 (previously, DH 25,000) or the equivalent for each year of residence in Morocco, in addition to other transfer rights (e.g., income or savings). Any remainder must be deposited in a convertible term account.
Transfer of gambling and prize earningsThese earnings are transferable, provided that the gambling was financed with foreign currency.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadCommercial banks may borrow abroad only to finance foreign trade or investment operations on behalf of customers.
Maintenance of accounts abroadBanks may open and maintain accounts with their correspondents to effect outward payments and to manage hedging operations against price fluctuation risk for certain commodities.
Lending to nonresidents (financial or commercial credits)Lending by Moroccan banks is subject to FEO approval. However, banks may grant loans to nonresident foreign individuals for purchases or development of real estate in Morocco, up to 70% of the value of the real estate. Banks may use available cash held in foreign exchange accounts held by foreign nationals, Moroccan citizens residing abroad, and exporters to provide buyers’ credits to foreign customers to finance Moroccan exports.
Lending locally in foreign exchangeFEO approval is required for these transactions.
Purchase of locally issued securities denominated in foreign exchangeThese transactions are subject to prior FEO approval.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsConvertible dirham and foreign exchange accounts are excluded from reserve requirements.
Credit controlsOverdrafts are not permitted in foreign exchange accounts.
Differential treatment of deposit accounts held by nonresidents
Credit controlsAn overdraft position is not permitted in foreign exchange accounts.
Investment regulations
Abroad by banksThese operations are subject to approval by the FEO and the monetary authorities. Authorized intermediary banks may undertake foreign exchange investments with counterparts abroad and may purchase sovereign bonds and securities issued by international financial institutions.
In banks by nonresidentsThese operations are subject to approval by the monetary authorities.
Open foreign exchange position limitsThe open foreign exchange position limit for each currency is 10% of net capital and 20% in aggregate for all currencies.
On resident assets and liabilitiesThe assets and liabilities of these accounts are included in the calculation of banks’ foreign exchange positions.
On nonresident assets and liabilitiesThe assets and liabilities of these accounts are included in the calculation of banks’ foreign exchange positions.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsn.a.
Changes During 2004
Nonresident accountsSeptember 1. Funds held by nonresident foreign individuals in term convertible dirham accounts with balances less than or equal to DH 200,000 as of September 1, 2004, were allowed to be transferred abroad without restriction no later than March 31, 2005. For convertible term accounts, the period over which funds could be transferred abroad was reduced to four years from five and the annual installment was raised to 25% from 20%. In addition, term convertible dirham accounts were allowed to be used for the settlement of any dirham transaction without limit.
Imports and import paymentsMay 13. To protect the ozone layer, certain chemicals were made subject to an import license.
Payments for invisible transactions and current transfersFebruary 17. Banks were authorized to freely issue international credit cards to several categories of residents and nonresidents.
September 8. Authorized intermediaries were allowed to provide foreign exchange for the remuneration of artists invited to perform or exhibit in Morocco.
Proceeds from invisible transactions and current transfersSeptember 8. Rental fees for stands and exhibitor fees for fairs and exhibitions abroad for residents who do not have a CCPEX account were allowed to be transferred by authorized intermediaries upon presentation of an invoice or fee slip duly signed by the organizer of the fair or exhibition.
September 8. Authorized intermediaries were permitted to transfer the funds returned by the Treasury General of the Realm for the VAT levied domestically on bills of purchase by diplomatic and consular representatives, representatives of international public organizations, or by the foreign staff of those bodies.
Capital transactions
Controls on derivatives and other instrumentsJanuary 13. Economic agents were permitted to acquire hedging instruments through authorized banks against price fluctuations for certain commodities that were or could be traded in the secondary market.
June 1. Authorized intermediaries were permitted to offer their customers their own exchange options, to the exclusion of all instruments from abroad.
November 24. Authorized intermediaries were allowed to offer economic operators who have taken out external loans instruments to hedge against the risk of interest rate fluctuations.
Controls on personal capital transactionsSeptember 8. The limit on the transfer of assets (that are not subject to the convertibility arrangement) by foreign nationals was increased to the equivalent of DH 30,000 from DH 25,000 for each year of residency in Morocco.

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