Cambodia is not a regional or offshore financial center. However, there are money laundering vulnerabilities in Cambodia, and their reasons lie in implementing a weak AML regime. Cambodia is a poor country in Asia and remains a daunting problem, hampered by long-term economic development, local corruption, limited human resources, high-income inequality, and poor job prospects. Due to factors such as a heavily dollarized economy in Cambodia, loose control of casinos, a weak, highly politicized judicial system, and corruption, AML regimes are not implemented with sufficient efficiency.
Overview of Money Laundering in Cambodia
Cambodia has an important black market for smuggled goods on drugs and substances imported for local methamphetamine production. Both legal and illegal transactions are generally conducted outside official financial institutions and are difficult to track. Cash revenues from crime are easily transferred to land, residential buildings, luxury goods, vehicles, and other property types without going through the formal banking sector. Casinos located along the borders of Thailand and Vietnam are other potential ways of laundering money. Cambodia has not adopted any significant additional AML legislation since 2014. However, with the laws adopted afterward, money laundering activities in Cambodia are tried to be prevented. With the new 2020 AML / CTF law adopted in 2020, anti-money laundering measures in Cambodia have been increased at many points. In the meantime, you can review a closer look at the New AML / CTF laws in Cambodia.
Some crimes in Cambodia are seen as money laundering criminal behavior, for example; joining an organized criminal group, terrorism, human trafficking, migrant smuggling, sexual abuse, narcotic drug and psychotropic substance trafficking, illegal arms trade, illegal trafficking of stolen and other goods, corruption and bribery, fraud, environmental crime or illegal logging, murder, robbery or theft, extortion, fraud, tax evasion, etc. In addition, according to the Cambodia Anti-Money Laundering and Anti-Terrorist Financing Law, money laundering is defined as follows:
- intentionally carrying out the act of transformation or transfer of property with the aim of concealing a person involved in the commission of any preceding crime;
- deliberate concealment of the true nature of the property, its origin, location, or property rights
- take action knowing that this property is income from any predicate offense
- attempts to knowingly assist and coerce any money laundering offense.
Anti-Money Laundering Regulators in Cambodia
Institutions with money laundering risks in Cambodia have to comply with some regulations in order to minimize these risks and protect themselves. Some regulators make these regulations and laws; these regulators check whether the institutions comply with these regulations and penalize institutions that do not comply with these regulations. Below you can find some examples of regulators in Cambodia.
Cambodia Financial Intelligence Unit ("CAFIU" ): CAFIU is the organizer of anti-money laundering activities in Cambodia. He was responsible for analyzing the information presented to him and sending the relevant information to law enforcement.
National Bank of Cambodia: The National Bank of Cambodia the Law on its Organization and Operation (1996) refers to NBC as the "Central Bank" and gives broad powers to supervise banks.
Anti-Corruption Unit: Certain provisions of the criminal law regarding money laundering are subject to the anti-corruption regime in Cambodia. The Anti-Corruption Unit (ACU) is a special body tasked with investigating and enforcing corruption crimes.
National Coordination Committee: The Prevention of Money Laundering and Combating the Financing of Terrorism was established in 2012 to prevent and control money laundering and terrorist financing in Cambodia.
Customer Due Diligence Measures in Cambodia
There is a high risk of money laundering and terrorism financing, and reporting organizations should take CDD measures in accordance with the CAFIU guidelines. The CDD measures taken as per the regulations are: obtaining information about the real funding source, obtaining additional information about the identity of the customers, carrying out additional monitoring procedures regarding the activities of the customers, obtaining information about the real purpose of the transaction, etc. In addition, reporting organizations should implement Enhanced Due Diligence (EDD) measures in the event of certain events. For example, transactions that follow unusual patterns or are clearly not for a legitimate purpose, all business relations and transactions with survivors of foreign policy, as well as family members and close partners of those exposed; Business relationships with politically exposed persons, unusual or large transactions, bank transfers without sender information, business relations with entities or individuals in the jurisdiction that have inadequate systems to prevent or deter ML / TF, Cross-border correspondent banking or other similar relationships, etc.
Sanction Scanner all solutions are compatible with all regulations. In Cambodia, obliged organizations can know who their customers really are with our AML Name Screening tool, and they can detect suspicious transactions of their customers with the Transaction Monitoring tool. For detailed information, you can talk to us or request a demo.
