Cambodia and China last week signed an agreement to exchange financial intelligence to combat money laundering and terrorism financing, though experts said the Kingdom should still be doing more to tackle an issue that has long persisted in the country, in part, due to local corruption.
Cambodia’s Financial Intelligence Unit (FIU) and China’s Anti-Money Laundering Monitoring and Analysis Center last Tuesday signed a memorandum of understanding to cooperate to fight the problem, according to an announcement from the National Bank of Cambodia. Both parties “plan to strengthen cooperation focusing on training, capacity-building and technical assistance”, the announcement stated.
Cambodia has perennially earned low marks on its preparedness to combat money laundering. Last month, the Kingdom was ranked as the highest-risk nation in ASEAN, and sixth-highest risk globally, for its vulnerability to money laundering and terrorism financing, according to an annual report by the Switzerland-based Basel Institute on Governance.
And despite the longevity of the problem, experts said the government had seemingly exhibited a lack of will in taking tough steps against laundering.
Gemma Aiolfi, head of compliance and corporate governance at the Basel Institute, said that while it appeared that the country had made legislative and institutional improvements “prosecutions and convictions are lacking”.
Meanwhile, Transparency International Cambodia head Preap Kol yesterday said that years after the passage of the 2007 Anti-Money Laundering Law, the country still needed to establish a strong mechanism to track incoming and outgoing finances, and to be more transparent with its banking sector. The elements are “critical”, he said, “but we have observed that Cambodia’s capacity to do this is still quite limited”.
A representative at the FIU yesterday said no one was available to answer questions. Representatives at the Chinese Embassy didn’t respond to requests for comment. However, government spokesman Phay Siphan yesterday pointed to the Anti-Money Laundering Law and the existence of the FIU as evidence of the Kingdom’s efforts.
But TI’s Kol said the amount of work the FIU does “remains unknown”.
A classified US State Department cable obtained by the Post in 2015 said that the FIU had only 10 staffers to monitor more than 70 banks and microfinance units. As a result, the unit “had never fined, sanctioned or penalised any financial institution”. It had also never received a single suspicious transaction report from any of Cambodia’s casinos.
Meanwhile, Miguel Chanco, lead ASEAN analyst for the Economist Intelligence Unit, said he believed it was “audacious” for China to help Cambodia fight money laundering. “Curbing money laundering for a start requires an environment of greater transparency – which both China and Cambodia don’t have.”