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Banks and Financial Institutions Required to Enhance Anti-Money Laundering Measures

Phnom Penh, Cambodia - In a bid to combat money laundering and terrorist financing, the Royal Government has issued a new Prakas requiring banks and financial institutions to implement enhanced anti-money laundering (AML) measures.

Mandatory Requirements

The Prakas, which comes into effect immediately, mandates that banks and financial institutions:

  • Maintain accurate records of all transactions
  • Report suspicious activities
  • Freeze accounts linked to terrorist organizations

Effective Internal Control System

Banks and financial institutions must establish an effective internal control system for AML/CFT compliance with legal and regulatory requirements. This includes:

  • Conducting regular checks on customer identities
  • Reporting suspicious transactions
  • Cooperating with law enforcement agencies

Suspicious Transaction Reports

The Prakas requires banks and financial institutions to maintain a complete file of all suspicious transaction reports submitted by employees, as well as those that have been further submitted to the Financial Intelligence Unit (FIU).

Confidentiality and Cooperation

The Prakas also prohibits banks and financial institutions from tipping off customers about suspicious transactions, and ensures that reporting procedures are operated in a confidential manner.

FIU’s Role

The FIU has been tasked with receiving and analyzing suspicious transaction reports, and will work closely with law enforcement agencies to identify and prosecute money laundering and terrorist financing cases.

Key Provisions

Here are the key provisions of the Prakas:

  • Banks and financial institutions must maintain accurate records of all transactions
  • Suspicious transaction reports must be submitted to the Financial Intelligence Unit (FIU)
  • Accounts linked to terrorist organizations must be frozen
  • Internal control systems for AML/CFT compliance must be established
  • Regular checks on customer identities must be conducted
  • Reporting procedures must be operated in a confidential manner
  • Tipping off customers about suspicious transactions is prohibited

Penalties

Failure to comply with the Prakas may result in:

  • Fines
  • Imprisonment

Effective Date

The Prakas comes into effect immediately.