Virtual Magazine of Morocco on the Web
Morocco Week in Review 
October 1, 2005

USS GUNSTON HALL (LSD-44) drops anchors in Agadir.
USTDA AWARDS GRANT FOR GIS PROJECT IN MOROCCO.
Morocco gets ID cards on the cheap: So why is the UK preparing to spend tens of billions on much the same thing?
Morocco inspires literature in the West.
Archaeology Prehistoric skeletons found in cave near Oujda, eastern Morocco. 
Euro 30Mn EIB loan to finance small and medium-size enterprises in Morocco.
High Insulin Prices in Morocco
Assessing Morocco's Family Law
The Mechanization of the Moroccan Farms is Still Behind the Norms
Business Environment: When Corporate Fraud Fuels the Informal Market in Morocco: Some Tricks Used by Moroccan Businesses.

USS GUNSTON HALL (LSD-44) drops anchors in Agadir.
Agadir, Sept. 26

The USS GUNSTON HALL (LSD-44) dropped anchor, here Sunday, to volunteer in actions in favor of a charity, dubbed the Islamic Charity Association. US General Consul in Morocco, Douglas C. Greene said the visit aims to consolidate Moroccan-American relations, underling that the voluntary action is a sign of good intention vis-à-vis Moroccan children. Soccer and basketball matches between the navy crew and children of the association are part of the program. Founded in 1960 after the earthquake that hit the southern city of Agadir, the Islamic Charity Association hosts 225 children whose age is ranging between 5 to 18 years.  The association takes in charge abandoned and poor children who aspire to pursue their secondary studies.
http://www.map.ma/eng/sections/social/uss_gunston_hall_ls/view 
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USTDA AWARDS GRANT FOR GIS PROJECT IN MOROCCO.
RABAT, MOROCCO - Sept. 27 2005 Press Release - U.S. Trade and Development Agency

The implementation of a national Geographic Information System (GIS)-based information management system to improve Morocco's exploration and production of oil, natural gas, hydrocarbon, and other minerals is the goal of a U.S. Trade and Development Agency (USTDA) grant that was awarded today to the Office National des Hydrocarbures et des Mines (ONHYM) of Morocco.

Enrique Ortiz, Senior Commercial Officer at the U.S Embassy in Rabat Enrique Ortiz and Director General Amina Benkhadra signed an agreement on behalf of the U.S. government and ONHYM, respectively, to officially confer the grant award. The $115,000 grant will be used to fund the cost of a technical assistance program to support the implementation of a project developed in a previous USTDA-funded feasibility study.

In 2002, USTDA provided a $399,880 grant to fund a study on a GIS and related information technology (IT). Computational Geosciences, Inc. of Norman, Oklahoma completed the study in 2003. ONHYM is now planning to proceed with the procurement of equipment based on the Study's favorable findings.

ONHYM has initiated work on various recommendations in the study, including data collection, and hardware and software acquisitions and upgrades. ONHYM requested USTDA support in implementing the study's recommendations for a modern GIS-based IT project for petroleum and natural gas exploration and production in Morocco. The USTDA grant awarded today will fund technical assistance to ONHYM on the procurement process for the project, and will include training for operation and maintenance to ensure the system is properly implemented.

The opportunity to provide the technical assistance will be competed on the Federal Business Opportunities website. Interested U.S. firms should submit proposals according to the instructions contained in the Federal Business Opportunities announcement. ONHYM will select the U.S. contractor that will provide the technical assistance.

The U.S. Trade and Development Agency advances economic development and U.S. commercial interests in developing and middle-income countries. The agency funds various forms of technical assistance, feasibility studies, training, orientation visits and business workshops that support the development of a modern infrastructure and a fair and open trading environment. USTDA's strategic use of foreign assistance funds to support sound investment policy and decision-making in host countries creates an enabling environment for trade, investment and sustainable economic development. In carrying out its mission, USTDA gives emphasis to economic sectors that may benefit from U.S. exports of goods and services.
http://www.harolddoan.com/modules.php?name=News&file=article&sid=6131 
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Morocco gets ID cards on the cheap: So why is the UK preparing to spend tens of billions on much the same thing?

