Logo of Phnom Penh Post newspaper Phnom Penh Post - Cambodia third in global index of vulnerability to financial crime

Cambodia third in global index of vulnerability to financial crime

Content image - Phnom Penh Post

Cambodia third in global index of vulnerability to financial crime

Only Afghanistan and Iran fare worse on list of countries ranked from most to least susceptible to money laundering

Corruption, a weak judiciary and lack of transparency across the finance sector has led to Cambodia retaining a third-place ranking in a global index that measures susceptibility to money laundering and terrorist funding.

The 2014 edition of the Basel Anti-Money Laundering Index, compiled by the Switzerland-based Basel Institute on Governance, put Cambodia behind only Afghanistan and Iran on a list of 162 countries ranked from most to least susceptible.

Assessed on a risk scale from zero to 10, using data from sources including the World Bank and the World Economic Forum, Cambodia scored 8.39. Finland was assessed to be the least risky country with a rating of 2.51.

Cambodia has not improved on its third-place ranking since the index was developed in 2012.

Preap Kol, executive director of Transparency International Cambodia, said yesterday that a culture of secrecy in the banking sector had combined with the country’s endemic corruption to form an “explosive cocktail” that exposed Cambodia to money laundering.

“While the government has timidly attempted to police the financial sector, the country still lacks adequate legal frameworks and mechanisms for accountability and transparency,” Kol said. “This lack of regulation can only be exploited by money-launderers.”

Kol said Cambodia’s rapid growth without the effective implementation of the anti-money laundering law (AML) left the Kingdom increasingly vulnerable to financial crime.

“A law on access to information is also much needed, as it would allow us to access and monitor financial information,” he said.

But ANZ Royal Bank CEO Grant Knuckey said Cambodia’s standing in the index was not an accurate account of the banking climate, where improvements aimed at stamping out money laundering have been instituted.

“This is not a fair assessment of the banking industry itself, as the frameworks put in place by the National Bank of Cambodia for suspicious transaction reporting and the role of the FIU (Financial Intelligence Unit) have improved monitoring and the degree of oversight of AML across the banking sector,” Knuckey said.

Knuckey said the results of the index appear to be based on a number of broader factors such as perceived corruption and general transparency that may not capture the improvements being made specifically on AML.

As for ANZ Royal, it has tight controls to ensure AML standards are upheld, Knuckey added.

“These work both at a customer on-boarding stage and at an individual transaction level.

The integrity of these processes is also regularly tested and audited,” he said via email.

The National Bank of Cambodia could not be reached for comment yesterday.

MOST VIEWED

  • LPG gas explosion injures 13 people, including foreigners, in Siem Reap

    An explosion on Wednesday at a liquid petroleum gas (LPG) car and tuk-tuk refuelling station in Siem Reap city has left 13 people, including an American and a Briton, suffering burns. The seven most severely burned, including a provincial police officer, were sent to a Thai

  • Over 100 Chinese nationals to be deported for online scam

    The Ministry of Interior is planning to deport 128 Chinese nationals after they were arrested in Preah Sihanouk province on Wednesday for their alleged involvement in an online money extortion scam. Y Sokhy, the head of the Department of Counter-terrorism and Transnational Crime, told The Post

  • The French mother navigating the capital in her own personal tuk-tuk

    French woman Cecile Dahome gracefully manoeuvres her tuk-tuk through the manic streets of Phnom Penh with the precision of a Japanese katana before a herd of motorcyclists, attempting to perform illegal U-turns, cuts her off. The riders, like baby ducklings following their mother’s tracks,

  • More than 800 people test positive for HIV in 2018

    The National Aids Authority (NAA) said more than 800 people tested positive for human immunodeficiency virus (HIV) last year, joining over 76,000 others aged between 15 and 49 in the Kingdom already infected with the virus. The spread of HIV/AIDS in the Kingdom is showing few signs of