Morocco Leaks: US Slams Intellectual Property Violations, Smuggling, Price Controls, Tax Issues, and Market Access Barriers

AmCham Morocco leads business mission to Washington, D.C., highlighting investment opportunities and addressing market concerns

Embassy of the Kingdom of Morocco
Washington, D.C. (SBA) .
Washington, April 28, 2014

HIS EXCELLENCY THE MINISTER OF FOREIGN AFFAIRS AND COOPERATION
– RABAT –

PRIMARY RECIPIENT: CAB1-CAB2-5G /4-DG 9/2
CC RECIPIENT: DG7/6
TRANSMISSION: Normal/SMES

SUBJECT: Business Mission to Washington by AmCham Morocco.

REF: M/F No. 155-14 dated April 18, 2014.

Following my dispatch referenced above, I have the honor to inform you that the American Chamber of Commerce in Morocco (AmCham) organized a business mission to Washington (Door Knock Mission to Washington) from April 21 to 24, 2014, with the aim of promoting issues of interest to the Chamber’s members to officials of the American Government, Congress, and American employer and professional organizations.

During the various meetings, the President of AmCham Morocco, Mr. Walter Siouffi, highlighted the reforms implemented by Morocco, the available business opportunities, as well as our country’s role as a hub for Africa. He also emphasized the need for his Chamber’s members to identify American partners in order to boost trade and investments on both sides. Mr. Siouffi also mentioned the project of an incubator for exports to the United States, which is being set up by AmCham with the help of the United States Agency for International Development (USAID).

The AmCham mission was an opportunity to raise awareness among American officials (the Departments of Commerce and the Treasury, the Office of the United States Trade Representative, the Congress) about the grievances of American companies in Morocco regarding issues of intellectual property rights enforcement, smuggling, price controls, taxation, and market access. The main problems discussed are as follows:

The use of pirated Microsoft software by Moroccan government institutions (67% of computer software used in Morocco is said to be pirated);

The use by a Moroccan company contracting with the Departments of Interior and Transport of a pirated Oracle software solution in the context of a contract for the supply of national identity cards and driving licenses. The damage is estimated by Oracle at 2 to 4 million. All parties concerned are said to be aware of this problem.

Counterfeiting, particularly for hygiene products and batteries. In this regard, the company Procter & Gamble regrets the weakness of the enforcement of the existing legal framework (weak seizures in ports and at the market level, the need to destroy seized goods);

Smuggling: Phillip Morris believes that this problem is due to the large price difference for tobacco between Morocco and Algeria;

Price controls, particularly for the pharmaceutical and tobacco industries. Representatives of the pharmaceutical industry raised issues related to the drop in the price of certain medicines in Morocco. They indicated that they had agreed with Mr. Moulay Hafid Elalamy, Minister of Industry, Trade, Investment and the Digital Economy, during their meeting on March 10, 2014, on the sidelines of the 2nd Morocco US Business Development Conference, to sign a memorandum of understanding on the promotion of the Pharmaceutical Industry in Morocco.

Taxation of manufactured tobacco;

Market access, particularly with regard to the distribution of tobacco (6 distribution license applications are still pending at the Department of Industry and Commerce).

The AmCham delegation also expressed the desire to see Morocco and the United States conclude a totalization agreement that would allow American companies to avoid double payment of social security charges in both countries and to be able to employ in Morocco American professionals with specialized skills who have passed the retirement age in force in the Kingdom (60 years).

It should be noted that the two round tables organized at the United States Chamber of Commerce and in the Washington offices of Citi Bank were very well received because they provided an opportunity to present direct testimonies from American companies established in Morocco. In this regard, the testimonies of the President of AmCham and Ms. Julianne Furman, CEO of Polydesign Systems and Vice President of the Moroccan Association for the Automotive Industry and Trade (AMICA), on her experience in the Tangier Free Zone, were particularly appreciated.

The officials of the Zenata Development Company took the opportunity to promote the investment and partnership opportunities offered by the « Zenata Eco City » project, both in each of the meetings planned in the program and through B2B meetings with universities and American companies in the health sector.

This first mission of its kind since the establishment of AmCham Morocco in 1966 was very positive in that it highlighted the business opportunities in Morocco and established a frank dialogue with institutional partners in Washington. The principle of an annual AmCham mission to Washington was also agreed upon with the organizers.

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