Financial Crime World

Access to Shareholder Information: A Concern for Cambodia’s AML/CFT Efforts

Cambodia has made significant progress in implementing anti-money laundering (AML) and counter-terrorist financing (CFT) measures since its first National Risk Assessment (NRA) in 2016. However, a recent assessment by the Asia-Pacific Group on Money Laundering (APGML) highlights concerns over the country’s ability to access shareholder information, a crucial component of AML/CFT efforts.

Limitations and Gaps

According to the APGML report, Cambodia’s NRA exercise has some limitations, including:

  • Reliance solely on detected criminal activities
  • Lack of information from other credible sources

The assessment team also noted that the NRA did not consider risks associated with illicit inflow and outflow of funds through cash and trade-based money laundering.

Understanding of ML/TF Risks

The report highlights concerns over the country’s understanding of money laundering (ML) and terrorist financing (TF) risks, including:

  • Low level of understanding among some authorities
  • Gaps in the scope of the NRA regarding risks posed by:
    • Legal persons
    • Foreign trusts
    • Non-profit organizations (NPOs)
    • Dealers in precious metals and stones

Recommendations

To address these concerns, the APGML report recommends:

  1. Conduct a significant review of Cambodia’s AML/CFT policies or strategies to combat ML/TF.
  2. Improve understanding of ML/TF risks by conducting research on:
    • Threats and vulnerabilities
    • Trends and typology analyses
    • Strategic analyses
  3. Enhance coordination mechanisms between relevant agencies at the operational level.
  4. Strengthen financial intelligence and information sharing across competent authorities investigating ML/TF or predicate offences.
  5. Improve statistics on matters relevant to the effectiveness and efficiency of Cambodia’s AML/CFT systems.

Key Findings

  • Cambodia’s NRA exercise has some limitations, including its reliance solely on detected criminal activities and lack of information from other credible sources.
  • The country lacks coordination mechanisms between relevant agencies at the operational level.
  • There is an absence of strategic analysis by CAFIU, which significantly undermines use of financial intelligence by competent authorities in investigating ML/TF.
  • Cambodia’s legal system provides a broad set of powers and responsibilities for law enforcement agencies (LEAs) to investigate and prosecute ML offences, but effectiveness has not been demonstrated.