Financial Crime World

Cambodia Makes Strides in Implementing Anti-Money Laundering and Combating the Financing of Terrorism Regulations

The Kingdom of Cambodia has made significant progress in implementing the Financial Action Task Force (FATF) Recommendations, a global standard for combating money laundering and the financing of terrorism. According to Cambodia’s Mutual Evaluation Report released in 2017, the country has achieved partial compliance with 33 out of the 40 FATF recommendations.

Key Areas of Improvement

  • Assessing Risk and Applying a Risk-Based Approach (R.1): Cambodia has made significant improvements in assessing risk and applying a risk-based approach to combat money laundering and terrorist financing.
  • National Cooperation and Coordination (R.2): The country has demonstrated strong national cooperation and coordination efforts to prevent money laundering and terrorist financing.
  • Money Laundering Offence (R.3): Cambodia’s laws and regulations related to money laundering have been strengthened, making it easier to detect and prosecute money laundering crimes.
  • Confiscation and Provisional Measures (R.4): The country has implemented measures to confiscate assets and impose provisional measures to prevent the misuse of funds.

Additional Areas of Partial Compliance

  • Customer Due Diligence (R.10): Cambodia has demonstrated partial compliance in customer due diligence, ensuring that financial institutions have adequate procedures in place to identify and verify customers.
  • Record Keeping (R.11): The country has implemented record-keeping requirements for financial institutions, making it easier to track transactions and detect suspicious activity.
  • Politically Exposed Persons (R.12): Cambodia’s regulations related to politically exposed persons have been strengthened, reducing the risk of money laundering and terrorist financing.

Areas for Improvement

  • Financial Institution Secrecy Laws (R.9): Cambodia still needs to improve its financial institution secrecy laws to ensure that financial institutions are transparent and cooperate with authorities.
  • Targeted Financial Sanctions related to Proliferation (R.7): The country needs to strengthen its targeted financial sanctions related to proliferation to prevent the financing of weapons of mass destruction.
  • DNFBPs: Customer Due Diligence (R.22) and other measures (R.23): Cambodia still needs to improve its customer due diligence procedures for designated non-financial businesses and professions (DNFBPs).
  • Regulation and Supervision of Financial Institutions (R.26): The country needs to strengthen its regulation and supervision of financial institutions to ensure that they are operating in a safe and sound manner.

Conclusion

While Cambodia still has work to do to achieve full compliance with the FATF Recommendations, the progress made so far is a positive step towards enhancing the country’s financial integrity and reducing the risk of money laundering and terrorist financing. The Cambodian government has acknowledged the report’s findings and is working to address the identified deficiencies.