VZCZCXRO1928
PP RUEHTRO
DE RUEHRB #0300/01 0971906
ZNR UUUUU ZZH
P 071906Z APR 09
FM AMEMBASSY RABAT
TO RUEHC/SECSTATE WASHDC PRIORITY 9955
INFO RUCNMGH/MAGHREB COLLECTIVE
RUEHNE/AMEMBASSY NEW DELHI 0113
RUEHTV/AMEMBASSY TEL AVIV 3568
RUEHDE/AMCONSUL DUBAI 0160
RUEHIT/AMCONSUL ISTANBUL 0093
RUEHJM/AMCONSUL JERUSALEM 1978
RUEHBI/AMCONSUL MUMBAI 0017

UNCLAS SECTION 01 OF 04 RABAT 000300 
 
SIPDIS 
SENSITIVE 
 
STATE FOR H, NEA/RA AND NEA/MAG 
NEW DELHI AND MUMBAI PLEASE PASS TO LYNCH DELEGATION 
 
E.O. 12958: N/A 
TAGS: OREP EFIN PGOV PREL KDEM MO
SUBJECT: SCENESETTER FOR CODEL LYNCH 
 
REF: A. STATE 029978 (NOTAL) 
     ¶B. RABAT 0280 (NOTAL) 
 
RABAT 00000300  001.2 OF 004 
 
 
¶1.  (SBU) Summary:  Representative Lynch, we warmly welcome 
you and your delegation to Morocco.  The Kingdom of Morocco, 
one of our strongest allies in the Broader Middle East and 
North Africa (BMENA), is a country "on the move", in the 
throes, albeit unevenly, of change and reform.  Morocco has 
undertaken recent steps to strengthen its abilities to combat 
terrorist financing and money laundering.  Economic growth 
has averaged about five percent per year and investment, 
tourism and remittances have boomed in recent years, although 
the global financial crisis threatens these important sources 
of income.  Slums are coming down, and according to official 
statistics, so is unemployment.  Freedom of the press has 
expanded to a level not seen here ever before and beyond the 
rest of the region, but there are still some restrictions, 
and those who challenge them can suffer heavy fines, libel 
judgments and more rarely, jail.  Political freedoms have 
grown as well, although they remain constrained by a system 
with roots going back hundreds of years.  Neither the 
Parliament nor the 33 political parties with seats in it have 
much power.  Most voters stayed away from the last 
parliamentary election, in 2007, which saw the first 
international observation ever, largely achieved and funded 
by the U.S.  The Government recently agreed with political 
parties on reserving for female candidates approximately 
3,000 seats (12 percent) of local council positions up for 
election in June, an effort we are supporting through 
candidate training.  Additional reforms could lead to 
democracy, but, with stability a priority, it could take 
decades.  Morocco's top priority in foreign relations is 
pursuing international support for its claims to Western 
Sahara.  End Summary. 
 
---------------------------------------- 
Money Laundering and Terrorist Financing 
---------------------------------------- 
¶2.  (SBU) In 2008, Morocco implemented elements of a 
comprehensive anti-money laundering (AML) bill passed in May 
2007 that provides the legal basis for monitoring, 
investigating, and prosecuting illegal financial activities. 
The new law allows for freezing suspect accounts and permits 
the prosecution of terrorist finance related crimes.  The law 
also calls for the establishment of a Financial Intelligence 
Unit (FIU), which is currently in the early stages of 
developing its structure and recruiting personnel.  In fact, 
the formal announcement of its creation is tentatively 
scheduled for April 10, the day of your visit.  U.S. and EU 
technical assistance programs are already providing Moroccan 
police, customs, central bank, and other government financial 
officials with training to recognize money laundering 
methodologies, and the U.S. Department of the Treasury Office 
of Technical Assistance has recently sent a letter to the 
Government of Morocco (GOM) inviting proposals for further 
collaboration. 
 
