Cambodia

Last updated: 12/01/2016


CENTRAL AUTHORITY FOR REPORTING

Pursuant to Chapter IV of the Law on Anti-Money Laundering and Combating the Financing of Terrorism (2007) (AML LAW), the Cambodian Financial Intelligence Unit (CAFIU) is the central authority for reporting with respect to anti-money laundering laws. The CAFIU was established on January 29, 2008 and the permanent secretariat is in the National Bank of Cambodia (NBC). Article 2 of the AML LAW enumerates the major duties and functions of the CAFIU, which are the following:

(a)       To receive suspicious and cash transaction reports and information suspected of money laundering or terrorism financing;

(b)       To collect information that the CAFIU considers relevant to money laundering or terrorism financing activities which are publicly available, including commercially available databases, as well as other information necessary to carry out its functions, such as information collected maintained and stored in the database by the reporting entities;

(c)       To have access on a timely basis to financial, administrative and law enforcement information that is necessary to undertake its functions set forth by this article 2, including information collected and maintained by, or stored in the databases of, any public entities;

(d)       To analyse and assess all suspicious transaction reports and related information in order to determine whether there are reasonable grounds to believe that a money laundering offense or a terrorism financing offense has been committed and in such cases refer the matter to the relevant law enforcement authority for criminal investigation;

(e)       To compile statistics and records on suspicious and cash transaction reports received, analysed and forwarded to the law enforcement authorities and disseminate information to other public agencies on related matters as required;

(f)        To provide feedback to reporting entities and other relevant agencies regarding the outcome of suspicious transaction reports or information provided to it under the Law on Anti-Money Laundering and Combating Financing of Terrorism;

(g)       To ensure that personal information under its control is protected from unauthorized disclosure; and

(h)       To enhance public awareness and understanding of matters related to money laundering and terrorism financing.

 

The Prakas on Structure, Functions and Duties of the Cambodian Financial Intelligence Unit (2009) determines the internal structure of CAFIU. CAFIU has four internal divisions: (1) Legal Administrative and Information Technology Division,  (2) Transaction Report Analysis Division, (3) Compliance Monitoring Division, (4) Cooperation Division. These four divisions have distinct functions and duties.

Individuals and entities that are subject to the requirements of the AML Law are the following:

  • Any entity regulated by the NBC, including banks;
  • Non-bank financial institutions including securities brokerage firms and insurance companies, investment and personal funds, investment companies and companies for managing investment fund;
  • real estate agents;
  • post offices operating payment transactions;
  • lawyers, notaries, accountants, auditors, investment advisors and asset managers;
  • casinos and other gambling institutions;
  • non-governmental organizations and foundations engaging in business activities and fund raising;
  • trust companies and other service provider companies; and
  • any other institutions or professions which are designated by CAFIU to fall within the scope of the Law on Anti-Money Laundering and Combating the Financing of Terrorism and which are not supervised by NBC.

 

All entities and individuals which are subject to the requirements of the AML Law are under the supervision of CAFIU and are obliged to CAFIU under the anti-money laundering laws and regulations.

 

The chairman of the Board of Directors of CAFIU is appointed by the Prime Minister and proposed by the NBC. Other members of the board of directors shall be a person appointed by each of the NBC, Council of Ministers, Ministry of Economy and Finance, Ministry of Interior, and the Ministry of Justice.


FURTHER ANTI-MONEY LAUNDERING REGULATOR(S) AND SUPERVISORY BODIES

IThe National Bank of Cambodia.

The Law on the Organization and Functioning of the National Bank of Cambodia (1996) refers to the NBC as the “Central Bank” and grants it broad powers to supervise banks. Under the Law on Banking and Financial Institutions (LBFI) (1999), the NBC shall license and supervise banks and oversee payment systems in Cambodia. The NBC’s powers include the ability to require that banks take appropriate measures to identify clients, and to monitor compliance with anti-money laundering laws and regulations.

