Financial Crime World

Corruption and Financial Crime Remain Major Concerns in Cambodia’s War on Organised Crime

Phnom Penh, October 14, 2020 - Despite efforts to eradicate corruption, Southeast Asia remains plagued by financial crime, with estimated annual profits of $73.4 billion to $110.4 billion. The COVID-19 pandemic has only exacerbated the problem, according to a recent UNODC study.

Combating Corruption in Cambodia

The government of Cambodia has made combating corruption and related issues such as illegal logging, official complicity, and illegal gambling a priority. However, financial crimes often involve sophisticated methods to conceal illicit funds within and across borders.

UNODC’s Efforts to Combat Financial Crime

To address this challenge, the United Nations Office on Drugs and Crime (UNODC) has been working with anti-corruption agencies in the region, promoting best practices for beneficial ownership and financial investigations. In Cambodia, UNODC recently held a workshop on financial investigations, building on previous training sessions on interrogation and surveillance techniques.

Key Messages from the Workshop

  • Corrupt officials tend to use intermediaries to distance themselves from incriminating transactions.
  • These intermediaries may skim up to 30% of illicit funds or even embezzle entire bribes.
  • Corrupt individuals may create corporations with bank accounts in their names to deposit bribe money, while others may establish companies abroad with nominee directors to further conceal their involvement.

Identifying the Beneficial Owner

Identifying the beneficial owner is a crucial component of corruption investigations. This requires analysts to infer who benefits from a legal entity’s proceeds using available information. This may involve tracking:

  • Bank accounts
  • Voting rights
  • Shareholdings

Risk Assessments and Data Analytics

Risk assessments are essential for navigating the growing volume of transactions and identifying high-risk industries such as large-scale infrastructure projects. Anti-corruption agencies are increasingly turning to data analytics to automate aspects of this process.

Inter-agency and Cross-border Cooperation

Inter-agency and cross-border cooperation is critical for enhancing investigations, including:

  • Linking up anti-corruption and financial investigations across agencies
  • Overcoming information exchange barriers through international links with organizations like ASEANPAC, Interpol, and the Egmont Group.