¶3.  (SBU) Cash-based, informal transactions and remittances 
from abroad fuel Morocco's informal sector.  The monetary 
authorities in Morocco are the Ministry of Economy and 
Finance and the central bank (Bank Al Maghreb), which 
monitors and regulates the banking system.  A key aspect of 
the AML legislation is an increase in responsibility for all 
entities, both public and private, to report suspect fund 
transfers.  Although it will likely take years for the AML 
legislation and FIU to have an appreciable effect toward 
curbing money laundering in Morocco, both are seen as 
positive developments. 
 
¶4.  (SBU) Morocco has a relatively effective system for 
disseminating U.S. Government and UN Security Council 
Resolution terrorist freeze lists to its financial sector and 
legal authorities.  Morocco has provided timely reports 
requested by the UN Sanctions Committee and, as a result, has 
frozen some terrorist-related accounts.  In January, Morocco 
co-hosted with the U.S. Treasury a Targeted Economic 
Sanctions Workshop for North African countries to promote the 
implementation of economic sanctions regimes and awareness of 
the UN 1267 sanctions processes.  Morocco is a party to the 
UN International Convention for the Suppression of Financing 
of Terrorism, and the UN Convention against Transnational 
Organized Crime.  Morocco is a charter member of the Middle 
 
RABAT 00000300  002.2 OF 004 
 
 
East and North Africa Financial Action Task Force (MENAFATF) 
that was inaugurated in Bahrain in November 2004, which 
continues to push for regional transparency and regulatory 
reforms of the financial sector. 
 
------------------------------- 
Economics, Trade and Assistance 
------------------------------- 
 
¶5.  (SBU) The economy is relatively healthy, although marred 
by disparities in wealth.  Growth is expected to be above 
five percent this year, despite the global economic slowdown, 
thanks to anticipated bumper harvests.  Moroccan authorities 
are concerned, however, about the risk of more serious 
impacts on important export, tourism, and remittance earnings 
if the global recession continues.  Since implementation of 
the U.S.-Morocco Free Trade Agreement (FTA) on January 1, 
2006, bilateral commerce has more than doubled.  U.S. firms 
are increasing their investment in Morocco, seeing new 
markets develop as a result of the FTA.  USAID, the 
Department of Commerce's Commercial Law Development Program 
and the U.S. Trade and Development Agency (USTDA) conduct 
technical assistance projects to assist Morocco to create an 
open trading environment and fully develop its potential. 
However, significant export growth to U.S. and other markets 
will also depend on Morocco's ability to capture a larger 
share of "value added" in its export products.  Targeted 
assistance programs from USAID, USTDA and the Middle East 
Partnership Initiative (MEPI) aim at improving Morocco's 
ability to produce and market its exports in key sectors. 
 
¶6.  (SBU) We are focusing our bilateral assistance to Morocco 
on youth and women, targeting four prorities: economic 
growth, counterterrorism, demoracy and governance, and 
supporting quality educaion.  U.S. assistance includes 
projects under th Millennium Challenge Account (MCA), USAID 
and MPI.  In 2007,the U.S. and Morocco signed a five-yer, 
USD 697.5 million MCA Compact to reduce poverty and increase 
economic growth.  The five-year clock started ticking on 
September 15, 2008, with the Entry into Force of the Compact. 
 The MCA will support five major projects selected for their 
potential to increase productivity and improve employment in 
high potential ectors of Morocco's economy:  Fruit Tree 
Productvity, Small Scale Fisheries, Crafts, Financial 
Srvices, and Enterprise Support. 
 
¶7.  (SBU) In Octber, Morocco signed an Advanced Status 
Agreementwith the European Union, which could give Morocco 
complete free market access to the European Econoic Area 
when finally implemented.  It also provies for greater 
coordination on other issues.  Morcco also participates in 
French President Sarkoz's nascent Mediterranean Union. 
 
-------------------------- 
Governanceand Human Rights 
-------------------------- 
 
¶8.  (SBU) Prime Minister Abas El Fassi's government, formed 
after the Septeber 2007 legislative elections, is built on a 
miority parliamentary coalition.  The government, filed 
with young technocrats from within and outsie El Fassi,s 
Istiqlal (Independence) party, has erformed better than many 
expected, and looks capble of a full term despite its 
minority status. Internal democracy is growing within 
political prties.  A political formation founded by Fouad 
Ali El Himma, an intimate of the King, has evolved into a new 
Party of Authenticity and Modernity (PAM) by grouping 
together several smaller parties.  It has now constituted the 
largest political bloc in Parliament and could lead should 
the current coalition falter.  We currently see no prospect 
for a significant shift in Morocco's foreign and security 
policies.  However, neither Parliament nor the Prime Minister 
has much say in these issues, which are managed by the Throne 
directly with concerned ministries. 
 
