Cambodia is ripe for money-laundering and terrorist financing activities due to rampant corruption, banking-sector secrecy and an overall lack of financial transparency, a governance institute says in a report released this week.
The Switzerland-based Basel Institute on Governance has ranked Cambodia the third “highest-risk” country out of 144 listed for its failure to comply with anti-money laundering and counter-terrorism financing standards.
Cambodia’s ranking is based on standards and other “risk categories such as financial regulations, public transparency, corruption and rule of law”, according to the report’s authors.
Cambodia’s risk score is 8.46 out of 10, only slightly lower than Iran, which had the highest score at 8.57.
Cambodia is also the only “high-risk” country in Southeast Asia.
The report noted that it could only measure risk of money-laundering and terrorism financing since most of it occurs in “absolute secrecy”.
Transparency International executive director Kol Preap said the lack of transparency in Cambodia’s banking sector was paramount.
“Any significant amount of money could be channelled through this system of secrecy,” Kol Preap said yesterday.
“We don’t have any anti-money laundering law, but we also need a law for access to information so we can have the right to request these details and monitor the track of money,” he said, adding such a statute would assist in tracking corruption.
“Cambodia has a long way to go on transparency,” he said.
A 2007 US embassy cable published by the anti-secrecy organisation Wikileaks said the Cambodian government was in a “state of denial” about the potential for money-laundering.
Experts who examined Cambodia’s money-laundering vulnerabilities expressed “overall frustration with Cambodia’s weak attempts to police its financial sector”, the cable read.
National Bank of Cambodia officials could not be reached yesterday due to the public holiday.
To contact the reporter on this story: Bridget Di Certo at [email protected]