Foreign minister Prak Sokhonn urged international NGOs to respect Cambodia’s Law on Accounting and Auditing, noting that less than 50 per cent of them have submitted their required annual financial reports.
While presiding over the opening of the third round of consultative meetings with foreign NGOs on May 3, Sokhonn said their compliance with the laws would contribute to the prevention of Cambodia from falling back into the “grey list” of the Financial Action Task Force (FATF) – an intergovernmental body set up to develop policies to combat international money laundering and financing of terrorism.
The meeting was held at the Ministry of Foreign Affairs and International Cooperation with the theme “Strengthening the implementation of the Law on Accounting and Auditing”.
Sokhonn recalled that the first and second consultative meetings were held in 2019 and 2020 respectively, before they were interrupted by the Covid-19 pandemic. He said the meetings were held to raise awareness on the NGOs’ obligations under the Law on Accounting and Auditing, which was promulgated in 2016.
“Following its promulgation, the government gave nonprofits three years grace period to comply with the law, by strengthening their institutional governance and human resources capacity,” he explained.
Through the law, nonprofits have an obligation to submit accounting reporting, financial statements that comply with Cambodian accounting standards and independent audits of these statements.
“I would like to bring to your attention that despite the three-year grace period, less than 50 per cent of the 339 foreign NGOs that are registered with the foreign ministry have submitted the required financial reports,” said Sokhonn.
“This is indeed a concern for us,” he stressed.
Sokhonn, who is also deputy prime minister, said the Paris-based FATF removed Cambodia from the grey list of high-risk countries for money-laundering on February 24. The delisting, he added, was the result of the strong commitment of the government and all relevant stakeholders, including foreign NGOs, as reporting entities.
“We are now conducting a national risk assessment to address the few remaining shortcomings. Let me reassure you that at no time will we allow our country to slide back onto the grey list. Needless to say, this would have a huge impact on the Kingdom’s socio-economic development,” he said.
He said the government still attaches great importance to maintaining regular dialogues with all of the foreign NGOs operating in Cambodia.
“Your contributions to the socio-economic development of our country and the wellbeing of our people are indeed deserving of praise,” he added.
While praising their contribution, Sokhonn also called on them to respect the Law on Association and Non-Governmental Organisations (LANGO).
“LANGO is not aimed at restricting the activities of any NGO. It is about ensuring their proper governance, driven by the core principles of transparency, accountability, integrity and responsibility under the laws currently in force,” he said.
He called on them to remain neutral and refrain from conducting activities that contradict the provisions of LANGO, and respect any MoUs signed with the ministry, as the obvious consequences of non-compliant activities was that they may jeopardise the political stability of the country.
“They should also avoid becoming entangled in activities that are tantamount to supporting money laundering, or the financing of terrorism. This is why they should only carry out financial transactions through banking and financial institutions that are licensed by the National Bank of Cambodia [NBC],” he said.
According to Sokhonn, LANGO is currently under the process of amendment, with 16 articles having been identified in the first round of consultations with an inter-ministerial taskforce, civil society organisations and other stakeholders.
Yong Kim Eng, president of the People’s Centre for Development and Peace, said the consultative meeting was an excellent opportunity for the various parties to debate and discuss the topics that were on the agenda.
He noted, however, that it was very rare for NGOs to be involved in any money laundering activities.
“It is important that foreign NGOs be motivated to support good governance that prevents money laundering in the long term,” he said, adding that the public should also be encouraged to speak up if they suspect laundering activities are taking place.
