Financial Crime World

Cambodia Commended for Commitment to Anti-Money Laundering and Counter-Terrorist Financing Efforts

Phnom Penh, Cambodia - The Asia-Pacific Group on Money Laundering (APG) has commended Cambodia for its significant progress in implementing anti-money laundering and counter-terrorist financing (AML/CFT) measures since its 2007 mutual evaluation.

Progress in Implementing AML/CFT Measures

According to the APG’s latest assessment, Cambodia has made notable improvements in technical compliance with the Financial Action Task Force (FATF) standards. While some deficiencies remain, particularly in areas such as:

  • Politically exposed persons
  • Regulation of designated non-financial businesses and professions
  • Transparency and beneficial ownership

Cambodia has demonstrated a strong commitment to addressing AML/CFT issues.

Challenges and Risks

The assessment noted that Cambodia’s cash-based economy, systemic capacity constraints, and porous borders increase its vulnerabilities to money laundering (ML) and terrorist financing (TF). However, the country has taken steps to mitigate these risks, including:

  • Establishment of a national anti-money laundering committee
  • Implementation of various AML/CFT measures

National Risk Assessment

One of the key highlights of Cambodia’s efforts is the completion of its first National Risk Assessment (NRA) in 2016. While the NRA had some limitations, it marked an important step forward in understanding ML/TF risks facing the country.

  • The assessment team agreed with authorities on the main ML/TF risks faced by Cambodia
  • The NRA has contributed to a better understanding of these risks among public and private stakeholders

National AML/CFT Strategies

The APG also commended Cambodia for its national AML/CFT strategies, which have driven changes to laws, regulations, and policies related to AML/CFT. However, the assessment identified some areas for improvement, including:

  • Need for more coordinated policies and actions that align with identified risks

Key Findings

  • Cambodia has made significant progress in technical compliance with FATF standards since 2007
  • The country faces various ML/TF risks, including:
    • Fraud/scams
    • Corruption
    • Drug trafficking
    • Human trafficking
    • Illegal logging
    • Wildlife crime
    • Goods and cash smuggling
  • Cambodia’s NRA marked an important step forward in understanding ML/TF risks facing the country
  • The country is encouraged to continue strengthening its AML/CFT regime and addressing remaining deficiencies

Recommendations

  • Strengthen capacity building efforts to improve the effectiveness of its AML/CFT regime
  • Prioritize the development of a more comprehensive NRA that includes information from credible sources
  • Continue to enhance inter-agency cooperation and coordination mechanisms to effectively combat ML/TF

By addressing these areas for improvement, Cambodia can further strengthen its AML/CFT regime and contribute to a safer and more stable financial environment in the region.