Vulnerability Assessment of Cambodia’s Financial Sector
Introduction
A recent report by the National Risk Assessment (NRA) has revealed that while Cambodia’s financial sector is growing rapidly, it still faces significant vulnerabilities in terms of money laundering and terrorist financing.
Key Findings
- The real estate sector was found to be a medium-risk area for money laundering and terrorist financing due to increasing transactions involving large sums of money and lack of effective regulation and supervision.
- The casino sector was also found to be at medium risk, largely due to its proximity to international borders and foreign ownership.
- The financial trust sector has a low vulnerability rating due to strict regulations, supervision, and implementation of anti-money laundering and counter-terrorist financing measures.
Real Estate Sector
Overview
The real estate sector in Cambodia has experienced rapid growth in recent years, driven by increased investment and economic development. However, this growth has also led to concerns about money laundering and terrorist financing risks.
- There are currently 138 registered real estate agents and 118 licensed developers in Cambodia.
- The sector is expected to continue growing, with some estimates suggesting that it will contribute around 17% of GDP by 2020.
Casino Sector
Overview
The casino sector in Cambodia has also experienced significant growth, driven largely by foreign investment. There are currently around 70 casinos operating in the country, many of which are owned by foreign entities.
- The report found that the casino sector is at medium risk for money laundering and terrorist financing due to its proximity to international borders and foreign ownership.
Financial Trust Sector
Overview
The financial trust sector in Cambodia has been growing rapidly, with around 9 registered trust entities (trustees) operating in the country. The sector is primarily focused on providing financial services to rural areas and has been actively implementing anti-money laundering and counter-terrorist financing measures.
- The report found that the financial trust sector has a low vulnerability rating due to its strict regulations, supervision, and implementation of anti-money laundering and counter-terrorist financing measures.
Designated Non-Financial Businesses and Professions (DNFBPs)
Overview
The report also highlighted the need for increased vigilance in terms of designated non-financial businesses and professions (DNFBPs), such as real estate agents, accountants, and lawyers. These sectors were found to have a medium-low vulnerability rating due to their potential for money laundering and terrorist financing.
- DNFBPs are at medium-low risk due to their potential for money laundering and terrorist financing.
- Increased vigilance is needed in these sectors to mitigate these risks.
Conclusion
While Cambodia’s financial sector faces significant vulnerabilities, the government has committed to strengthening its anti-money laundering and counter-terrorist financing measures in order to mitigate these risks.