Under Article 40 of the LBFI: The NBC, as the central bank, supervises the banking system and its related activities such as the money market, the interbank settlement system, and financial intermediation. To this end the NBC shall:

(a)                issue licenses and define the licensing process;

(b)                prepare and keep up to date a list of licensed banks which shall be published in the Official Gazette of the Kingdom of Cambodia and in the Bulletin of the National Bank of Cambodia;

(c)                be empowered to issue regulations for the implementation of this law which authorise the NBC to determine the following:

                        i.                     the amount of minimum capital and the nature of the assets it is backed with;

                      ii.                     prudential ratios regarding particularly liquidity, solvency, risk diversification, foreign exchange exposure, and market risk exposure;

                     iii.                     the valuation rules for accounting balances;

                     iv.                     the conditions under which participations can be taken and held in the capital of a covered entity or a financial institution;

                      v.                     the conditions under which participations can be taken and held in the capital of other banking or financial companies;

                     vi.                     which, if any, debts to be regarded as doubtful, and the provisioning thereof;

                   vii.                     the related accounting standards, the rules for the consolidation of accounts, and the rules of the disclosure of accounting statements;

                  viii.                     the conditions applicable to the banking and financial operations that may be carried out in their relations with clients;

                     ix.                     the organisation of interbank joint services, including the centralization of financial information, risks, and overdue debts;

                      x.                     to grant individual, exceptional, and temporary exemptions;

                     xi.                     the requirements and authorisation rules concerning modifications in the business name, legal form, capital distribution, management and activities of a covered entity, or of the head office in the case of a branch of a foreign bank;

                   xii.                     regulate the practice of door-to-door selling of banking or financial services;

                  xiii.                     after consultation with the covered entities’ professional association, the rules governing the operation of a deposit guarantee system; and

                  xiv.                     the modalities for enforcing this law in light of the differences concerning the legal form of covered entities, the scope of their network, and the nature of their activities.

(d)                The NBC:

                        i.                     shall publish all regulations it issues in the Official Gazette of the Kingdom of Cambodia and in the Bulletin of National Bank of Cambodia;

                      ii.                     shall supervise the banking system through permanent off-site monitoring and periodic on-site examinations of each covered entity; if the need arises, on-site examinations may be extended to a subsidiary of a covered entity or to any other related entities, including shareholders;

                     iii.                     shall organise or supervise any interbank settlement system;

                     iv.                     may require that covered entities, public offices, auditors, and any other individual or legal entity disclose information considered as useful for its mission; and

                      v.                     may take disciplinary action against regulated persons and entities (in accordance with articles 52 and 54 of LBFI).

Pursuant to article 52 of the LBFI, if a covered entity has contravened a provision of the laws or regulations governing its activities, has failed to heed a warning or not complied with an injunction, the NBC may impose one of the following disciplinary sanctions:

 

(a)   caution;

(b)   reprimand;

(c)   prohibition on the execution of certain operations and any other limitations on the carrying on of business;

(d)   temporary suspension of one or more of the executives, with or without appointment of a provisional administrator;

(e)   compulsory resignation of one or more of the executives, with or without appointment of a provisional administrator;

(f)    setting up a provisional administration;

(g)   withdrawal of the license and liquidation.

Furthermore, the supervisory authority may, either in place of or in addition to these sanctions, impose a fine not exceeding the minimum capital of the covered entity[i].

 

The Anti-Corruption Unit.

Certain provisions of the criminal code related to money-laundering fall under the anti-corruption regime in Cambodia. The Anti-Corruption Unit (ACU), a special body tasked with investigating and enforcing crimes of corruption, has powers to investigate and enforce anti-money-laundering laws which fall within the scope of the Anti-Corruption Law. In particular, the ACU may

(a)    monitor relevant bank accounts or other accounts which are described to be the same as bank accounts;

(b)   request authenticated documents related to bank accounts, other accounts, and other financial and commercial documents;

(c)   monitor, oversee, eavesdrop, record sound and take photos, and engage in phone tapping;

(d)   request documents stored in the electronic systems; and

(e)   conduct operations aimed at collecting real evidence.

[i] The banking and financial institutions operated commercial transactions in 1. credit operations for valuable consideration, including leasing, guarantees and commitments under signature; 2. the collection of non-earmarked deposits from the public; 3. the provision of means of payment to clients and the processing of said means of payment in national currency or foreign exchange. According to Article 11 of the Law on Banking and Financial Institutions, “a covered entity shall be incorporated either as a public company under commercial law or as a cooperative or a mutual noncommercial society subject to special statute.”


