Financial Crime World

Vulnerability Assessment: Expenditures in Cambodia

The Kingdom of Cambodia is a rapidly growing economy with a population of over 16 million people. The country’s financial sector has seen significant growth, driven by the government’s efforts to liberalize trade and services.

Assessing Vulnerabilities in Various Sectors

In this report, we assess the vulnerability of various expenditures in Cambodia, including:

  • Money Remittance
  • Designated Non-Financial Businesses and Professions (DNFBPs)
  • Real Estate Sector
  • Casino Sector
  • Financial Trust Sector

Money Remittance

Cambodia’s money remittance sector is a significant contributor to the country’s economy. However, due to its size and operation, it has been deemed as high vulnerability. To mitigate this risk, the government has implemented restrictions on money remittance, which has reduced its vulnerability rating to medium.

DNFBPs

The DNFBP sector in Cambodia includes:

  • Real estate agents
  • Dealers of precious metals and stones
  • Accountants
  • Lawyers
  • Trust and company service providers

This report assesses the ML/TF risks relating to these sectors.

Real Estate Sector

The real estate sector has seen significant growth in recent years, driven by the country’s economic growth and government efforts to develop infrastructure. The sector contributes 17.5% to Cambodia’s GDP and is expected to continue growing. However, due to its size and operation, it is rated as medium risk.

Casino Sector

The casino sector is primarily operated along the Cambodian-Vietnam and Cambodian-Thai borders. While there are some casinos in Phnom Penh, the majority of operations are outside of the capital city. The government has opened up the economy to foreign investors, which has led to an influx of investment in this sector. However, due to its size and operation, it is rated as medium risk.

Financial Trust Sector

The financial trust sector in Cambodia includes:

  • Local and international organizations that provide financing for social and economic development projects

The government has established a legal framework to manage these funds, which are supervised by the Ministry of Economy and Finance (MEF). Currently, there are only 9 financial trust entities registered at MEF, all of which are banks or microfinance institutions. Due to its low volume of transactions and strong regulatory oversight, the financial trust sector is rated as low vulnerability.

Combating Terrorism and Terrorist Financing

The government of Cambodia has taken steps to combat terrorism and terrorist financing by:

  • Providing training
  • Establishing laws and relevant organizations

The country’s harmonizing policy has allowed for full integration of all minority groups, reducing the risk of terrorism and terrorist financing.

Conclusion

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Overall, while there are some vulnerabilities in certain sectors, the Cambodian government has taken steps to mitigate these risks through regulation and oversight. The financial trust sector is rated as low vulnerability due to its small size and strong regulatory oversight, while the real estate, casino, and money remittance sectors are rated as medium or high vulnerability due to their size and operation.

References

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  • [List of sources used in this report]