Countries/Jurisdictions of Primary Concern - Cambodia
Cambodia is neither a regional nor an offshore financial center. Several factors, however, contribute to Cambodia’s significant money laundering vulnerability. These include Cambodia’s weak and ineffective AML regime; its cash-based, dollarized economy; a rapidly growing formal banking sector; porous borders; the government’s loose oversight of casinos; and the National Bank of Cambodia’s limited capacity to oversee the fast-growing financial and banking industries. A weak judicial system and endemic corruption are additional factors negatively impacting enforcement.
Cambodia has a significant black market for smuggled goods, including drugs and imported substances for local production of methamphetamine. Both licit and illicit transactions, regardless of size, are frequently done outside of formal financial institutions and are difficult to monitor. Cash proceeds from crime are readily channeled into land, housing, luxury goods, and other forms of property without passing through the formal banking sector. Casinos along the borders with Thailand and Vietnam are other potential avenues to convert ill-gotten cash.
For additional information focusing on terrorist financing, please refer to the Department of State’s Country Reports on Terrorism, which can be found at: //2009-2017.state.gov/j/ct/rls/crt/
Do FINANCIAL INSTITUTIONs engage in currency transactions related to international narcotics trafficking that include significant amounts of US currency; currency derived from illegal sales in the U.S.; or illegal drug sales that otherwise significantly affect the U.S.: NO
criminalizATION OF money laundering:
“All serious crimes” approach or “list” approach to predicate crimes: Combination
Are legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: NO
KYC covered entities: Banks, microfinance institutions, and credit cooperatives; securities brokerage firms and insurance companies; leasing companies; exchange offices/money exchangers; real estate agents; money remittance services; dealers in precious metals and stones; post offices offering payment transactions; lawyers, notaries, accountants, auditors, investment advisors, and asset managers; casinos and gaming institutions; non-governmental organizations (NGOs) and foundations
Number of STRs received and time frame: 186: January - October 2014
Number of CTRs received and time frame: 1,432,489: January - October 2014
STR covered entities: Banks, microfinance institutions, and credit cooperatives; securities brokerage firms and insurance companies; leasing companies; exchange offices/money exchangers; real estate agents; money remittance services; dealers in precious metals and stones; post offices offering payment transactions; lawyers, notaries, accountants, auditors, investment advisors, and asset managers; casinos and gaming institutions; NGOs and foundations
money laundering criminal Prosecutions/convictions:
Prosecutions: 0: January - October 2014
Convictions: 0: January - October 2014
Records exchange mechanism:
With U.S.: MLAT: NO Other mechanism: NO
With other governments/jurisdictions: YES
Cambodia is a member of the Asia/Pacific Group on Money Laundering (APG), a FATF-style regional body. Its most recent mutual evaluation can be found at: http://www.apgml.org/mutual-evaluations/documents/default.aspx?pcPage=5
Enforcement and implementation issues and comments:
The Government of Cambodia has significantly improved its AML/CFT regime over the last few years. It has adequately criminalized money laundering and terrorist financing, established procedures to identify and freeze terrorist assets, established procedures for the confiscation of funds related to money laundering, established a functioning financial intelligence unit (FIU), and instituted controls for cross-border cash transactions.
Cambodia’s AML/CFT law allows authorities to freeze assets relating to money laundering or the financing of terrorism until courts have rendered final decisions, but the AML/CFT regime lacks a clear system for sharing assets with foreign governments. In March 2014, Cambodia issued a sub-decree on Freezing of Property of Designated Terrorists and Organizations, which establishes mechanisms and procedures for freezing properties and funds of terrorists and organizations according to UNSCRs 1267 and 1373, and their successor resolutions. In May 2014, Cambodia’s General Prosecutor for the Court of Appeals issued an order to all reporting entities, as set forth in Article 4 of the AML/CFT Law, to freeze all properties of individuals or entities named in lists promulgated under UNSCR 1267.
The primary enforcement and implementation concerns involve the willingness of domestic authorities to adequately and efficiently share relevant information among themselves and to competently investigate and prosecute AML-related crimes. The government should work to increase the volume and quality of reporting of STRs and CTRs from reporting entities of all types and increase the operational independence of the nascent and understaffed FIU. Cambodia also should work to further implement existing mechanisms to both allow independent distribution of FIU analyses directly to the most appropriate law enforcement bodies and to facilitate law enforcement requests for information from the FIU.
The law on AML/CFT excludes pawn shops from its explicit list of covered entities but does allow the FIU to designate any other profession or institution to be included within the scope of the law. The National Coordination Committee on Anti-Money Laundering and Combating the Financing of Terrorism (NCC), a permanent and senior-level AML/CFT coordination mechanism, has the key role of ensuring the effective implementation of the AML/CFT law, including the development of national policy and a monitoring system to measure AML/CFT efforts. The NCC has been active in putting forward legal and policy reforms to tackle the country’s AML deficiencies.
Despite the noted progress, the Government of Cambodia should take further steps to implement adequate procedures for the confiscation of funds related to money laundering, ensure a fully operational and effective FIU, and fully implement controls for cross-border cash transactions. Given the high level of corruption, the government also should require enhanced due diligence for domestic politically exposed persons (PEPs). Cambodia should work to strengthen control over its porous borders. The government should design and implement effective operational procedures both within and among affected agencies, and measure the effectiveness of these procedures on an ongoing basis. It also should provide training to increase the capacity of reporting entities, law enforcement and judicial agencies, and regulatory bodies; and empower and require law enforcement and regulators to strictly enforce AML/CFT laws and regulations.