ARE LAWYERS COVERED BY ANTI-MONEY LAUNDERING LEGISLATION?

Yes, under Chapter II, Article 4 of the AMLLAW:, the following institutions and professions are covered:

(a)       banks, including branches of foreign banks;

(b)       non-bank financial institutions, including securities brokerage firms and insurance companies micro finance institutions;

(c)       micro finance institutions;

(d)       credit cooperatives;

(e)       leasing companies, investment and pension funds, investment companies and companies for managing investment funds;

(f)        exchange offices;

(g)       money remittance services;

(h)       real estate agents, building and land;

(i)         dealers in precious metals, stones and gems;

(j)         post office operating payment transactions;

(k)       lawyers, notaries, accountants, auditors, investment advisors and asset managers when they prepare for or carry out transactions for their clients concerning the activities listed in Article 5 of the AML Law;

(l)         casinos and other gambling institutions;

(m)     non-governmental organizations and foundations engage in business activities and fund raising;

(n)       any other institutions or professions that are designated by the CAFlU to fall within the scope of the present Law.

 

Article 5 of the AML Law lists the activities which, when performed by lawyers, subject the relevant lawyer, or lawyers, to obligations created by the anti-money laundering laws and regulations. The activities listed in Article 5 of the AML Law are the following:

 

(a)       Buying and selling real estate, building and land;

(b)     Managing of client money, securities or other assets such as the management of  banking or securities accounts; or the organisation of contributions for the creation, operation or companies management.

(c)        Creation, operation or management of legal persons or arrangements, and buying and selling of business entities;

(d)       Trust or company providing services when they prepare for or carry out transactions for a client concerning the following activities:

                                 i.                        acting as a formation agent of legal persons;

                               ii.                        acting as or arranging for another person to act as a director or

                              iii.                        secretary of a company, a partner of a partnership, or a similar position in

                              iv.                        relation to other legal persons;

                               v.                        providing a registered office; business address or

                              vi.                        accommodation, correspondence or administrative address for a company, a

                            vii.                        partnership or any other legal person or arrangement;

                           viii.                        acting as or arranging for another person to act as a trustee of an

                              ix.                        express trust

                               x.                        acting as or arranging for another person to act as a nominee

                              xi.                        shareholder for another person.

 

Prakas on Anti-Money Laundering and Combating the Financing of Terrorism:

Under Article 11 of the Prakas on Anti-Money Laundering and Combating the Financing of Terrorism, “banks and financial institutions should satisfy themselves about transactions passing through lawyers and accountants clients' accounts that give cause for concern, and should report those transactions to Financial Intelligence Unit, if any suspicion is aroused.”

Prakas #12-010-206 (NBC) of December 21, 2010 on Anti-Money Laundering and Combating the Financing of Terrorism Related to All Reporting Entities not regulated by the National Bank of Cambodia

Lawyers and notaries are defined by this Prakas as “reporting entity” and they are obliged by this Prakas to report the money-laundering-suspicious issues to CAFIU when engaged in any of the activities listed in article 5 of the AML Law and above.


NAME THE LAWS REGARDING ANTI-MONEY LAUNDERING PROCEDURES

Legislation

 

Law on Anti-Money Laundering and Combating the Financing of Terrorism (2007) (AML Law) – Provides for the definition of money laundering, prevention and control measures, and professions and industries governed by the law. Some important prevention mechanisms are reporting suspicious transactions, know-your-customer provisions, record keeping, and employee training.

Prakas on Anti-Money Laundering and Combating the Financing of Terrorism(2008)–Issued by the NBC, this regulation gives additional details of the anti-money laundering and financing terrorism prevention methods in Cambodia. The scope of this regulation is the same as the AML Law. The regulation addresses, among other things, client acceptance policies, risk profiling, prohibiting anonymous accounts and accounts in fictitious names, client due diligence, and relationships with individual, corporate and non-profit institutions and other correspondence banks.

Prakas on Anti-Money Laundering and Combating the Financing of Terrorism Related to All Reporting Entities not Regulate by the National Bank of Cambodia (2010) – This regulation applies anti-money laundering and financing of terrorism obligations which are similar to those imposed by the prakas above and the AML Law to additional persons and entities by adopting a wider definition of “reporting entity.” Such additional “reporting entities” include businesses NGOs, investment funds, casinos, and trust companies.