¶9.  (SBU) Morocco's political parties and the bicameral 
parliament are weak and structurally hamstrung from taking 
legislative initiatives or strongly articulating dissent. 
The Parliament provides no effective check on the monarchy or 
government.  Changing the Constitution would be necessary to 
change the power imbalance and institute formal democracy, 
but both Parliament and parties will likely have to improve 
 
RABAT 00000300  003.2 OF 004 
 
 
their capacity and performance first.  Nonetheless, both 
parties and Parliament have made some technical improvements, 
largely thanks to U.S.-funded programs from the National 
Democratic Institute (NDI) and the State University of New 
York (SUNY), which have modestly improved the body's 
administrative capacity.  These include establishment of a 
budget analysis office, a verbatim transcription service, and 
a consistent forum for training and debate among 
parliamentary members and staff. 
 
¶10.  (SBU) Although the September 2007 parliamentary 
elections were the most transparent in the country's history, 
record low participation, i.e., 37 percent of registered 
voters, reflects the lack of voter confidence in the 
institution.  MEPI financed NDI to run the first ever 
international voting observation.  In January, the Government 
of Morocco reached an agreement with political parties to 
reserve 12 percent of the seats in June,s local and 
municipal council elections, approximately 3,000 elected 
positions, for female candidates.  The Mission is supporting 
a MEPI-funded joint NDI and International Republican 
Institute (IRI) project to train women to effectively run for 
office to take advantage of the opportunity. 
 
¶11.  (SBU) King Mohammed VI has embarked on an ambitious and 
continuous program of human rights reforms that includes the 
Arab world's first truth commission, a revised family code 
and growing governmental transparency and accountability. 
Last year some incidents of concern related to freedoms of 
expression and press occurred.  Although Morocco is a leader 
of reform in the region, the reforms are still not deeply 
rooted in law or the Constitution and could be rolled back. 
Continued support and encouragement from partners like the 
United States and Europe are essential. 
 
¶12.  (SBU) The Moroccan Constitution provides for the freedom 
to practice one's religion, although Islam is the official 
state religion.  The Government of Morocco prohibits the 
distribution of non-Muslim religious materials, and bans all 
non-Sunni Islamic proselytizing, but tolerates several small 
religious minorities.  It also occasionally restricts Islamic 
organizations whose activities have exceeded the bounds of 
"acceptable religious practice" and become political in 
nature.  Morocco is protective of the tiny remnant of its 
once substantial Jewish minority. 
 
--------------------------------------------- -- 
Counterterrorism and Counter-Narcotics Programs 
--------------------------------------------- -- 
 
¶13.  (SBU) Because of its increasingly tourism-dependent 
economy, Morocco remains economically vulnerable to the 
effects of terrorism.  The Government of Morocco's 
implementation of a comprehensive counterterrorism strategy 
emphasizing vigilant security measures, 
counter-radicalization policies, and robust international 
cooperation has been largely successful in containing the 
threat to date.  The threat emanates especially from small 
grassroots radical Islamic cells, which have shown some 
capacity to cause attacks, but there have been no successful 
suicide bombings since the ones outside the U.S. Consulate 
General and the private American Language Center in 
Casablanca in April 2007.  During 2008, the security forces 
dismantled six terrorist and foreign fighter cells and began 
prosecutions of 100 suspected terrorists. 
 
¶14.  (SBU) Under the King, who as "Commander of the Faithful" 
leads Moroccan Muslims and Jews, Morocco has standardized 
religious doctrine, consolidated control over religious 
schools, and sent specially trained imams to Europe to preach 
moderate messages to the Moroccan diaspora.  The vast 
majority of Morocco's population rejects Salafist and 
Wahhabist approaches to Islam and does not support terrorist 
groups. 
 
