Cambodia Steps Up Efforts to Combat Financial Crime

PHNOM PENH, CAMBODIA - In a bid to combat financial crime, the Cambodian government has stepped up its efforts to target corruption and related issues such as illegal logging, perceived complicity of officials, and illegal gambling.

The Scale of the Problem

According to the United Nations Office on Drugs and Crime (UNODC), the proceeds of organized crime in Southeast Asia are estimated to total $73.4-$110.4 billion USD annually. This highlights the need for effective measures to combat financial crime.

Combating Corruption

Best Practices on Beneficial Ownership

The UNODC has been working with anti-corruption agencies across the region to promote best practices on beneficial ownership and financial investigations. In Cambodia, a workshop on financial investigations was held recently, which saw officers from the Anti-Corruption Unit (ACU) share approaches to tackling corruption.

Identifying Beneficial Owners

Corrupt officials often resort to intermediaries to distance themselves from incriminating transactions. These intermediaries may skim as much as 30% of the illicit funds involved in exchange for their involvement. To avoid detection, corrupt persons may create a corporation and deposit bribe money into its bank account, or co-opt an enabler to found a corporation abroad.

Complicated ownership structures can impede investigations but also serve as a red flag. Anti-corruption officers may draw on various sources to ascertain whether ownership structures contain signs of corruption. If company management appears not to be actively involved in the management of the company, this could be a sign that the company is not genuine.

Investigations and Risk Assessments

Identifying the beneficial owner is a vital component of corruption investigations. Investigators need to infer who benefits from the proceeds of a legal entity using available information. The beneficial owner may be registered as an authorized signatory of a bank account used for corruption, or clues may be revealed through the allocation of voting rights or percentage of ownership.

Risk assessments are also crucial in navigating a growing volume of information. Undertaking risk assessments can help identify high-risk industries and prioritize investigations. Additionally, anti-corruption agencies are turning to data analytics to automate aspects of the risk identification process.

Inter-Agency and Cross-Border Cooperation

Inter-agency and cross-border cooperation is essential in enhancing investigations. Anti-corruption agencies should link up with financial investigations across agencies to improve evidence and quality of investigations. FIUs can also draw on international anti-corruption links to overcome cross-border information exchange.

Conclusion

The workshop was a significant step forward in the fight against financial crime in Cambodia, said officials. The UNODC has pledged to continue supporting anti-corruption efforts in the region through training and capacity-building programs.