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Cambodia a target for money laundering

Cambodia a target for money laundering

CAMBODIA'S nascent banking sector needs better oversight and enforcement of existing regulations to avoid becoming more vulnerable to money launderers, including those belonging to extremist groups, the London-based watchdog International Bar Association said in a recently released report.

Relatively little regulatory control has made the Kingdom an easy target for money launderers, said Lay Vicheka, a Cambodian legal consultant who was commissioned to write the report.

"People think Cambodia is an easy place [to launder money] because the government and banks here have been slower to address the problem," he said.

Under pressure from the United States to address terrorism funding, Cambodia enacted a number of anti-laundering measures, including opening the Financial Intelligence Office in May.

The office, which is responsible for tracking suspicious activities in the banking sector, has been empowered by the Law on Anti-Money Laundering and Combating the Financing of Terrorism that was passed in 2007.

But even with new legislation,  Cambodia remains ill-equipped to deal with the problem, the IBA said in its report, which was completed in November.

"Cambodia has very few pieces of legislation in place to combat money laundering and financing of terrorism," the report said.  

Large-scale problem

The Financial Intelligence Office's secretary general, Phan Ho, acknowledged that while money-launderers used a variety of often complicated schemes, he was confident that his office could address the issue.

"We're taking preventive measures," he said.

"But we know it's a real issue now and will continue to be in the future," Phan Ho added.

The Kingdom's largely unregulated gaming sector, which brings in hundreds of millions of dollars each year, is especially concerning, Phan Ho said.

He added that the Financial Intelligence Office is waiting on the Finance Ministry to issue a subdecree requiring the industry to report suspicious activity.

In an a previous interview with the Post, Phan Ho said he was concerned with potential for money-laundering through the large-scale real estate developments that have sprung up in Phnom Penh.

"The cost of those projects is very high and we cannot control how much money they collect" by informal transfers, he said. 

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