The Spanish government is aiding Morocco in its efforts to be removed off the FATF's "grey list."

The Spanish Government is aiding Morocco in its efforts to be removed from the FATF's watchlist by the end of this month.

Officials in Madrid revealed that Spain is debating how to remove Morocco from the so-called "grey list" of countries involved in money laundering.

Last month, a FATF (Financial Action Task Force) delegation visited Morocco. The North African country is hoping to be removed from the watchlist when the Paris-based FATF issues its report later this month.

A country's GDP suffers greatly when it is placed on the grey list.

The extent of the Spanish government's efforts is unknown. What is certain is that Madrid, together with Paris and Berlin, has one of the most powerful voices in the European Council and European Commission. It remains to be seen how this affects FATF decision-making.

According to experts, Spain might form alliances with other countries in the OECD and possibly push on Morocco's behalf. Everything will become obvious around February 24 when the FATF issues its decision.

All of this comes as Spain and Morocco have agreed to put aside their differences, according to Spanish Prime Minister Pedro Sanchez, in order to rebuild a relationship marred by repeated disagreements over migration and territory.

Sanchez was speaking during a summit in Rabat, Morocco, when the two nations inked up to 20 agreements to enhance trade and investment, including credit lines worth up to 800 million euros ($873 million).

“We have agreed on a commitment to mutual respect, whereby in our discourse and in our political practice we will avoid everything that we know offends the other party, especially regarding our respective spheres of sovereignty,” Sanchez said.

There have been recurring diplomatic crises over Spain's African enclaves, Morocco's fight with rebels over Western Sahara, and the annual entrance of thousands of illegal migrants in Spain via Morocco.

Although Morocco refuses to recognise Spanish sovereignty over Ceuta and Melilla, the two nations agreed last year to open the first customs control point in Ceuta.

Madrid claims that this demonstrates Rabat's acknowledgment of the enclaves as foreign territory, although Morocco has made no public statements indicating a shift in its long-held position that the enclaves should be part of its territory.

Sanchez normalised relations with Rabat in March 2022, after reversing Spain's four-decade position on the Western Sahara by supporting Morocco's request to create an autonomous entity.

Making peace with neighbours has put Sanchez's Socialists in an awkward position.

Last month, its MEPs voted against a European Parliament motion calling on Morocco to improve its record on press freedom. MEP Juan Fernando Lopez claimed this week that preserving friendly neighbourly ties sometimes needed "swallowing a toad".

Spain's U-turn on Western Sahara enraged Algeria, a Polisario Front ally, which froze commerce with Spain and threatened it could cut natural gas flows even as it strengthens ties with Italy.

According to the Ministry of Industry, Spanish exports to Algeria plummeted 41% year on year to 1 billion euros ($1.09 billion) in the January-November 2022 period. In the same year, its exports to Morocco increased by 27% to 10.8 billion euros.

According to a Spanish government source, Spain expects to receive a large portion of the 45 billion euros that Morocco plans to invest in infrastructure by 2050.

According to the source, Spanish companies are well positioned to secure concessions in important sectors of Rabat's development strategy, including as water sanitation and renewable energy.

State-owned railway companies Renfe and Adif are collaborating with Moroccan counterparts to create additional train lines, which might generate 6 billion euros in revenue.

On Thursday in Rabat, Moroccan Prime Minister Aziz Akhannouch expressed delight with Spain's backing for Morocco's autonomy plan as the "most credible solution" to the Western Sahara problem, but made no mention of an agreement to settle all sovereignty claims.

A united proclamation made no mention of Spain's Moroccan colonies, but it did underline Spain's new position on Western Sahara. Morocco stated that it expects Spain's future presidency of the European Union to serve as a conduit for improved relations with the bloc. Both countries committed to work together on illegal migrant repatriation.

By fLEXI tEAM