Financial Crime World

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Cambodia’s Struggle Against Money Laundering: KYC vs AML

Money laundering has emerged as a significant challenge in Cambodia, driven by a weak anti-money laundering (AML) regime, poverty, corruption, and limited resources. The country’s economic vulnerabilities, loose controls, and corruption have created an environment conducive to money laundering.

Underlying Factors

  • Lack of strong economic development
  • High-income inequality
  • Poor employment prospects
  • Heavy reliance on the US dollar for financial transactions

The country’s casinos, particularly those near the borders with Thailand and Vietnam, are also potential hubs for money laundering activities.

Challenges in Enforcement

  • Politicized and weak judicial system hinders effective enforcement of AML regulations
  • Corruption at various levels of government and society makes it easier for money launderers to evade detection and punishment

Money Laundering Activities

  • Primarily associated with the black market, including drug smuggling and local methamphetamine production
  • Often involve both legal and illegal transactions conducted outside official financial institutions, making them difficult to track

Regulatory Efforts

  • The Cambodia Financial Intelligence Unit (CAFIU) is responsible for organizing and coordinating anti-money laundering efforts
  • The National Bank of Cambodia holds broad supervisory powers over financial institutions
  • The Anti-Corruption Unit investigates and enforces laws related to corruption and money laundering

2020 AML/CTF Law

  • Defines activities such as intentionally transforming or transferring property to conceal involvement in a preceding crime as money laundering
  • Aims to strengthen anti-money laundering measures within the country

Effective Combating of Money Laundering

  • Ongoing vigilance, enforcement, and international cooperation are necessary
  • Businesses must prioritize Know Your Customer (KYC) practices to prevent money laundering

Sanction Scanner’s Solution

  • Customized AML compliance solutions tailored for the Cambodian market
  • Streamlines compliance for businesses operating in this region
  • Contact us today to learn more about how we can help your business comply with AML regulations in Cambodia.