Suspicious Transaction Reporting: A Key Tool in the Fight Against Money Laundering and Terrorism Financing

In an effort to strengthen its efforts against money laundering and the financing of terrorism, Cambodia’s banking sector has been tasked with implementing a robust suspicious transaction reporting system. This system is designed to detect and prevent illegal activities by submitting reports to the Financial Intelligence Unit (FIU) within 24 hours.

Indicators of Suspicious Transactions

The law provides a list of indicators that may trigger a report, including:

• Large or unusual transactions
• Transactions conducted in cash
• Transactions involving multiple accounts or beneficiaries
• Transactions with countries or regions known for money laundering and terrorist financing activities
• Transactions with individuals or entities with criminal records

Reporting Obligations

Banks and financial institutions are required to:

• Appoint a senior management-level compliance officer responsible for submitting suspicious transaction reports to the FIU
• Report suspicious transactions to their compliance officers, even if they are not sure of the underlying unlawful activity
• Evaluate whether there are reasonable grounds for suspicion and submit the report to the FIU within 24 hours

Confidentiality and Cooperation

Banks and financial institutions must:

• Maintain confidentiality throughout the reporting process
• Only share information with staff on a need-to-know basis
• Cooperate fully with the FIU in providing additional information and documentation requested, and addressing further inquiries related to the submitted report

Prohibition of Tipping Off

The law prohibits banks and financial institutions from:

• Informing customers of the existence of a suspicious transaction report or allowing them to become aware of such reports
• Preventing the tipping off of suspects and undermining the effectiveness of the reporting system

Maintenance of Files and Training

Banks and financial institutions must:

• Maintain complete files on all suspicious transaction reports submitted by their employees, as well as those that have been further submitted to the FIU
• Provide training to their officers and employees involved in conducting or facilitating customer transactions on reporting procedures

Detection and Reporting of Terrorism Financing

In addition to the suspicious transaction reporting system, banks and financial institutions are required to:

• Take measures to detect and report suspected terrorism financing activities
• Extend the reporting system to cover suspicions of terrorism financing
• Maintain a database of names and particulars of terrorists listed by the United Nations

Risk Management

Banks and financial institutions must establish an effective internal control system for anti-money laundering and combating the financing of terrorism (AML/CFT) compliance, which is overseen by their senior management. This ensures that all employees involved in conducting or facilitating customer transactions are aware of their reporting obligations and the risks associated with money laundering and terrorist financing.

Conclusion

By implementing these measures, Cambodia’s banking sector can help prevent the misuse of its financial system for illegal activities and maintain its reputation as a responsible and transparent player in the global economy.