Cambodia armed with money laundering laws

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Police confiscate $2,200,000 in cash brought in by two foreigners at an airport last year. Police

Money laundering will now carry a penalty of up to five years in prison while those convicted of financing terrorists will be jailed for up to 20 years, according to new laws promulgated by King Norodom Sihamoni and seen by The Post on Thursday.

Comprising nine chapters and 47 articles, the laws aim to eliminate money laundering and terrorist financing in Cambodia.

The laws require reporting entities including banks, financial establishments, investment companies, money transfer services, real estate agents, casinos, NGOs and relevant services and businesses to regulate their activities and store detailed information about their clients.

Article 12 requires the reporting of cash transactions over a certain threshold and transactions flagged by the Cambodian Financial Intelligence Unit (CAFIU).

If suspicious cash transactions involve terrorist financing, they have to be reported within 24 hours.

Article 30 of the law states: “The government had to prepare measures to curtail cash use in commercial transactions and encourage making non-cash payments.”

Penalties for disobeying the new laws could include warnings, fines, business licence revocations and the removal of officials or business managers from their positions.

Article 38 stipulates that money laundering crimes carry a prison sentence of between two and five years and a fine of 100 million to 500 million riel ($25,000 to $50,000) in addition to penalties stipulated in the Criminal Code. Legal entities could be fined up to one billion riel.

Article 39 states that legal and individual entities that fail to report transactions as prescribed by the law will be fined and jailed for up to one month.

Article 44 states that terrorist financing crimes carry a prison sentence of 10 to 20 years. Anyone who knowingly engages in offering property, funds or other services to entities involved with terrorism is liable to be prosecuted.

On May 7, the EU requested its parliament to add Cambodia and 11 other countries to a list of states that “pose significant threats” to the EU’s financial systems for failures to tackle money laundering and terrorism financing.

In February last year, Cambodia was also re-listed in the “grey list” of the Financial Action Task Force (FATF), a decision Cambodia said was “unfair”.

Transparency International Cambodia executive director Pech Pisey said on Thursday that the adoption of the law on anti-money laundering and terrorist financing is a welcome step in the right direction for Cambodia.

He encouraged the government and relevant authorities to enforce the law effectively and comply with anti-money laundering obligations. He said it should perform its due diligence by properly checking on customers and investments and keep records of suspicious activities.

“I also see the need for enhancing the competency of the CAFIU and relevant authorities to investigate and prosecute money laundering and terrorist financing offences.

“Effective domestic and international cooperation is also fundamental as money laundering and terrorist financing are often linked to international crimes,” he said.

Last week, the King promulgated a law on combating proliferation financing, which concerns the offering of financial services which lead to the proliferation of nuclear, chemical, or biological weapons.

The law consists of eight chapters and 24 articles.

Article 20 of the law states that individuals who sell or rent property to a unit considered to be terrorists will be imprisoned for up to 15 years and fined up to 200 million riel.

Separately, Prime Minister Hun Sen will chair a Cabinet meeting on Friday to review and approve two new draft laws – a bill on management, use and handling of state property and a draft law on commercial gambling management – said a notice issued by the Council of Ministers.