Morocco’s commercial landscape underwent a significant transformation on January 29, 2026, when Law 71.24 entered into force, fundamentally altering the legal treatment of bounced checks. Published in the Official Bulletin, this reform modifies and supplements Law 15.95 relating to the Commercial Code, marking a shift from automatic criminal prosecution to a framework that prioritizes financial settlement while maintaining strict sanctions for fraud.
The reform addresses a critical judicial bottleneck. Between 2022 and mid-2025, over 180,000 complaints were filed for bounced checks, resulting in criminal proceedings against more than 76,000 individuals, with 58,000 experiencing detention. In 2024 alone, Bank Al-Maghrib recorded nearly one million payment incidents, primarily due to insufficient funds. With more than 30 million checks processed annually representing over MAD 1,300 billion in transactions, the volume of litigation was unsustainable for Morocco’s court system.
Legal Framework and Legislative Intent
Law 71.24 amends Book III of the Commercial Code, specifically provisions governing negotiable instruments. The Minister of Justice, Abdellatif Ouahbi, emphasized that the reform seeks to restore confidence in checks as payment instruments while reducing reliance on criminal law for what are often financial difficulties rather than criminal intent.
The legislation distinguishes between genuine financial hardship and deliberate fraud. Foreign investors operating in Morocco must understand that while the law provides greater flexibility for regularization, it maintains severe penalties for fraudulent conduct, including check falsification and knowing acceptance of fraudulent instruments.
Key Provisions Effective January 2026
The reform introduces several procedural changes that affect both Moroccan and foreign companies operating in Morocco:
One-Month Grace Period: Upon complaint filing, the Public Prosecutor must grant the check drawer a minimum one-month period to regularize payment. This period may be extended for an additional month with the complainant’s agreement. This replaces the previous system where arrest could occur immediately upon complaint.
Payment Extinguishes Criminal Proceedings: The most significant change establishes that full payment of the check amount terminates criminal action at any stage of proceedings. If payment occurs after conviction, the defendant receives immediate release from detention. Outstanding arrest warrants are canceled upon payment, even after final judgment.
Reduced Financial Penalty: The criminal fine for late payment drops dramatically from 25% to 2% of the check amount. This reduction applies when payment occurs after the initial grace period but before or during criminal proceedings.
Electronic Monitoring Alternative: Courts may substitute house arrest with electronic bracelet monitoring instead of incarceration, providing a less restrictive measure while ensuring compliance.
Decriminalization of Family Disputes
Law 71.24 completely removes criminal liability for bounced checks between certain family members. Check incidents between spouses, as well as between ascendants and descendants (parent-child, grandparent-grandchild relationships), now fall exclusively under civil jurisdiction.
This provision recognizes that family financial disputes differ fundamentally from commercial fraud. Creditors in these relationships must pursue civil remedies for debt recovery rather than criminal prosecution. Foreign investors should note this limitation when structuring family-owned business operations in Morocco.
Implications for Commercial Transactions
Foreign companies conducting business in Morocco face both opportunities and risks under the new framework. The reform’s emphasis on payment over punishment may reduce collection effectiveness for suppliers and contractors who previously relied on criminal prosecution as leverage for payment.
Supplier Risk Management: Companies extending credit should implement rigorous credit screening procedures. The availability of Bank Al-Maghrib’s Central System of Irregular Checks (SCCI) allows verification of counterparties’ payment history. Foreign suppliers should consult this register before accepting checks as payment.
Contract Structuring: The reduced deterrent effect of criminal prosecution suggests that commercial contracts should incorporate alternative security mechanisms. Bank guarantees, standby letters of credit, and advance payment requirements provide more reliable payment assurance than unsecured checks.
Payment Terms Negotiation: Foreign companies may need to adjust standard payment terms. Requiring payment through bank transfers rather than checks eliminates bounced check risk entirely. Where checks remain necessary, limiting their use to established, creditworthy counterparties reduces exposure.
Continued Strict Enforcement Against Fraud
Law 71.24’s leniency applies exclusively to payment difficulties. The legislation maintains severe criminal sanctions for fraudulent conduct:
Check Falsification: Counterfeiting, altering, or forging checks carries criminal penalties up to five years imprisonment.
Knowing Acceptance of Fraudulent Checks: Accepting checks known to be fraudulent or irregular subjects the recipient to criminal liability.
Deliberate Issuance Without Funds: Issuing checks with knowledge of insufficient funds, when accompanied by intent to defraud, remains a criminal offense distinct from ordinary payment difficulties.
Legal Assistance for Commercial Payment Disputes
Cabinet Lafrouji Avocats provides comprehensive legal services for foreign businesses operating in Morocco:
- Commercial Contract Review: Analysis of payment terms, security provisions, and risk allocation clauses in supplier agreements, distribution contracts, and service contracts
- Credit Protection Mechanisms: Structuring bank guarantees, standby letters of credit, and security interests to secure payment obligations
- Payment Dispute Resolution: Representation in civil debt collection proceedings and negotiation of settlement agreements
- Transaction Due Diligence: Investigation of target company payment practices and outstanding liabilities in M&A transactions
- Compliance Advisory: Guidance on check payment regulations, electronic payment requirements, and anti-money laundering obligations
Contact us for a consultation:
Cabinet Lafrouji Avocats
64 rue Taha Houssein
20000 Casablanca – Maroc
Telephone: +212 (5) 22 47 55 29
Email: contact@lafroujiavocats.com
Legal Disclaimer: This article provides general information about Morocco’s bounced check law reform and does not constitute legal advice. Companies should consult qualified Moroccan legal counsel to evaluate their specific circumstances and develop appropriate risk management strategies.