Sub-decree on Freezing of Property of Designated Terrorists and Organizations (2014)– Provides for more effective cooperation between the Ministry of Justice, the Ministry of Foreign Affairs, and CAFIU for the purpose of identifying and freezing assets of organisations or persons financing terrorist activities. Assets may be frozen for an indefinite period, and under article 11.b, an affected third party may demand removal of an asset or assets from the list. Article 11.b does not provide any guidance regarding the standard for unfreezing assets pursuant to a third party request and the circumstances under which assets will be unfrozen remains unclear.

Law on amendment of article 3, article 29 and article 30 of law on anti money laundering and combating the financing of terrorism (2013)–Revises and supplements some definitions in the AML Law. The amendment, among other things, adds penalties for legal entities and creates a new offense of financing terrorism. It also adds new sanctions for co-mingling property and places theevidentiary burden on a person opposing a freeze order.

Law on Drug Control (1996)– Chapter VI of the Law on Drug Control addresses the prevention and detection of money-laundering related to illicit trafficking of drugs. It creates an obligation to declare the international transfer of valuables, imposes regulations on the manual exchange of currencies, and places obligations on casinos and financial organisations. Article 25 establishes a commission to combat against money laundering generated from the illicit trafficking of drug and which is placed under the power of the Prime Minister.

Law Banking and Financial Institutions(1999) – see the section titled “FURTHER ANTI-MONEY LAUNDERING REGULATOR(S) AND SUPERVISORY BODIES” above for information.

 

Anti-Corruption Law (2010) - see the section titled “FURTHER ANTI-MONEY LAUNDERING REGULATOR(S) AND SUPERVISORY BODIES” above for information.

Penal Code 2009. Article 407 of the Penal Code defines money laundering as an act of providing, by any means, the false justifications to conceal the direct or indirect benefits of a felony or a misdemeanor. Under Article 408, a person who commits the crime of money laundering shall be sentenced to imprisonment from two to five years, and be fined from four million Riels up to value of the funds, assets and properties which were the subject of money laundering. There may also be accomplice liability for assisting in any acts prohibited by article 407 and an accomplice may be treated as a perpetrator for the purpose of sentencing.

A Legal entity can also be criminally charged of money laundering, as per the conditions set forth in Article 42 of the Penal Code.

 

Law on Criminal Procedures 2007

Cambodian courts are entitled to request witness testimony through article 38 and 86 of the Law on Criminal Procedure.

 

International Legal Instruments that apply in Cambodia

International Convention for the Suppression of the Financing of Terrorism (1999)

The Royal Government of Cambodia has agreed to cooperate with the international community to fight against international terrorism. Cambodia is a member of the International Police Forces (Interpol) and closely cooperates with other members of the organization to fulfil its obligations, including information sharing.

 

Conventions and decisions of the United Nation’s Security Council related to anti-money laundering and countering financing of terrorism.

As a member of the Asia Pacific Group on Money Laundering, Cambodia agreesto comply with resolutions of the UN regarding anti-money laundering provisions and policies, and to promulgate Cambodian policies and regulations for this purpose.

 

2004 Memorandum of Understanding between the Royal Government of Cambodia and Australian Government Regarding the Cooperation to Fight Against International Terrorism.

 

The ASEAN Treaty on Mutual Assistance in Criminal Matters (2004)

This treaty allows Cambodia to seek assistance from other ASEAN members for criminal investigations and enforcement.

 

ASEAN Convention on Counter Terrorism

Cambodia signed this convention  on 14th June 2010. This convention attempts to boost Southeast Asia’s regional capacity to counter terrorism in all forms and manifestations, as well as to deepen regional collaboration in term of combating against terrorism.

United Nations Convention against Transnational Organized Crime, September 2003

As a member of the Asia Pacific Group on Money Laundering, Cambodia agrees to comply with this convention and to promulgate Cambodian policies and regulations for this purpose.


IN ADDITION TO THESE LAWS, IS THERE ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS CURRENTLY IN PLACE?

