Title: Cambodia’s Financial Crime Challenge: A Tangled Web in Casino Gaming and Emerging Financial Sectors

Overview

Cambodia’s lax anti-money laundering (AML) regulations have placed the country on the Financial Action Task Force (FATF) grey list, highlighting potential money laundering and terrorist financing risks. Despite deep-rooted corruption and challenges, Cambodia continues to attract foreign investment. This article explores the money laundering risks in the casino gaming and emerging financial sectors.

Cambodia’s Ranking in Global Corruption Indexes

• WEF 2019 Global Competitiveness Report: Second most corrupt country in Southeast Asia.
• Transparency International 2020 Corruption Perceptions Index: Last place globally.

Foreign Investment Amidst Corruption Concerns

Chinese Investment: Over US$2 billion since beginning of 2021.

• Infrastructure projects: Phnom Penh-Sihanoukville Expressway, coal-fired power station, and Siem Reap-Angkor International Airport.
• Casino industry: Licensing increased by 263% between 2014 and 2019.

Risks: Rampant corruption and regulatory ambiguity lead to money laundering risks, particularly in the casino sector.

Money Laundering in the Casino Sector

• Cambodia was previously a popular destination for Chinese gamblers.
• China’s zero Covid policy and pandemic impact necessitate reconsideration.
• Necessity to strengthen regulations to prevent financial crimes.

Challenges for a Developing Country

As a developing country with limited financial management capabilities, Cambodia faces a significant challenge in regulating casinos and its financial sector.

Chinese Efforts to Reduce Problematic Financial Outflows

China’s growing focus might encourage Cambodia to rein in its casino industry.

Progress in Cambodia’s Financial Services Sector

Recent AML/CFT Legislation: A promising first step, effective from June 2020.

• Specific definitions.
• Enhanced reporting requirements.
• Stiffer penalties for non-compliance.

Collaborative Efforts to Combat Money Laundering

Cambodia Financial Intelligence Unit (CAFIU): Working to be removed from FATF grey list. AML/CFT Trainings: Ongoing for law enforcement officials.

Conclusion

Continuous efforts from all stakeholders are essential to prevent financial crimes and transform Cambodia’s financial sector.