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.
Morocco Bounced Check Law 2026
Morocco Bounced Check Law 2026
Morocco Bounced Check Law 2026
Morocco Bounced Check Law 2026
Morocco Bounced Check Law 2026
Morocco Bounced Check Law 2026
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.
Need guidance on payment security structures for Moroccan commercial contracts? Our legal team assists foreign companies in implementing effective credit protection mechanisms and contract terms that safeguard commercial transactions. Contact Cabinet Lafrouji Avocats at +212 (5) 22 47 55 29.
Due Diligence for Foreign Investors
Foreign investors acquiring Moroccan businesses or entering joint ventures should incorporate specific due diligence measures related to check payment practices:
Outstanding Check Liability Review: Verify whether the target company or business partners face pending bounced check complaints. While Law 71.24 allows settlement, outstanding liabilities may indicate cash flow problems or management issues requiring investigation.
Payment Culture Assessment: Examine the target company’s payment practices and check usage patterns. Companies heavily reliant on postdated checks or those with frequent payment incidents may present higher operational risk.
Banking Relationship Verification: Confirm the target company’s banking relationships and check account status. Companies listed on the SCCI face banking restrictions that may affect operational financing and transaction execution.
Contractual Risk Transfer: Acquisition agreements should allocate responsibility for pre-closing bounced check liabilities. Sellers should provide representations regarding absence of outstanding check-related claims, with indemnification for undisclosed liabilities.
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. This includes unauthorized signature reproduction and modification of check amounts or payee information.
Knowing Acceptance of Fraudulent Checks: Accepting checks known to be fraudulent or irregular subjects the recipient to criminal liability. Foreign companies must verify check authenticity and drawer authority before acceptance.
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.
The Public Prosecutor’s office retains discretion to assess whether check issuance reflects genuine financial difficulty or fraudulent intent. Foreign companies should maintain documentation demonstrating legitimate commercial purpose and good faith in all check transactions.
Practical Compliance Recommendations
Foreign companies operating in Morocco should implement the following practices to manage check payment risk under Law 71.24:
Diversify Payment Methods: Reduce reliance on checks by establishing bank transfer protocols for high-value transactions. Most Moroccan banks offer SWIFT and SEPA transfer services for international payments.
Credit Verification Procedures: Institute pre-transaction credit checks through Bank Al-Maghrib’s SCCI and commercial credit reporting services. Establish internal payment limits for check acceptance based on counterparty creditworthiness.
Prompt Complaint Filing: Despite the new grace period provisions, file complaints promptly upon check dishonor. The one-month regularization period begins upon official notification by the Public Prosecutor.
Settlement Documentation: Maintain detailed records of all payment regularization negotiations. If payment occurs during the grace period or proceeding, obtain written confirmation that satisfies all amounts due, including the 2% penalty if applicable.
Legal Representation: Engage Moroccan legal counsel experienced in commercial litigation for bounced check matters. While the law encourages settlement, legal representation ensures proper procedural compliance and protects creditor rights throughout negotiations.
Legal Assistance for Commercial Payment Disputes and Transaction Security
The reform of Morocco’s bounced check law requires foreign companies to adapt their credit management and payment security practices. While the new framework reduces criminal exposure for debtors, it places greater responsibility on creditors to protect their commercial interests through proper contract structuring and due diligence.
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 for outstanding commercial obligations
- Transaction Due Diligence: Investigation of target company payment practices, outstanding liabilities, and banking relationships in M&A transactions
- Compliance Advisory: Guidance on check payment regulations, electronic payment requirements, and anti-money laundering obligations affecting commercial transactions
Our legal team has extensive experience advising international companies on Moroccan commercial law and payment security structures. We provide practical solutions that protect business interests while ensuring regulatory compliance.
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 for commercial transactions.
Comments are closed