On March 24, the Moroccan government published laws no. 2.20.292 and no. 2.20.293 related to special measures of the public health state of emergency, enacting a lockdown and allowing the government to take special measures. As stated in Article 5 of the law no. 2.20.292, “The government may, if absolutely necessary, exceptionally take any urgent economic, financial, social or environmental measures which would contribute immediately to responding to the negative effects of the declared state of emergency.”

A stimulus package of more than 10 billion Moroccan dirhams (MAD) (over one billion dollars) was also issued to help primarily small and medium businesses get through this difficult time, but also to provide needed medical equipment. The law no. 2.20.292 also suspended all legal deadlines except for appeal deadlines for criminal charges or for the period of custody.

This stimulus has seen exponential growth since other major Moroccan telecommunications companies, the national phosphate company and others have donated to the special fund to help stop the spread of the virus and finance medical staff and equipment.

Economic and tax measures taken by the government:

As part of a precautionary approach and taking into account the impact of the coronavirus pandemic COVID-19 on economic activity, the Economic Watch Committee which is part of the Moroccan Ministry of Finance, adopted on Monday, March 16, a tolerance measure according to which companies whose turnover is less than 20 million MAD, can if they wish, benefit from the deferral of tax declarations and the payment of tax, from March 31 until the end of June.

The postponement of deadlines relates to the following requirements:

·       The declaration of the tax result;

·       The additional corporate tax due for the 2019 financial year;

·       The 1st installment due for the current financial year.

All companies concerned automatically benefit from this deferral without any particular formality. The turnover declared for the 2018 financial year is the basis for such deferral.

In the case of companies with a turnover of 20 million dirhams or more, which suffer economic damage due to the drastic decline in activity and find themselves facing financial difficulties, may request Minister of Finance or the person delegated by him for this purpose, a benevolent measure allowing them to benefit from deferral or deferral of tax payments.

Benefitting from these measures is subject to an individual review of each request, taking into consideration the circumstances invoked and the elements justifying the situation and the financial difficulties of each company.

To this end, regional managers are invited to assess with particular care and great attention, on a case-by-case basis, requests for deferral made by defaulting companies in terms of obligations relating to the payment of tax, in order to reasonably grant the appropriate concerning measures.

Energy related measures:

The Minister of energy Mr Azziz RABBAH has assured that all the necessary measures have been taken to tackle the pandemic and secure the flow of energy in the country.

Mr. RABBAH, also affirmed that ONEE (National Water & Electricity Company) has large electrical capacities to be able to regularly supply the national network, thus mentioning the experience developed by ONEE in the field of maintenance of installations and diversification of partners for the supply of the country, without forgetting the expertise accumulated by the delegated managers to assure the electric supply to the citizens and the various economic actors.

Regarding strategic infrastructure in the electricity and drinking water sectors, in particular the national electricity dispatching, power plants and drinking water production units, a national watch committee, coordinated by ONEE and bringing together its partners in the production of electricity in concert with the managers of its Electricity Branch, its managers of drinking water production units and its Directors, was set up with a view to implementing an integrated and participatory approach for combating the effects of the COVID-19 pandemic, in order to ensure the continuity of the country’s public service supplying electricity and drinking water while protecting their human potential.

In this regard, dedicated task forces have been created within each facility and actions are coordinated in order to be able to respond jointly to this crisis, through the establishment of a Continuity Plan of Activity within each facility. This Plan has several phases which are deployed according to the evolution of the situation.

Banking related measures:

Bank Al Maghrib (Moroccan Central Bank) issued the 29th of March a press release regarding the measures being taken to curve the economic pressure related to the COVID-19 virus on the economic stakeholders and households.

Bank Al-Maghrib adopted a set of new policy measures to support access to bank credit for the benefit of both households and businesses.

This system will triple the refinancing capacity of banks with Bank Al- Maghrib through the following measures:

·       The possibility of banks using all of the refinancing instruments available in dirhams and in currency;

·       Extension to a very wide range of titles and effects accepted by Bank Al-Maghrib in consideration for refinancings granted to banks;

·       The extension of the duration of the refinancings;

·       Reinforcement of its specific refinancing program for the benefit of the very small, small and medium businesses, integrating, in addition to investment credits, operating credits and increasing the frequency of their refinancing.

Bank Al-Maghrib is also taking measures to support financial institutions’ credit covering liquidity, equity and provisioning of receivables in order to strengthen the capacity of these institutions to support households and businesses in these exceptional circumstances.

Bank Al-Maghrib will also continue to closely monitor the economic implications of the national health crisis and the financial system and will take, if necessary, exceptional initiatives to curve the pandemic.

Public procurement related measures:

A multitude of measures have been taken by the Minister of Economy, Finance and Administration, and are form was published by a ministerial circular dated  March 31, 2020 regarding the support measures in place for public entities and public enterprises (PEE) to ensure flexibility in their management during the state of health emergency period in relation to the corona virus pandemic “COVID-19”.

These measures are related to the budgets of PEEs for the 2020 financial year, the commitment of investment and operating expenses, the payment of expenses of public establishments subject to prior and specific controls, the accounts of public entities in the year of 2019, in addition to the exceptional measures regarding the conclusion and execution of contracts, as specified by the Minister in this circular.

Thus, PEEs whose budgets have not been adopted by their governing bodies, before the date of the bill, are authorized to continue to incur their expenses, adding that the ministry’s administration department will take the necessary measures to proceed with the approval of the draft budgets as soon as they are transmitted by the bodies concerned or provide approvals on  projects by electronic means and pending the appropriate conditions needed by the governing bodies which have all the power to adopt such budgets or make changes if necessary.

In addition, the Minister indicates that the authorizing officers of the PEEs can adopt, under their responsibility, the procedure of allotting the expenses which they consider appropriate (invitation to public competitive calls for tenders, negotiated contract or purchase orders without limitation of the threshold). In the event of public competitive calls for tenders, these PEEs are invited to publish the corresponding notices at the level of the public procurement portal and at the level of electronic editions of newspapers and, when appropriate, in their own websites.

For public establishments subject to a higher authority approval, the presence of representatives from the Ministry of the Economy, Finance and Administration to reform approvals of competitive public tender offer commissions is not mandatory. State controllers will continue to examine the tender documents from a distance and transmit their observations, if any, to the relevant public establishments by electronic means. They will also continue to support these establishments by any suitable electronic means (Email, video conference, etc.).

Regarding contracts or purchase orders that are in progress and whose contractual execution deadlines are likely to be affected by the current economic and health situation, the PPEs can assert cases of force majeure provided for in the specifications of the general administrative clauses in force to grant, to service providers who request it, an additional period equivalent to the period of the state of health emergency announced by the public authorities. The contracting authorities will proceed, immediately after the state of emergency is lifted, to drafting the amendments and note this extension of time.

Should you have any questions, please feel free to contact us:

Patrick Larrivé

Partner

plarrive@asafoandco.com

Mouna Boubia

Partner

mboubia@asafoandco.com

Benoit de Monval

Partner

dbouadoux@asafo-rci.com

Louis Dubois

Partner

ldubois@asafoandco.com