The National Strategies on Anti-Money Laundering and Combating the Financing of Terrorism 2013-2017–A national plan for the development of laws and policies to prevent and detect money laundering and financing of terrorism. The plan advances seven “strategies” for achieving anti-money laundering and financing of terrorism goals in Cambodia, which are titled the following:

  • Strategy 1: Functionality of National AML/CFT Coordination Committee (NCC);
  • Strategy 2: Money Laundering and the Financing of Terrorism Threat Assessment (MLTA);
  • Strategy 3: Building Capacity of CAFIU;
  • Strategy 4: Harmonization of Laws and Establishment of Certain Regulatory Procedures;
  • Strategy 5: Strengthening Domestic Cooperation;
  • Strategy 6: Strengthening International Cooperation; and
  • Strategy 7: Raising the AML/CFT Awareness of all Reporting Entities;

 

Additionally, financial institutions and non-financial institutions falling under the supervisory authority of NBC or CAFIU are taking steps to create internal guidance documents for their compliance officers and in-house counsels. As an example in 9th October 2009, ACLEDA, Cambodia’s largest bank, issued a public policy on anti-money laundering and combating the financing of terrorism.


UNDER WHAT CIRCUMSTANCES IS A LAWYER UNDER THE OBLIGATION TO REPORT.

Under articles 4 and 5 of the AML Law, lawyers, notaries, accountants, auditors, investment advisors and asset managers are subject to the reporting requirements of anti-money laundering regulations under the AML Law, when such a professional prepares for or carries out transactions for a client in relation to the following activities:

(a)    Buying and selling real estate, building and land;

(b)       Managing of client money, securities or other assets such as:

                                 i.                        management of banking or securities accounts;

                               ii.                  organisation of contributions for the creation, operation or companies management.

 

(c)     Creation, operation or management of legal persons or arrangements, and buying and selling of business entities;

(d)       Trust or company providing services when they prepare for or carry out transactions for a client concerning the following activities:

                                 i.                        acting as a formation agent of legal persons;

                               ii.                        acting as or arranging for another person to act as a director or

                              iii.                        secretary of a company, a partner of a partnership, or a similar position in

                              iv.                        relation to other legal persons;

                               v.                        providing a registered office; business address or

                              vi.                        accommodation, correspondence or administrative address for a company, a

                            vii.                        partnership or any other legal person or arrangement;

                           viii.                        acting as or arranging for another person to act as a trustee of an

                              ix.                        express trust

                               x.                        acting as or arranging for another person to act as a nominee

                              xi.                        shareholder for another person.

 

Under Article 6 of the AML Law, “banking or professional secrecy shall not inhibit the implementation of the present Law and may not be invoked as a ground for refusal to provide information to the CAFlU or other supervisory authority, whether for domestic or for international cooperation purposes, or as required in connection with an investigation which relates to money laundering or financing of terrorism ordered by or carried out under the supervision of a judicial authority.”


LAWYER RESPONSIBILITY/LIABILITY

Responsibility

 

Under the AML Law, a lawyer is responsible for reporting suspicious transactions to CAFIU where he or she is engaged in activities listed in Article 5 of the AML Law and above. He or she cannot use professional secrecy to avoid the reporting requirements under the AML Law.

The relevant reporting requirement is in article 12 of the AML Law: Reporting Cash or Suspicious Transactions to the NBC.

(a)    Reporting entities referred to in Article 4 of the AML Law shall report to the CAFIU any cash transaction exceeding the amount of the threshold as defined by the CAFIU, as well as such transactions, which involve several connected cash transactions whose total value exceeds the same amount. The transaction amount threshold, pursuant to article 28.3 of the Prakas on Anti-Money Laundering and Combating the Financing of Terrorism, is USD 10,000.

(b)    In addition to the reporting obligation set forth by paragraph 1 of this Article, if a reporting entity suspects or has reasonable grounds to suspect that funds are the proceeds of offense, or are related to the financing of terrorism, it shall promptly, within 24 hours, report its suspicions to CAFIU.

(c)    Reports of suspicious shall be transmitted to CAFIU by any expeditious means, such as facsimile or, failing that, by any other written means. Reports communicated by telephone shall be confirmed by facsimile or any other written means within the shortest possible time. CAFIU shall acknowledge receipt of the report upon receipt thereof.