The news that the Moroccan national security service (Direction Générale de la Sécurité Nationale) is to 124 million euros on a smartcard identity system for its 20 million citizens, isn't normally the sort of news to hold a front page. The system from security company Thales is pretty much identical to the one the UK government has been battling to convince people should be introduced, and which the country's Home Secretary Charles Clarke spent valuable time promoting at this week's annual Labour Party Conference.
"ID cards are controversial, of course, but we all need to understand that we already live in a society where there are enormous databanks of information about all of us, whether held by financial institutions, employers, passports and driving licences, health and education authorities or criminal justice agencies," he was reported as saying by The Daily Telegraph newspaper. He urged people to support the bill that would make their carrying compulsory.

The UK scheme is admittedly three times the size of the Moroccan scheme, but that doesn't fully explain why they can apparently have a functioning system of biometric ID cards for a fraction of the £10 to £15 billion (($19-$30 billion) it has been estimated the UK will end up spending on its system over the next decade. Some say the final bill could go as far as double those figures, once the inevitable delays, technology bugs, and general muddle have been factored in. We've been assured the UK system will be wonderfully complex - and have multiple uses - so it goes without saying that means expensive. UK governments a long-cultivated record of serial incompetence when it comes to combining those two great opposites of government and technology, but perhaps someone, somewhere has just got their sums wrong.
http://www.techworld.com/security/features/index.cfm?featureid=1831 
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Morocco inspires literature in the West.

Author Paul Bowles was born in New York, in 1910, but made of Morocco his own country and also the setting for his literature work. He gained renown with the book 'The Sheltering Sky', transformed into a movie in the beginning of the 1990s. In Brazil, other books by Bowles, like 'Let It Come Down', were printed by publishing house Rocco in 1997 and are an on-going success in the bookshops.

Isaura Daniel*
São Paulo - The scenery is the Sahara. The decade, the 1940s. Three western friends roam around small Moroccan cities and villages trying to find answers to their internal anguishes. The couple Port and Kit and their friend Tunner are characters of "The Sheltering Sky", the most popular novel by the North American writer Paul Bowles. The author was born in New York, USA, but great part of his literary work is set in Morocco, country he adopted as his own and where he lived for 52 years.
Some of Bowles' novels were published in Brazil by the publishing house Rocco in the 1990s. To this day, however, they are sold in bookshops and have a legion of fans, especially amongst those who sympathise with the beat generation, movement from the 1950s that believed in the itinerating life.

Bowles was born in 1910 and died in November 1999, at the age of 88, in Tangiers.

In "The Sheltering Sky" three Americans, Port, Kit and Tunner, discover amongst the inhabitants of the little cities of Morocco a civilisation of characteristics different from those of the Western. Staying in cheap bed and breakfasts and travelling in precarious modes of transportation, the characters hold individual conversations with their own souls. It is in this environment that Kit is lost in the desert and starts living amongst a sultan's odalisques until she is rescued back to her country. The book, launched in 1949, was transformed into a film in the beginning of the 1990s by the Italian director Bernardo Bertolucci.

As well as "The Sheltering Sky", the publishing house Rocco printed in Brazil the novel "Let It Come Down", and shorty-story books "Tea in the Mountains" and "A Friend in the World". In "Tea in the Mountains" the stories are set in North Africa and also in the interior of Mexico, where Bowles lived for a while. In an article in Brazilian magazine 'Isto É', the Brazilian critic José Castello describes Bowles as a person in love with deserts, desolate sceneries and febrile spirits.

