Cambodia retains attribute of being haven for black money

Cambodia Retains Attribute Of Being Haven For Black Money
There is no shortage of Chinese-funded casinos in Sihanoukville, Cambodia

Despite effort by the government, among them the introduction of foreign exchange controls, Cambodia is finding it hard to shake off its reputation as a “haven” for black money from a variety of origins.

The country remains among nations most vulnerable to the flow of illegal money, according to the latest report coming from the Financial Action Task Force (FATF), a Paris-based global money laundering and terrorism financing watchdog.

The latest so-called “grey list” issued by the FATF contains Camodia alongside the Bahamas, Botswana, Ghana, Iceland, Mongolia, Pakistan, Panama, Syria, Trinidad and Tobago, Yemen and Zimbabwe.

FATF was formed in 1989 as part of a G7 initiative against money laundering. In 2001, its mandate was expanded to include terrorism financing. The FATF has 41 member countries, including Cambodia. To conduct the evaluation, representatives from the Asia-Pacific Group on Money Laundering Secretariat and some member countries visited each country to meet with relevant government agencies and officials.

It is common knowledge that weak regulations and lax law enforcement have made Cambodia a favorite destination for “dirty money.” Under the 1997 Foreign Exchange Law, there are no restrictions on foreign exchange operations, including the purchase and sale of foreign exchange and the transfer of all types of international settlements. Investors are not required to report on transactions of funds, a burden which rests solely on the bank as authorised intermediaries.

As per the law, import or export of any means of payment equal to or exceeding $10,000 or an equivalent amount needs to be reported to customs authorities at the relevant border crossing point, and the customs authorities should transmit this information on a monthly basis to the national bank, but this is not done on a regular basis. There are, however, no restrictions on the amount that can be carried in or out as long as some sort of documentation of its origin can be presented.

There are also currently no restrictions on the repatriation of profits or capital derived from investments either in Cambodia nor on most transfers of funds abroad.

Experts at a recent anti-money laundering workshop attributed the rapid growth of the casino and real estate sectors to money laundering. Most of the illegal money that flows into Cambodia is believed to come from China.

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There is no shortage of Chinese-funded casinos in Sihanoukville, Cambodia Despite effort by the government, among them the introduction of foreign exchange controls, Cambodia is finding it hard to shake off its reputation as a “haven” for black money from a variety of origins. The country remains among nations most vulnerable to the flow of illegal money, according to the latest report coming from the Financial Action Task Force (FATF), a Paris-based global money laundering and terrorism financing watchdog. The latest so-called “grey list” issued by the FATF contains Camodia alongside the Bahamas, Botswana, Ghana, Iceland, Mongolia, Pakistan, Panama, Syria,...

Cambodia Retains Attribute Of Being Haven For Black Money
There is no shortage of Chinese-funded casinos in Sihanoukville, Cambodia

Despite effort by the government, among them the introduction of foreign exchange controls, Cambodia is finding it hard to shake off its reputation as a “haven” for black money from a variety of origins.

The country remains among nations most vulnerable to the flow of illegal money, according to the latest report coming from the Financial Action Task Force (FATF), a Paris-based global money laundering and terrorism financing watchdog.

The latest so-called “grey list” issued by the FATF contains Camodia alongside the Bahamas, Botswana, Ghana, Iceland, Mongolia, Pakistan, Panama, Syria, Trinidad and Tobago, Yemen and Zimbabwe.

FATF was formed in 1989 as part of a G7 initiative against money laundering. In 2001, its mandate was expanded to include terrorism financing. The FATF has 41 member countries, including Cambodia. To conduct the evaluation, representatives from the Asia-Pacific Group on Money Laundering Secretariat and some member countries visited each country to meet with relevant government agencies and officials.

It is common knowledge that weak regulations and lax law enforcement have made Cambodia a favorite destination for “dirty money.” Under the 1997 Foreign Exchange Law, there are no restrictions on foreign exchange operations, including the purchase and sale of foreign exchange and the transfer of all types of international settlements. Investors are not required to report on transactions of funds, a burden which rests solely on the bank as authorised intermediaries.

As per the law, import or export of any means of payment equal to or exceeding $10,000 or an equivalent amount needs to be reported to customs authorities at the relevant border crossing point, and the customs authorities should transmit this information on a monthly basis to the national bank, but this is not done on a regular basis. There are, however, no restrictions on the amount that can be carried in or out as long as some sort of documentation of its origin can be presented.

There are also currently no restrictions on the repatriation of profits or capital derived from investments either in Cambodia nor on most transfers of funds abroad.

Experts at a recent anti-money laundering workshop attributed the rapid growth of the casino and real estate sectors to money laundering. Most of the illegal money that flows into Cambodia is believed to come from China.

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