(d)    A reporting entity that has made a report to CAFIU, as well as any other entity that holds information related to the transaction or client involved in the report, shall give CAFIU or a law enforcement agency that is carrying out an investigation arising from, or relating to the information contained in the report, any further information that it has about the transaction or attempted transaction or the parties to the transaction if requested to do so by CAFIU or the law enforcement agency.

(e)    If CAFIU has reasonable grounds to suspect that a transaction or a proposed transaction may involve a money laundering offense or an offense of financing of terrorism, and due to the seriousness of the crime or the urgency of resolving the investigation, it may direct the reporting entity not to proceed to carry out a transaction or proposed transaction or any other transaction in respect of the funds affected by that transaction or proposed transaction for a period as may be determined by the NBC, which may not exceed 48 hours, in order to allow CAFIU:

• to make necessary inquiries concerning the transaction; and

•if CAFIU deems it appropriate, to inform and advise a law enforcement agency.

 

Liability

Law on Drug Control

Section 5: Laundering of money generated from illicit trafficking of drugs

Article 39 of the Law on Drug Control states: any person shall be punished 10 to 20 years imprisonment and with a fine penalty of 10,000,000 Riels to 50,000,000 Riels or either one of the two penalties, for:

  • Intentionally transferring resources or properties acquired through the commission of [a drug offense under the Law on Drug Control], for the purpose of concealing or diverting the unlawful source of such resources or properties or in order to help the offender to get away from punishments as a result of his/her own act.
  • assisting to conceal or divert the unlawful source, place, management, movement or real ownership over the resources, properties or rights related to the resources and properties obtained from any offenses [stated in the Law on Drug Control].

Section 6 of the Law on Drug Control: Purchasing, storing or consuming, with knowledge of the consequences of resources and properties which are generated from offenses.

Article 40 of the Law on Drug Control: Shall be subject to imprisonment from one (1) to five (5) years and/or a fine penalty of from 5,000,000 (five million) to 10,000,000 (ten million) Riels, for purchasing, storing or consuming, in whatever form, the property where he/she has knowledge that it was obtained from the commission, directly or indirectly, of the offenses of the articles from 31 to 39 of this [the Law on Drug Control]. 

 

AMLLaw

Article 28 of the AML Law - Disciplinary Sanctions

The Supervisory Authorities shall cooperate with the CAFlU to impose disciplinary sanctions to any reporting entity, which is not in compliance with the provisions of Articles 7 through 12 and Article 16

A violation mentioned in above shall be subject to the following sanctions:

  • warning;
  • reprimand;
  • the prohibition or limitation to conduct any transactions for a period of time as   indicated by the supervisory authorities;
  • revocation of the business license;
  • proposal to demote the relevant officials or directors of the reporting entities;
  • fine;
  • order to a temporary freezing on means and proceeds of money laundering and financing of terrorism;
  • a complaint to the court where there is serious violation of the provisions of the AML Law or other relevant regulations that damages the public interest or national security.

Article 29 of the AML Law - Penal Sanctions

Without taking into consideration of any offenses in the penal provisions of other law:

  • Any person who denies providing information to the CAFlU and the supervisory authorities as contrary to the provisions of Article 6 of the AML law will be sentenced to imprisonment from six days to one month and/or be subject to a fine from 100,000 Riels up to 1,000,000 Riels;
  • Any person who neglects to provide report on cash and suspicious transactions to the CAFlU as contrary to the provisions of Article 12 of the AML Law will be sentenced to imprisonment from one month to one year and/or be subject to a fine from 1,000,000 Riels up to 5,000,000 Riels.
  • Any person who submits a report on cash and suspicious transactions to the CAFlU which fails to include the necessary information set forth in Article 15 of the AML Law, or who violates the prohibition of “tipping off”, will be sentenced to imprisonment from one month to one year and/or be subject to a fine from 1,000,000 Riels up to 5,000,000 Riels.
  • Any person who violates the obligations to keep professional secrecy as contrary to Article 23 of the present Law will be sentenced to imprisonment from one month to one year and/or will be subject to a fine from 1,000,000 Riels up to 5,000,000 Riels.