In "Let It Come Down", Bowles approaches the cultural shock lived by Morocco in the 1950s, while the French and Spaniards tried to dominate it. The lead character in the story, Dyar, decides to abandon New York and sets off to live in North Africa, amidst this chaos, in the search of a more natural life. "Let It Come Down", also written while the author lived in Morocco, was published in 1952.
Bowles became known for his novels, but was also a composer and poet. The musical works were created, in great part, between the 1930s and 1940s.

"Sonata for Two Pianos" and "Concerto for Two Pianos" are his. The author, who learned how to play the piano while he was a child, composed more than 10 songs. In his curriculum are also, as well as four novels, nine short-story books and three poetry books.
*Translated by Silvia Lindsey
http://www.anba.com.br/ingles/noticia.php?id=8670 
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Archaeology Prehistoric skeletons found in cave near Oujda, eastern Morocco. 
By Susan Searight-Martinet. 9/27/2005 

A team of Moroccan archaeologists working in the well-known Grotte des Pigeons cave at Tafoghalt, near Oujda, have recently brought to light human remains dating to around 11,000/12,000 BC, MAP news agency announced Monday. This cave was first excavated in 1950 and indicated an occupation starting about 21,000 years ago by a population physically different from Morocco's earlier inhabitants.

Luckily for the archaeologists, these people buried their dead in the cave. More than 200 individuals have been revealed during the long-standing excavations, including nearly 100 children.

New research, taken up in 2003, has pushed back the dates of the early occupation of the cave to more than 100,000 years. But the fresh discovery adds an unusual dimension to the burials: one of the skeletons had been buried with the horns of a Barbary sheep. This animal was very plentiful in the mountainous regions surrounding the cave and was certainly hunted by these early populations. The fact that its horns were buried with a skeleton will allow a better understanding of the funeral rites practices by these early Moroccans. Stone and bone tools were also found beside the buried bodies.

An earlier study had shown that these people cared for their handicapped: after a serious accident, resulting in the total loss of one arm and the almost total loss of another, one woman nevertheless managed to live to an advanced age. This showed that these cave dwellers did not throw out a useless mouth but even looked after an impotent woman for many years.

The discovery is part of a research programme directed by the National Institute for Archaeological Sciences and Heritage (INSAP) in cooperation with Oxford University. The new series of excavations started on Sept.5 and will continue until the end of the month.

The new research in this cave is part of a vast programme of prospection and recording of archaeological sites in the lower Moulouya valley. For instance, a series of sites, which are much younger than the skeleton-holding cave, have been discovered containing stone tools, pottery and ostrich eggshells. The ostrich eggshells have been dated to around 5,500 BC by the Laboratory of Technical and Scientific Analyses of the Royal Gendarmerie in Temara, using the radiocarbon method.

MAP news agency added that investigations will continue in Ghafas, another Oujda cave, with a view to producing a precise chronology of the prehistoric human groups living in eastern Morocco several thousands of years ago.
http://www.moroccotimes.com/paper/article.asp?idr=11&id=9975 
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Euro 30Mn EIB loan to finance small and medium-size enterprises in Morocco.
Casablanca, Sept. 30 

The European Investment Bank (EIB) on Thursday extended Euro 30 million loan to the Moroccan bank "Banque Marocaine de Commerce Exterieur (BMCE) to finance small and medium-size enterprises in the medium term. The loan will support Moroccan efforts to boost its economy, said de Fontaine Vive, Vice-President of the Euro-Mediterranean Investment and Partnership (FEMIP), adding that the institution will reinforce funding Moroccan small and middle-size enterprises notably in the tourism sector. The EIB also signed on Wednesday with the Moroccan financial institution "Caisse de Depôt et de Gestion" (CDG) and the French Holiday Group "Club Med" an agreement wherein the European institution will contribute Euro 5Mn to the Tourism Investment Fund in Morocco.
http://www.map.ma/eng/sections/box3/euro_30mn_eib_loan_t/view 
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High Insulin Prices in Morocco

Moroccan diabetics spend a great deal of money on insulin. This is because pharmacists charge exorbitant prices to protect their high margins. Their pricse are three times or more what drug manufacturers charge. In Morocco, a sizeable portion of the insulin market is subject of government regulation as drugs makers sell more than half of their products to the state through a tender process. As part of this process, public hospital inpatients are fully covered and do not pay for the insulin, but as soon as they walk out, they face a supply chain where prices make no sense.

