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

  • Ministry orders all schools, public and private, to close for SEA Games

    From April 20 to May 18, all public and private educational institutions will be closed to maintain order and support Cambodia's hosting of the 32nd SEA Games and 12th ASEAN Para Games, said a directive from the Ministry of Education, Youth and Sport. Cambodia will host the

  • Newest horror film showcases unique Khmer culture, identity

    At first glance, the trailer to new horror sensation The Ritual: Black Nun looks like a western-produced feature film. As the story reveals itself to the viewers, it becomes clearer that this is a Khmer film, with a strong Cambodian identity and close links to

  • Almost 9K tourists see equinox sunrise at Angkor Wat

    Nearly 9,000 visitors – including 2,226 international tourists – gathered at Angkor Wat on March 21 to view the spring equinox sunrise, according to a senior official of the Siem Reap provinical tourism department. Ngov Seng Kak, director of the department, said a total of 8,726 people visited Angkor Wat to

  • Angkor Beer strengthens national pride with golden new look and fresher taste

    Angkor Beer – the "Gold of Angkor" – has a new look, one that is more stylish and carries a premium appeal, as well as a fresher taste and smoother flavour, making it the perfect choice for any gathering. Angkor Beer recently launched its new design, one

  • Water supply authority assures public shortages over early ‘24

    The Phnom Penh Water Supply Authority (PPWSA) asked for understanding from Phnom Penh residents in some communes where water pressure is weak. They assured residents that all supply issues will be resolved by early 2024, but have suggested that residents use water sparingly in the meantime.

  • Khmer ballet documentary debuts April 1

    A new documentary, The Perfect Motion, or Tep Hattha in Khmer, will premiere to the public on April 1. The documentary film follows two intertwined storylines: the creation of a show called Metamorphosis by the late Princess Norodom Buppha Devi (her very last production) and the