Article 30 of the AML Law - Freezing and confiscation of property

With regard to a violation of money laundering or financing terrorism as stipulated in the existing Penal Code, all relating or suspicious to be related property may be frozen while there is a court or other proceeding pending. Where a court has decided to penalize a person or institution for money laundering or financing terrorism, the relevant property shall be confiscated and become state property.


CLIENTS IDENTIFICATION AND VERIFICATION

Under Article 20 of the Law on Drug Control, any natural person or legal entity, authorisedto perform a business of manual exchange of currencies, shall:

1ask for the identity of its clients, by asking them to prove a still valid document with photos, before accepting to exchange them any money with amount exceeding that specified by the competent institution.

2record all the operations in chronological order by indication of the first names, surnames and addresses of the clients in a serial books and with initial signature by the NBC, which shall be kept on file for at least five years after the last recorded operations.

 

The NBC may designate an officer to go down to inspect these books on site.

AMLLAW

Article 8 of the AML Law- Client Due Diligence Measures

1. Reporting entities referred in Article 4 (discussed above) of the AML Law shall take client due diligence measures, including the identification of their clients and the verification of their clients' identity:

(a)      prior to establishing business relations, such as opening accounts, taking stocks, bonds or other securities into safe custody, granting safe-deposit facilities or engaging in any other business dealings;

(b)      prior to carrying out occasional or one-off transactions, including wire-transfers, that involve a sum in excess of the amount as defined by the supervisory authority. Identification information accompanying wire transfers, shall contain the name and address of the originator, where an account exists, and the number of that account. In the absence of an account, a unique reference number shall be included;

(c)      if the reporting entity has a suspicion of money laundering or financing of terrorism irrespective of the sum involved in the transaction;

(d)      if the reporting entity has any doubts about the veracity or adequacy of previously obtained client identification data.

 

2. The following client due diligence measures shall be taken by reporting entities:

(a)     identifying the client by obtaining a minimum of name, date of birth, and address, for natural persons and name, articles of incorporation or registration, tax identification number, address, telephone number, for legal persons as defined by the supervisory authority and verifying that client's identity by using reliable, independent source documents, data or information such as a national ID card, a passport or any other official photo ID document;

(b)     identifying the ultimate beneficial owner, and taking reasonable measures to verify the identity of the beneficial owner such that the financial institution is satisfied that it knows who the beneficial owner is. For legal persons and arrangements, the reporting entities should take reasonable measures to understand the ownership and control structure of the client;

(c)     obtaining information on the purpose and intended nature of the business relationship; and

(d)     conducting ongoing due diligence on the business relationship and scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the reporting entities, knowledge of the client, their business and risk profile including, where necessary, the source of funds.

3. Where the reporting entity is unable to comply with paragraphs 2 (a) to (c) above, it should not open the account, commence business relations or perform the transaction, or in case of existing business relations with the client, it should terminate such business relations, unless instructed to the contrary by the CAFlU. In any such cases, the reporting entity should consider making a suspicious transaction report in relation to the client.

4. The requirements set forth by this article shall apply to all new clients as well as to existing clients on the basis of materiality and risk. Reporting entities shall conduct due diligence on such existing relationships retrospectively.

Article 9 of the AML Law- Identification of Clients Carrying Out Transactions below the Threshold

Reporting entities shall identify their clients where separate operations which are repeated involve a total amount which is less than that the threshold specified by the supervisory authority, but where the reporting entity has reasons to believe that those transactions are aiming at avoiding identification.

Article 10 of the AML Law- Special Monitoring of Certain Transactions

1. A reporting entity shall pay special attention to:

(a)     any complex, unusual or large amount transactions;

(b)     any unusual patterns of transactions; that have no apparent or visible economic or lawful purpose;

(c)     business relations and transactions with institutions or persons in jurisdictions that do not have adequate systems in place to prevent or deter money laundering or financing of terrorism;

(d)     wire transfers that do not contain complete originator information;

(e)     business relations and transactions with persons with whom the reporting entity has had no face-to-face contact during the implementation of identification procedure;

(f)     business relations and transactions with politically exposed persons; and

(g)     business relations and transactions conducted by means of cross-border correspondent banking or other similar relationships.