On the supply side, two companies are involved in the Moroccan market. They are Laprophan, the representative of the Danish Novo Nordisk, and Sothema, the representative of the American Eli Lilly. While Laprophan imports its insulin for the Moroccan market, Sothema produces it locally. Tthe two compete against each other in a tough competition for the state and private markets. When tenders are issued by the health ministry, the two compete ferociously for a market estimated at one million doses annually. The value of that market is about MAD 55 million, representing a unit price of MAD 55 per dose. Analysts at the health ministry say drugs companies make healthy profit margins, estimating that their cost to produce and deliver a single dose is MAD 40.

But while the economics on the supply side makes sense, the retail portion of the insulin chain in Morocco is a little more complicated. The single dose of the Sothema insulin at the retail level is sold at MAD 166. The Laprophan equivalent is sold at MAD 196.70. An executive at Sothema says "contrary to the public market, our price is MAD 104 per dose when marketing to the private sector. Wholesalers add a 10% margin and retail outlets boost their margins by 30%."

The executive added "the low prices we offer in state contracts are due to the fact that volumes are high enough to justify those prices." Indeed, official government sources indicate that state orders, in volume terms, account for more than half of the total market. There are some one million diabetics in Morocco, with about 11% of them entirely dependent on insulin.
Despite these numbers, the high prices of insulin in retail have been a source of tension among the patients, with is a 100% markup compared to the original price at the manufacturers' level.

For now, local manufacturing is likely to remain the domain of Sothema, despite signals from Laprophan that it will engage in production within Morocco. Boosting production capacity within Morocco could help drive prices down, but there are no clear indications on when Laprophan will begin producing there.

Apart from these two companies, other pharmaceutical firms have been envisaging their involvement in production in Morocco. Among them is Polymedic, a local firm that has been in talks with an unnamed British drugs company for the purpose of manufacturing in Morocco. But until then, Moroccan diabetics will continue to pay high prices for their drugs.
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Assessing Morocco's Family Law

Months since its promulgation, and the implementation of the Moudawana appears rather sketchy. Experts, however, warn that assessing the implementation of this package of social and civil rights rules after only nine months since its promulgation may not be the right thing to do. But it has also been a year now since the young Moroccan King laid out his vision on the necessary social changes in his October 10, 2003 speech, and an assessment is indeed in order.

Although there are no statistics yet as to the impact of the Moudawana, there is clear evidence of the lack of respect to the new law in a great number of cases. Repudiations, marriages of women of less than 18 years of age, and the immense difficulties for women to obtain their rights, in particular when filing for divorce are indicative of a law that is facing resistance in its execution.

These cases reported by civil and women's rights activities are really troubling to the points that skeptics see the King's statements of last year and the new law itself as just window-dressing aimed at getting praises from rights activists worldwide.

Though activists quickly blame the judges for being the main sources of resistance, a senior justice ministry official, Mohamed Labidi says it is just a matter of time before the law enters into full force. To push for the implementation of the law, the department of the family in the Moroccan government has increased the number of seminars and meetings on the topic and has recently established an information and research center called Centre Marocain d'Information et d'Etudes sur la Femme. It hopes the center will contribute to a better understanding of the issues surrounding the family law in an effort to increase awareness on the importance to changing the perceptions in the general public and those assigned to interpret and enforce the law.

