Money Laundering in Cambodia: What You Need to Know

======================================================

Cambodia’s financial sector has been under scrutiny for its handling of money laundering, with experts warning that the country’s lax regulations and lack of effective enforcement make it an attractive destination for criminals seeking to launder illicit funds.

FATF Evaluation

In 2017, Cambodia received a mixed rating from the Financial Action Task Force (FATF), with some areas showing significant improvement while others remained concerning. The FATF conducts mutual evaluations of countries’ anti-money laundering (AML) and combating the financing of terrorism (CFT) efforts.

Weaknesses in Regulation and Supervision

One area where Cambodia fell short was in implementing the technical requirements of the FATF Recommendations. The country’s laws and regulations lacked clarity and consistency, making it difficult for financial institutions to effectively identify and report suspicious transactions.

Lack of effective regulation and supervision of financial institutions
Gaps in the system for supervising banks and other financial institutions

Challenges in Implementing Targeted Financial Sanctions

Another area where Cambodia struggled was in implementing targeted financial sanctions related to terrorism and terrorist financing. The country’s laws and regulations lacked sufficient provisions to effectively prohibit and prevent the provision of funds to individuals and entities designated as terrorists or terrorist organizations.

The FATF also highlighted concerns about Cambodia’s ability to share information and cooperate with other countries to combat money laundering and terrorist financing. While there were some efforts underway to establish a financial intelligence unit, the country still lacked a comprehensive framework for sharing information and coordinating with international partners.

Progress in Implementing AML/CFT Measures

Despite these challenges, Cambodia has made some progress in implementing AML/CFT measures. The country has established a number of laws and regulations aimed at preventing money laundering and terrorist financing, including:

Anti-Money Laundering Law
Combating Terrorist Financing Law

Conclusion

While Cambodia has made some progress in combating money laundering and terrorist financing, there are still significant challenges to be addressed. The country’s financial sector remains vulnerable to abuse by criminals seeking to launder illicit funds, and it is essential that the government takes further action to strengthen its AML/CFT regime and improve cooperation with international partners.