Cambodia’s anti-money laundering agency is unable to investigate or penalise financial institutions that break the law, leaving the country open to exploitation by organised crime, according to a senior official in the unit.
The Financial Action Task Force (FATF) – the top international anti-money laundering and counterterrorism financing body – ceased its monitoring of Cambodia in February, even though the Financial Intelligence Unit (CAFIU), the state agency tasked with investigating and prosecuting financial crimes, was so under-staffed and under-resourced it had not investigated a single financial institution since its founding in 2008.
In early 2014, Cambodia was downgraded to FATF’s “dark-grey list” for lacking an asset-freezing instrument or a currency declaration system. The downgrade left the Kingdom just one step away from being blacklisted as a high-risk jurisdiction.
The government passed a sub-decree only a month later, which amended the 2007 Anti-Money Laundering Law to meet FATF’s requirements, leading the body to remove Cambodia from the list.
However, despite the progress on paper, CAFIU adviser Phan Ho told Daniel Glaser, assistant secretary for terrorist financing at the US Treasury Department, that while the unit was “working very hard to enforce” the law it “had only 10 people to inspect 38 banks and 37 [micro-finance institutions]”.