¶15.  (SBU) The Government of Morocco has achieved significant 
reductions in cannabis and cannabis resin production in 
recent years, although it remains Europe's primary supplier. 
Little, if any, is exported to the U.S. 
 
--------------------------------------- 
Military Modernization and Peacekeeping 
 
RABAT 00000300  004.2 OF 004 
 
 
--------------------------------------- 
 
¶16.  (SBU) The Moroccan Royal Armed Forces are modernizing 
but remain burdened by corruption, inefficient bureaucracy, 
and political marginalization.  The U.S. enjoys a robust 
military relationship, as evidenced by increased 
U.S.-Moroccan military training exercises and Morocco's 
purchase of sophisticated weapons from the U.S., to include 
24 F-16s (a counter to an earlier Algerian purchase of 
advanced aircraft from Russia), 24 T-6 trainer aircraft and 
up to 200 M1A1 Abrams tanks.  These purchases point to a 
likely future reform of military doctrine, along with greater 
prospects for positive engagement with the U.S. 
 
¶17.  (SBU) The Government of Morocco has robust experience in 
the realm of peacekeeping operations dating back to the 
1960s.  It has signed on to Operation Active Endeavor and is 
contributing to peacekeeping operations in Kosovo, under NATO 
leadership.  Morocco also partnered with NATO in peacekeeping 
operations in Bosnia and with the United Nations in Angola, 
Cambodia, Haiti and Somalia.  Current UN deployments are in 
the Democratic Republic of the Congo and Cote d'Ivoire.  The 
Government of Morocco has expressed interest in expanding its 
peacekeeping capacity. 
 
-------------------------- 
Algeria and Western Sahara 
-------------------------- 
 
¶18.  (SBU) The Moroccan relationship with Algeria is 
difficult, and the border between the two countries was 
closed by Algeria in 1994 and remains closed.  While the King 
and other government officials have publicly proposed opening 
the border and upgrading bilateral relations between the two 
countries, their entreaties have been repeatedly rebuffed. 
The Government of Algeria has linked progress on the border 
to "all issues," particularly the Western Sahara. 
 
¶19.  (SBU) Moroccan foreign policy is dominated by defending 
and seeking international recognition of its sovereignty 
claims over Western Sahara.  The issue remains the most 
visible source of tension with Algeria, which has 
historically supported the Polisario's quest for independence 
by way of a UN-sponsored referendum.  The issue led Morocco 
to leave the African Union and has been an obstacle to 
regional integration through the Arab Maghreb Union.  In 
April 2007, Morocco proposed a new autonomy plan for Western 
Sahara, and a series of UN-sponsored negotiations with the 
Polisario began in Manhasset, New York.  The Moroccan 
proposal, deemed "serious and credible" by the U.S., would 
provide Sahrawis, the indigenous people of Western Sahara, 
autonomy in administering local affairs while respecting 
Moroccan sovereignty over the territory.  There have been 
four rounds of talks but none since March 2008.  After the 
April 2008 renewal of the mandate of the UN peacekeeping 
mission, the U.S. announced it considered independence for 
the territory "not realistic."  Following the controversial 
lapsing of the contract of the former UN Secretary General's 
Personal Envoy, the UN selected retired U.S. Ambassador Chris 
Ross to be the new Personal Envoy. 
 
¶20.  (SBU) Western Sahara experienced gross violations of 
human rights from 1975 until the end of King Hassan II,s 
regime in 1999, and repression intensified after the 
short-lived Sahrawi "intifada" of 2005.  Since late 2006, 
Morocco has slowly improved the human rights situation in the 
territories.  Arbitrary arrests have sharply diminished, and 
physical abuse by security forces had all but disappeared 
until early 2009.  Even dissenters now can travel freely. 
They cannot, however, publish or speak publicly in support of 
independence, or a vote on self-determination.  In 2008, some 
known abusers were transferred, further easing the situation. 
 
 
***************************************** 
Visit Embassy Rabat's Classified Website; 
http://www.intelink.sgov.gov/wiki/Portal:Moro cco 
***************************************** 
 
Jackson