The law gives judges added power and more discretion when dealing with family-related conflicts. As such, the judge is the most important officer to uphold the law and apply the regulation in matters of marriages and divorces, as well as other matters that could occur when conflicts arise in families. Judges, for example, are the ones who determine the value of alimonies. They have the power to grant separations and divorces upon the review of evidence provided to him by any party in the marriage. "But like all other humans, judges make mistakes and may have problems in the interpretation of the law," added Mohamed Labidi.

And indeed he is right in this case. There are at least 160 reported legal cases that have been referred to the ministry of justice for additional clarification. They are cases of jurisprudence as they are the first such cases to be treated since the enactment of the law. The issue is even more complicated for judges operating abroad who are appointed to handle cases of the expatriate community. The law was written in the Arabic language and has not been translated into French, which makes implementation challenging.

Although it has been only nine months since the Moudawana was amended to give more rights to women and introduce a more balanced approach in dealing with issues affecting genders, parents, and children, a comprehensive review on the issue of implementation is critical if Morocco wants all its citizens to feel equal.
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The Mechanization of the Moroccan Farms is Still Behind the Norms

In Morocco, there are some 1.4 million farms. They are mostly small scale operations with limited mechanization and still relying on the ox and the swing-plough. Despite a series of programs aimed at introducing mechanization, the Moroccan farms still use old techniques.

Today, there are an estimated 43,226 tractors used in the coountry, according to a survey conducted by the agriculture ministry. Most of these vehicles, which are also in advanced decay, are owned by some 35,602 farms only. Some 14% of these tractors are in the hands of the very small operations of between 1 and 5 hectares, although they account for 60% of all agricultural land, or 2 million hectares. That would represent one tractor for 381 hectares. The ratio is less drastic among operations that boast more than 5 hectares. But it still represent 1 tractor for 136 hectares of arable land. The number of farmers who use tractors amount to an estimated 675.000, or 47% of the total farming community. But the ratio varies depending on the size of the farm. It is 37% in farms that have less than 5 hectares.
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Business Environment: When Corporate Fraud Fuels the Informal Market in Morocco: Some Tricks Used by Moroccan Businesses.

Use of false papers, fraudulent declarations, unrecorded transactions, and illegal transfer of hard currencies to foreign bank accounts are few of the techniques some senior managers in Moroccan companies have been using to enrich themselves and defraud clients, suppliers and the government. In 2003 tax authorities collected MAD 2.4 billion of unreported taxes and contributions to the various funds such as the social security and retirement fund, following investigations of many companies. This number is apparently just the tip of the iceberg as audits and control of company books are not comprehensive or systemic. The existing control process is still largely symbolic and insufficient to deter offenders at a wider scale.

There are no statistics and official data on the scope of fraud and corruption in the Moroccan corporate world, but it is well and alive and their practice is widespread. The problem is so deeply rooted that even world-renowned accounting firms refuse to testify or even provide their opinions in anonymity, citing ethics and respect for their clients' confidentiality. In the tax world, evasion is so serious that it is believed that only some 20% of the companies follow the rules of clean money as mandated by the law. Therefore the vast majority uses whatever loopholes to avoid paying taxes and defraud so many others around them as they can.

Tax evasion is the most visible element of an arsenal of tools used by companies and their managers to defraud tax collectors, their partners, customs, the social security administration, the foreign exchange office, the retirement fund, shareholders, workers, customers and other victims.

Fraud is the result of a combined lack of ethics and limited oversight on corporate activity. It is facilitated by the existence of a dense channel that allows offenders to move merchandise and money through the black or gray markets, and to purchase and sell semi finished and finished goods without any record for the transactions. The informal sector itself, whether moving merchants, stores, or well-known informal markets like Derb Ghallef and Derb Omar fuel both fraud and the informal sector because products end up distributed through these sites.

But even for many of the company executives who wish to abide by the law, it is virtually impossible to avoid dealing with corruption when the chain in which he or she operates is corrupt at the upstream and downstream. But while it is easy to characterize corporate bosses as victims, there is more than eyes can see in this vast ecology of corporate corruption and fraud, and business leaders share important responsibilities in perpetuating this state of affairs.