2. In cases referred to under paragraph 1 of this article, the reporting entity shall seek additional information as to the origin and destination of the money, the purpose of the transaction and the identity of the transacting parties.

There are no regulations or guidelines for lawyers regarding the method of client identification and verification.

Prakas on Anti-Money Laundering and the Combating of Financing of Terrorism

According to Article 3 of the Prakas on Anti-Money Laundering and the Combating of Financing of Terrorism, reporting entities are recommended to develop a risk profile for each of its clients. In creating the risk profile of a type of client or an individual client, banks and financial institutions should at least take into consideration the following factors:

·         the origin of the client and location of business;

·         background and personal particulars of the client;

·         nature of the client's business;

·         structure of ownership for a corporate client; and

·         any other information indicating the client is of higher risk.

Following the acceptance of the client, banks and financial institutions should continuously monitor the client's account activity pattern to ensure it is in line with the client profile. Unjustified and unreasonable differences should cause banks and financial institutions to reassess the client as higher risk.


LAWYERS PROSECUTED FOR MONEY LAUNDERING OFFENCES

No information available. 


HAS THE FINANCIAL ACTION TASK FORCE (FATF) OR RELEVANT SUB REGIONAL ORGANISATION CONDUCTED A MUTUAL EVALUATION OF THIS COUNTRY, AND, IF SO, WHAT WERE THE FINDINGS CONCERNING LAWYERS’ COMPLIANCE WITH THE FATF 40+9 RECOMMENDATIONS?

The last Mutual Evaluation conducted by the Financial Action Task Force (FATF) relating to the implementation of anti-money laundering and counter-terrorism financing standards in Cambodia was conducted in 2014. According to that Evaluation, Cambodia was deemed Compliant for 0 and Largely Compliant for 0 of the FATF 40 + 9 Recommendations. It was Partially Compliant or Non-Compliant for all 6 Core Recommendations.

Key Findings

This AR finds that Cambodia has made substantial and commendable progress since the 2013 Annual Meeting. Cambodia’s AML/CFT law was enacted in 2014 and the Sub-Decree on the Freezing of Property of Designated Terrorists and Organizations was enacted by the Prime Minister in March 2014. This important legislative progress, as well as demonstrated increased effectiveness in a number of areas (including suspicious transaction reporting and counter terrorism measures), has led the review team to conclude that R.1, R.3, R.13, R35, SR. 1, SR. III and SR.IV can now be considered to be at a level essentially equivalent to LC. However, significant deficiencies remain in relation to six core/key Recommendations rated NC/PC in the MER.

In February 2015, FATF released the following statement regarding Cambodia:

“The FATF welcomes Cambodia’s significant progress in improving its AML/CFT regime and notes that Cambodia has established the legal and regulatory framework to meet its commitments in its action plan regarding the strategic deficiencies that the FATF had identified in June 2011. Cambodia is therefore no longer subject to the FATF’s monitoring process under its on-going global AML/CFT compliance process. Cambodia will work with APG as it continues to address the full range of AML/CFT issues identified in its mutual evaluation report.”

Cambodia is not a member of FATF, but Cambodia is a member of Asia/Pacific Group on Money Laundering (APG). In March 2007, the assessment was conducted by a team of assessors from the World Bank and APG regarding CAFIU. This assessment report was updated in 2014.  The report is available here.


Information supplied by:
 

Eric Arbizo
Legal Advisor
Mobile: +855 (12) 457433 | Phone: +855 (23) 210225 | Fax: +855 (23) 213089
Address: No. 24, Street 462, Sangkat Tonle Bassac, Phnom Penh, Cambodia
Email: eric.arbizo@sa-asia.com | Website: www.sa-asia.com
 

SOURCES:

For the purpose of filling the above template, the following laws were taken to be reviewed:

 

[1]The banking and financial institutions operated commercial transactions in 1. credit operations for valuable consideration, including leasing, guarantees and commitments under signature; 2. the collection of non-earmarked deposits from the public; 3. the provision of means of payment to clients and the processing of said means of payment in national currency or foreign exchange. According to Article 11 of the Law on Banking and Financial Institutions, “a covered entity shall be incorporated either as a public company under commercial law or as a cooperative or a mutual noncommercial society subject to special statute.”