The National Assembly (NA) on Thursday approved the draft law on anti-money laundering and terrorism financing.
The move comes a year after Cambodia was placed on the Financial Action Task Force (FATF) “grey list” and nearly a month after the EU requested its parliament to add Cambodia and 11 other countries into a list of states that “pose significant threats” to its financial systems for failures to tackle money laundering and financing terrorism.
In a press release, the NA said the draft law consists of nine chapters and 47 articles. Another bill on combating proliferation financing had eight chapters and 24 articles. They were approved by the Council of Ministers last month.
Government spokesperson Phay Siphan said last month that the FATF decision required Cambodia to improve the legal frameworks around combating money-laundering.
Cambodia, therefore, has to amend the law on anti-money laundering and terrorism financing before September, while the law on combating proliferation financing should have been passed last month.
Deputy National Police chief and the Ministry of Interior’s central security department director Dy Vichea told The Post on Thursday this will help fix loopholes in Cambodia’s money-laundering laws.
“We have so far had loopholes such as collaboration with foreigners. Domestically, it is not very problematic, but it is problematic with foreigners and makes it impossible to move forward,” he said.
He said last year, the police launched investigations into 71 cases of money laundering involving drugs, economic fraud offences and others.
Thirteen of the 71 cases were sent to court and six people were charged. The police are continuing to investigate the remaining cases. In the first five months of the year, the courts had charged only two people with fraud and drug crimes.
Vichea said Cambodia’s placement on the EU’s list of financially risky states came as surprise because, in the past, the Kingdom had not received many requests from it to clamp down on money-laundering crimes.
“Upon hearing this news, ministries, institutions and leaders have met for talks to better understand the formula used to come up with that conclusion.
“We have worked with FATF and we know their formula. So my side wants to meet with EU experts and ask why and how we can cooperate,” Vichea said.
Vichea said Cambodia has collaborated with the US, South Korea, Singapore, Thailand, Japan and other countries, as well as Interpol. In that collaboration, Cambodia has broadened its knowledge of money-laundering, especially with cybercrime.
Citizens, he said, should remain vigilant and report money laundering to the police if they suspect such activities.
Pech Pisey, the executive director of Transparency International (TI) Cambodia, welcomed the laws.
“The adoption of the anti-money laundering and terrorism financing law is a significant step in the right direction for Cambodia.
“Cambodia also shows slight improvements in public transparency and accountability, but still lacks proper investigation into money laundering and terrorist financing.
“The Kingdom has also not yet complied with customer due diligence requirements, record keeping and reporting of suspicious transactions in the financial sector.
Pisey said the EU’s blacklist is just to enforce the Cambodian [money laundering] framework as one of the pillars of its legislation to combat money laundering and terrorism financing.
He said banks and other gatekeepers are required to apply enhanced vigilance in business relationships and transactions involving high-risk third countries.
“The types of enhanced vigilance requirements are basically extra checks and control measures,” he said.
He urged the government to consult with international experts, civil society, media and the private sector to ensure the laws are globally acceptable.