Comprehensive Overview of Cambodia’s Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) Law

Introduction to the 2020 AML/CFT Law in Cambodia

The 2020 Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) law in Cambodia introduces new requirements for reporting entities to exercise due diligence in their activities. This includes requesting and retaining specific information about customers, expanding on the types of transactions and business relationships that are classified as “high risk”, and requiring enhanced customer due diligence measures.

Key Points under the 2020 AML/CFT Law

• Enhanced Customer Due Diligence (CDD): Reporting entities must take additional CDD measures in situations where the risk of money laundering and terrorism financing is deemed high.
• Types of Transactions Requiring Enhanced CDD: These include:
  • Complex, unusual, or large transactions
  • Wire transfers without originator information
  • Business relations with institutions or persons in jurisdictions with inadequate AML/CFT systems
  • Business relations with politically exposed persons (PEPs)
• New Categories for Enhanced CDD: The law introduces new categories that require enhanced CDD measures, including business relations with institutions or persons in jurisdictions with a high risk of money laundering and terrorism financing.
• Reporting Requirements: Reporting entities must report large cash transactions and other suspicious transactions to the Cambodian Financial Intelligence Unit (CAFIU).
• Penalties for Non-Compliance: The law introduces higher fines and longer prison terms for legal entities found to be in violation of the AML/CFT Law.

Importance of Compliance

The article highlights the importance of compliance for reporting entities, emphasizing the need to exercise due diligence in their activities and adhere to the new requirements under the 2020 AML/CFT Law. Non-compliance can result in severe penalties, including higher fines and longer prison terms.