Logo of Phnom Penh Post newspaper Phnom Penh Post - Ministry rebuts reports of Chinese money laundering through property market

Ministry rebuts reports of Chinese money laundering through property market

A view of Phnom Penh’s construction sites from the Mekong River at the beginning of this year.
A view of Phnom Penh’s construction sites from the Mekong River at the beginning of this year. Moeun Nhean

Ministry rebuts reports of Chinese money laundering through property market

The spokesman for the Ministry of Foreign Affairs hit back at news reports about Chinese investors laundering their money through Cambodia’s real estate market on Monday, calling them “baseless”.

Speaking to a group of reporters after Foreign Minister Prak Sokhonn met with Indian Ambassador Manika Jain, Sounry said Cambodian authorities “are ready to prevent any offence” related to money laundering.

“Some countries, some institutions, do not trust the good relationship between Cambodia and China and often make accusations on this or that,” Sounry said. “What I know is Cambodia has its own authority to combat laundering activities. We have our measures, we have our principles and we have our laws.”

Sounry was apparently referring to a New York Times article published January 9 about the boom in Chinese interest in Cambodian real estate and the opportunities that Cambodia’s cash economy presents for money laundering.

One analyst quoted in the article, Bangkok-based political risk consultant George McLeod, said the lax controls among Cambodian banks allow Chinese buyers to launder cash from criminal activities through Cambodian real estate.

McLeod could not be reached today.

Cambodia ranks among the most vulnerable countries for money laundering in the world, according to the Basel Anti-Money Laundering Index, which pulls data from 17 different sources – including the World Bank, World Economic Forum and the Financial Action Task Force – to assess risk.

Out of 146 countries, Cambodia ranks 9th for risk of becoming a hotspot for money laundering, after Uganda and before Tanzania, according to the index.

Miguel Chanco, lead analyst at the Economist Intelligence Unit, called Cambodia’s law enforcement against money laundering “inadequate at best” due to widespread corruption and lack of government transparency.

“Real estate is certainly an area that is ripe for such activity given the often huge sums of money involved and the numerous players and moving parts involved for a single project,” Chanco said in an email.

Political analyst Meas Nee agreed that Chinese investment in Cambodia should raise concerns due to Cambodia’s weak monitoring of foreign investments.

“The biggest concern is that our mechanism to check investments in Cambodia isn't strong enough like other countries,” Nee said. "So, our country becomes a place where they come to do money laundering.”

Additional reporting by Daphne Chen

MOST VIEWED

  • Research key to Kanitha’s rep for expertise

    Sok Kanitha is used to weighing in on controversial issues using a confident approach that signals expertise and authority, and a recent video she made was no exception. Her “Episode 342: The History of NATO” video went live on January 16, 2023 and immediately shot to 30,000 likes and 3,500

  • Cambodia maintains 'Kun Khmer' stance despite Thailand’s boycott threat

    Cambodia has taken the position that it will use the term "Kun Khmer" to refer to the sport of kickboxing at the upcoming Southeast Asian (SEA) Games, and has removed the term Muay from all references to the sport. Despite strong reactions from the Thai

  • Artificial insemination takes herd from 7 to 700

    Some farms breed local cows or even import bulls from a broad for the purpose of breeding heavier livestock for meat production. One Tbong Khnum farmer has found a more efficient way. Hout Leang employs artificial insemination to fertilise local cows. Thanks to imported “straws”

  • Chinese group tours return to Cambodia starting Feb 6

    Cambodia is among 20 countries selected by Beijing for a pilot programme allowing travel agencies to provide international group tours as well as flight and hotel packages to Chinese citizens, following a three-year ban. As the days tick down until the programme kicks off on February 6,

  • Capital-Poipet express rail project making headway

    The preliminary results of a feasibility study to upgrade the Phnom Penh-Poipet railway into Cambodia’s first express railway indicate that the project would cost more than $4 billion and would take around four years to complete. The study was carried out by China Road and

  • Thai boxers to join SEA Games’ Kun Khmer event

    The Cambodian SEA Games Organising Committee (CAMSOC) – together with the Kun Khmer International Federation (KKIF) and Khmer Boxing Federation – have achieved a “great success” by including Kun Khmer in the upcoming biennial multi-sports event on its home soil for the first time, said a senior