Corrupt executives take advantage of loopholes in the system, including workers fears to ask for their basic rights as required by law. While cheating state agencies such as those in charge of retirement, training and tax collection, they also cheat their workers who avoid confrontation because of the need to keep their jobs. Fearful employees are cheated from overtime and employer's social security and retirement contributions.

Despite the assurances of financial auditors that the largest corporations are clean thanks to the accounting audits conducted by independent experts and the subsequent certification of their books, many in Morocco say even large companies are not exempt from corrupt practices. But in these large companies fraud is indeed less frequent than in other sectors of the economy, where business entities are intricately embedded in the informal sector with its distributions circuits and supply chains.

In Morocco not more than 3,000 enterprises are required to certify their books. This certification requirement is mandatory for companies that meet two conditions. They have to have the corporate (Societe Anonyme) or limited liability partnership status (Societe a Responsabilite Limitee - SARL) and must generate more than MAD 50 million in revenue. The other companies are free from any form of financial reporting and escape any form of oversight. Still despite a financial oversight, many of the 3,000 companies that must undergo an audit practice fraud, tax evasion and other white-collar crimes that inspectors cannot easily detect.

However, it is also important to note that major steps have been made in Morocco in the past 20 years to limit fraud in companies and results have been remarkable with a steep decline in cases. Compared to corporate practices of the 1980s, the various plans aimed at reforming the business environment with changes in the corporate status, trade code, and tax regime, among other changes, have led to a much cleaner corporate world. Changes also in the legal status of the corporate executive making him directly liable in case of financial wrongdoing have led to much more prudent CEOs and their staffs.

The following cases come from testimonies of executives as reported in the Moroccan press. The witnesses and their companies they work for have been kept anonymous.

This particular company operates in the textile industry and the witness was its outside accountant. The company was a unit of a large conglomerate well known in the business world in Morocco and abroad. Despite its status and size, conducting part of the business without records was a norm. The witness speaks of how the company conducted sales some five years ago. Then some MAD 20 million were generated from the sale of textiles in the black market where nothing was recorded and no income was reported. Although MAD 20 million may not be that high, it accounted for between 10% to 15% of total sales. Interestingly, a great portion of unrecorded sales was generated as exports. Exports amounted to an average of 40% of the company's total black market activity each year. The company sold its products to a dealer in eastern Morocco, who was then moving the textiles across borders into the Algerian market as contraband. All of the transactions occurring between the company, the middleman and the final buyers in Algeria were conducted without any traces or documentation.

These activities were not widely known in the company. In fact, only a very few knew of them and were active players in building and maintaining the channels. To afford conducting to what amounted to illegal sales, all of the purchases of raw materials and their transport and all other peripheral operations were also conducted outside of the radar screen, paying in cash and keeping the information secret. Workers too were paid in cash and never received a pay stub.

Their scheme was so elaborate that the executives behind it were able to elude controllers who have been using power consumption as a measure of industrial activity to assess the company's work level. For these unreported sales, the perpetrators used refurbished gasoline-powered generators acquired in cash from the second-hand market. Gasoline was also purchased in cash so as to avoid any paper trail that would lead inspectors to uncover the scheme.

This business was directly supervised by the subsidiary's general manager (GM), who controlled the proceeds in a separate fund. This fund was used to finance underground activity, including bribery payments. The witness reported that when an inspector showed up, the general manager always managed to negotiate a way out of an in-depth inventory and audit. Bribery was used to keep the inspector's curiosity at bay.

Each month, the outside accountant was handed over by the GM the papers he wanted to include in the official trail. Other specific documents were purposely omitted. During a business trip, the GM requested an aid to file the usual documents to the ourside accountant's office. Unaware of the selection process that the documents undergo before submission, all of the paper forms, including the ones that are usually removed, were given to the outside accountant. This latter discovered that the income value generated during that month was three times higher than the usual volume of business reported by the GM.

