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FATF team visits Cambodia to evaluate ‘grey list’ status

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FATF senior policy analyst Mei-Lin Wang (eighth left) and her delegation meet with interior minister Sar Kheng (on Wang’s left) and other senior officials during their three-day visit, on January 11. SAR KHENG VIA FB

FATF team visits Cambodia to evaluate ‘grey list’ status

MEI-LIN Wang, a senior policy analyst at the Financial Action Task Force (FATF), is leading a delegation to Cambodia, with her January 11-13 visit bringing renewed hopes that the Kingdom will soon be removed from the money laundering grey list.

Wang met with Prime Minister Hun Sen on January 11 at the Peace Palace in Phnom Penh, ahead of additional meetings with other relevant senior government officials.

During the meeting, Wang encouraged the government to move ahead of other countries in green financing and development, according to Hun Sen’s personal assistant Eang Sophalleth.

“[Wang] appreciates Cambodia’s commitment on green financing and development and encouraged the country to move ahead of other countries,” Sophalleth said. “She also congratulated Prime Minister Hun Sen for taking successful action to prevent the spread of Covid-19, leading to the early reopening of the country and resumption of socio-economic activities.”

Hun Sen briefed Wang on Cambodia’s measures against Covid-19 and the Kingdom’s green development initiatives, raised during the ASEAN Summits in Phnom Penh last November.

Although there was no detailed information from Sophalleth on discussion about Cambodia’s money laundering efforts, Wang’s official visit is primarily relates to her duties with the FATF –an intergovernmental body set up to develop policies to combat international money laundering and the funding of terrorism.

Wang also met with Minster of Interior Sar Kheng on January 11. During the meeting, Sar Kheng reaffirmed Cambodia’s commitment to combating money laundering and terrorism financing as well as the financing of proliferation of weapons of mass destruction (WMD).

Cambodia was placed on the FATF’s money laundering grey list in 2019, which officials said was “unfair”. Following the move, Cambodia strove to improve the situation by following the actions as recommended by the FATF – including passing the Law on Anti-Money Laundering and Combating the Financing of Terrorism and the Law on Combating the Financing of Proliferation of WMDs – in 2020.

During the meeting, Sar Kheng said that in addition to legal measures, Cambodia has revamped and strengthened its mechanisms at the technical level nationwide and set up various committees to combat these crimes.

He said laws and relevant provisions have been widely disseminated to relevant officials to ensure their participation and make enforcement effective. He said that the national and sub-national levels are ready to cooperate with Wang at all places whenever necessary.

Wang said she appreciated Cambodia’s efforts to combat money laundering and fulfil the FATF’s action plan for the Kingdom and submit reports ahead of this onsite visit, even though the process had been delayed and interrupted by Covid-19.

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Prime Minister Hun Sen meets with Mei-Lin Wang at the Peace Palace in Phnom Penh on January 11. SPM

In December, while leading the seventh-round meeting with Cambodia’s ad-hoc sub-commission tasked with implementing action plans laid out by the International Cooperation Review Group (ICRG-JG), Minister of Justice Koeut Rith asked the relevant government agencies to be ready to work together to ensure that the Kingdom is lifted from the grey list.

“The minister has requested that relevant ministries, institutions and working groups … continue to work with a high sense of responsibility and be ready to do well during the [ICRG-JG’s visit] in order to have Cambodia struck from the FATF’s grey list in the near future,” the ministry said in a social media post.

According to a report published in August 2022 by the Asia/Pacific Group (APG) on Money Laundering, an FATF-style regional intergovernmental body, Cambodia has done a good job in cleaning up the sector and improving enforcement, although it had noted some limitations.

“Overall, Cambodia has made good progress in a number of areas including correspondent banking, wire transfers, internal controls, foreign branches, DNFBP customer due diligence and sanctions for noncompliance with Anti-Money Laundering/Combating Financing of Terrorism [AML/CFT] measures,” it said.

Many of the FATF’s recommendation for Cambodia have been evaluated as having achieved partial compliance, largely compliant or compliant, although “more need to be done”.

“Cambodia has 32 recommendations rated compliant and largely compliant. Cambodia will remain in enhanced follow-up and will continue to report back to the APG on progress to strengthen its implementation of AML/CFT measures. Cambodia’s 6th progress report is due February 1, 2023,” the report said.

In November, Sar Kheng said he regarded the FATF’s visit a prime opportunity to get Cambodia removed from the grey list. He said the government has fully implemented all of the remaining FATF action plans and decided to invite the FATF to assess their case in January 2023.

“We decided to allow the FATF to make an on-site visit to Cambodia. It will be a golden opportunity for Cambodia to be removed from the grey list. That’s the last goal of the mission of the national coordination committee,” he said.

Transparency International (TI) Cambodia executive director Pech Pisey said the onsite visit is to review compliance with the FATF’s recommendations based on clear indicators that they had given in their previous report.

“For Cambodia, Prime Minister Hun Sen has stressed strong political will in getting Cambodia off the grey list. That is the right attitude and approach and we NGOs welcome this commitment. It is important that the FATF’s recommendations are effectively carried out, especially those related to law enforcement,” he said.

Pisey urged increased law enforcement operations against money laundering and cooperation with relevant international entities to combat it. He added that the NGOs have seen signs of the government’s increased commitment, but they are urging more concrete enforcement actions to deal with the problem comprehensively.


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