Financial Crime World

Cambodia’s Progress in Anti-Money Laundering and Counter-Terrorist Financing Measures

The Asia-Pacific Group on Money Laundering (APG) conducted a mutual evaluation of Cambodia’s Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) measures in 2017. This report assesses the country’s progress in technical compliance with FATF standards, identifies areas for improvement, and highlights the need for continued efforts to strengthen its AML/CFT systems.

Key Findings

Progress in Technical Compliance

  • Cambodia has made significant progress in technical compliance with FATF standards since its 2007 mutual evaluation.
  • However, the country still has some significant deficiencies that need to be addressed.

Understanding of Money Laundering and Terrorist Financing Risks

  • The country has a mixed level of understanding of ML/TF risks, with some competent authorities and the private sector showing a reasonable understanding, while others exhibit a low level of understanding.

National Risk Assessment (NRA)

  • The NRA conducted in 2016 identified several key risks, including:
    • Fraud/scams
    • Corruption and bribery
    • Drug trafficking
    • Human trafficking
    • Illegal logging
    • Wildlife crime
    • Goods and cash smuggling

Limitations of the National Risk Assessment (NRA)

  • The NRA has limitations as it is based solely on information on detected criminal activities and does not include information from other credible sources, such as research on threats and vulnerabilities or strategic analyses.

Gaps in the Scope of the NRA

  • There are gaps in the scope of the NRA, including:
    • Risks posed by legal persons
    • Foreign trusts
    • The NPO/NGO sector
    • Dealers in precious metals and stones

Coordination and Cooperation

  • Coordination and cooperation between competent authorities at the operational level is lacking.
  • This hinders the effectiveness of AML/CFT efforts and undermines the country’s ability to combat money laundering and terrorist financing.

Use of Financial Intelligence

  • The use of financial intelligence, including in developing evidence or tracing proceeds related to ML/TF, is limited.
  • This hinders the investigation and prosecution of money laundering offences.

Investigation and Prosecution

  • There are only three investigations into money laundering offences, and none have proceeded to prosecution.
  • This highlights the need for more effective investigation and prosecution efforts to combat money laundering.

Confiscation

  • Confiscation is not being effectively used to combat money laundering.
  • The country needs to review its AML/CFT policies and strategies to address this issue.

Conclusion

The report highlights Cambodia’s progress in technical compliance with FATF standards, but also notes significant deficiencies and areas for improvement. To strengthen its AML/CFT systems, the country needs to:

  1. Improve coordination and cooperation between competent authorities.
  2. Enhance the use of financial intelligence.
  3. Increase investigation and prosecution efforts.
  4. Strengthen confiscation policies and strategies.

By addressing these issues, Cambodia can effectively combat money laundering and terrorist financing, and strengthen its position in the global fight against illicit financial flows.