The service industry has also found ways to embark into fraudulent activities. For example some hotels are known to under-report room sales and when those sales must be reported because of tourist tracking procedures in Morocco, the tourists are reported as travel agents who "are" prospective business for the hotel. This insures that the rooms that have been booked were reported properly but without any sales transactions. The hotel manager issues false invoices and money is paid in foreign accounts denying tax authorities the capacity to investigate accordingly.

Use of training to get money back from the government is one of the latest tricks in the book. The state occupational training agency OFPPT reimburses companies that arrange educational sessions for their workers. But many companies have been able to create training-related invoices for non-occupational activities such as information system services that require a half-day training. In one specific case, OFPPT unknowingly reimbursed a company all of its spending on IT equipment, software, services and training. The OFPPT is now more aware of these tricks and has stepped up inspections, including interviewing the trainees and conducting spot checks.

But the companies perpetrating these acts have also learned to adjust. Spot checks are countered by on-site course simulations, so when an inspector of OFPPT shows up, the company can put together a class room together in no time so it appears to be in session.

Companies are also keen on avoiding tax payment. The IS tax in Morocco is exempt for companies that export for a period of five years. To perpetually take advantage of this incentive, many companies transform themselves into a Holding status by creating specialty subsidiaries in form of limited liability partnerships, one or many of which would focus on export. When the five-year period ends, the export unit is discontinued and a new one is established, thus re-establishing the 5-year tax break for a new entity. No one complains because the employees would have signed a contract, which stipulates that they can be transferred to any other subsidiary at the discretion of management.

In the same time, the companies that slice their business into subsidiaries end up keeping trade unions at arm's length. Since the law requires companies to incorporate a union delegate in the decision-making process in organizations that have more than 100 workers, subsidiaries in many holdings do not exceed 99 employees.The same company can be owned by an individual who lives abroad and receives tax-exempt checks in an offshore bank account.

Loopholes in the movement of merchandise under the current customs regime are abundant. For example many companies have been taking advantage of the temporary admission of raw materials and semi-finished products allowed under Moroccan law. These products enter the country on the temporary basis to be re-exported as finished goods and are therefore exempt from the usual import tax. A manager at a cloth manufacturer reports that loses of materials during the manufacturing process accounts for 1% to 1.5% of the temporarily admitted products but are reported to customs authorities to account for 5% to 6%, ratios that generally would not trigger a great deal of suspicion. Textile companies are equipped with the latest and most sophisticated software and hardware to minimize losses and maximize gains in a highly competitive business. In the case of this particular company, what escapes customs and not re-exported ends up in the domestic informal market.

In textile, volumes matter. And in many cases the same quantity of a specific textile weighs more than another textile, requiring more material to treat it. And that's how some companies play with volumes to elude customs and avoid tax payment. For example one meter of Jersey weighs 50 grams and a meter of Interlock weighs 90 grams. When importing Jersey a company would report Interlock so it can order more material than it needs for its operations. The extra materials and consumables like the zippers and buttons it ordered would be kept and distributed to the domestic market without any control.

Labor is also an area that many companies have abused for fraudulent purposes. To avoid paying the required contributions on full-time employees, companies hire temporary workers, file the non-renewal form a month later but keep the workers on staff in the following month. They then re-hire them in the third month, again on the temporary basis to "officially terminate"
them in the fourth month before re-hiring them again in a cycle that appears legal but that is in reality a loophole aimed at cheating the system. With today's labor law, companies have switched to reporting new hires as trainees, as it is financially more advantageous to classifying them as such. One human resources manager says that "instead of a reporting a temporary worker at a pay of MAD 1,500 per month, which will end up costing me MAD 2,500 due to the new law by adding the various contributions, I report the new recruit as a trainee. This one would cost me MAD 2,000 top."
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