Beneficial Ownership in Morocco: Identify, Verify and Retain

What the law says#

Law 43-05 on combating money laundering, as amended by Law No. 12-18, defines three concepts in Article 1: the business relationship, the beneficial owner and the legal arrangement. The beneficial owner is the natural person who ultimately:

• owns or controls the client;
• or on whose behalf a transaction is carried out;
• including where that ownership or control runs through a chain of companies or legal arrangements.

Two practical consequences follow. A company is never a beneficial owner: the analysis always goes up to one or more natural persons. And the legal definition contains no threshold: what counts is the reality of ownership or control.

Article 4 then requires the beneficial owner to be identified and their identity to be verified. The guide to the AML/CFT obligations of non-financial professions explains which of a firm's files fall within this scope.

The 25% threshold comes from the decree, not the law#

Decree No. 2-21-708, published in Official Bulletin No. 7024 of 23 September 2021, sets out the criteria. A beneficial owner includes, in particular, any person who directly or indirectly holds 25% or more of the capital or voting rights.

This threshold is a benchmark, not a limit. The legal definition also covers control through other means: a shareholders' agreement granting a veto, a power to appoint most of the directors, financing on which decisions depend, a nominee arrangement. If the analysis reveals such control, the person concerned must be identified even with 10% of the capital.

Where no person can be identified through ownership or control, the FATF standards provide that, as a last resort, the person who holds the position of senior managing official of the entity should be identified. Check how the decree transposes this rule before applying it, and always document the steps taken before reaching that choice.

The public beneficial ownership register#

According to information published when the register was launched, companies must declare their beneficial owners within one month of registration or of any change, with existing entities having been given three months. The press reported fines of MAD 5,000 to 50,000 for failure to declare and MAD 10,000 to 100,000 for false or outdated information.

Verification: a six-step process#

1. Obtain the ownership structure from the client, as a signed organisation chart going up to the natural persons.
2. Reconcile that statement with the corporate documents: up-to-date articles of association, a recent extract from the trade register, the register or list of shareholders.
3. Consult the beneficial ownership register and note any discrepancy.
4. Look for other forms of control: agreements, powers of attorney, appointment rights, financing.
5. Verify the identity of each beneficial owner against an official document, and check whether they are a politically exposed person.
6. Record the analysis: sources consulted, discrepancies, conclusion, date and author.

If any step cannot be completed, Article 4 requires the professional to decline or terminate the relationship and to consider a suspicious transaction report.

Which documents should you ask for?#

Ask only for what serves identification and verification. The guide to KYC and Law 09-08 explains how to reconcile this collection with data protection.

Four practical cases#

A SARL with two shareholders#

Two shareholders with 60% and 40%: both exceed 25% and are beneficial owners. If a manager who is not a shareholder takes every decision alone under a very broad mandate, the analysis should mention this and assess whether that person exercises control.

A multi-tier holding structure#

A client company wholly owned by a holding company, itself owned by four people with 25% each: all four are beneficial owners through indirect ownership. In practice, indirect ownership is usually assessed by multiplying the percentages at each level; check the method adopted by Decree 2-21-708 and take account of control exercised through a majority holding in an intermediate entity.

A legal arrangement#

Trusts mainly arise under foreign law, but Law 43-05 expressly covers legal arrangements and non-resident clients may use them. Every person who plays a role in setting it up, administering it, benefiting from it or controlling it must be identified.

A foreign company#

The OMPIC register covers only entities formed in Morocco and legal arrangements. For a foreign company, the sources are the registers of its home country and the documents provided. A high-risk country calls for enhanced due diligence, in line with your risk-based approach.

Retention and updating#

Article 7 of Law 43-05 requires identification documents on the client and the beneficial owner to be kept for ten years from the end of the relationship. Article 4 requires this data to be kept up to date: a change of shareholder, a capital increase or a new manager should trigger a fresh analysis.

Checklist#

• The written procedure cites the Article 1 definition and the threshold in the decree.
• Every file contains an organisation chart going up to the natural persons.
• The OMPIC register has been consulted and discrepancies are recorded.
• Control through other means has been looked for.
• Politically exposed person status has been checked.
• The date of the next update has been set.