Cambodia

Last updated: 27/03/2011


CENTRAL AUTHORITY FOR REPORTING

In compliant to Chapter IV of the Law on Anti-Money Laundering and Combating the Financing of Terrorism, adopted by the National Assembly on April 30, 2007, the Cambodian Financial Intelligence Unit (CAFIU) was established on January 29, 2008 with the secretariat located in the National Bank of Cambodia (NBC). Article 2 of the Prakas dated September 16, 2009, on Structure, Functions and Duties of the Cambodian Financial Intelligence Unit confers the following major functions and duties of CAFIU:

  1. To receive suspicious and cash transaction reports and information suspected of money laundering or terrorism financing;
  2. 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;
  3. 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, including information collected and maintained by, or stored in the databases of, any public entities;
  4. To analyze 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;
  5. To compile statistics and records on suspicious and cash transaction reports received, analyzed and forwarded to the law enforcement authorities and disseminate information to other public agencies on related matters as required;
  6. 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;
  7. To ensure that personal information under its control is protected from unauthorized disclosure; and
  8. To enhance public awareness and understanding of matters related to money laundering and terrorism financing.

The Prakas also set out the bureaucratic structure of CAFIU. This bureaucratic structure includes the creation of 1. Legal administration and information technology division; 2. Transaction report analysis division; 3. Compliance monitoring division; and 4. Cooperation division. These four divisions are vested with different functions and duties. The four divisions are to ensure that CAFIU is capable of functioning its duties in according to Article 2 of the Prakas dated September 16, 2009, on Structure, Functions and Duties of the Cambodian Financial Intelligence Unit. All these four divisions have equal ranks to the like divisions within NBC.

Non-bank financial institutions, including securities brokerage firms and insurance companies; investment and personal funds, investment companies and companies for managing investment funds; real estate agents, buildings and land; 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 institution or profession which are designated by CAFIU to fall within the scope of the Law on Anti-Money Laundering and Combating the Financing of Terrorism and is not supervised by NBC, they shall be under the supervision of CAFIU and shall be obliged to report money-laundering-related issues to CAFIU.

The NBC is sitting as the chairman of CAFIU’s Board of Directors, with the Council of Ministers, Ministry of Economics and Finance, Ministry of Interior, and Ministry of Justice as members.


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

In addition to the specialized function of CAFIU, the Central Bank, also known as the National Bank of Cambodian (NBC), is also vested with the supervisory authority for anti-money laundering issues.

According to the Law on the Organization and Functioning of the National Bank of Cambodia, adopted on January 26, 1996, the National Bank of Cambodia referred to as the “Central Bank” has the authority to take appropriate measures to identify precisely all its clients and, the transactions carried out through them above a certain threshold to be defined by the Central Bank. The Central Bank must keep all relevant documentation gathered for at least ten years.

Article 40: 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 Central Bank shall:

  1. Issue licenses and define the licensing process;
     
  2. 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;
     
  3. Be empowered to issue regulations for the implementation of this law which authorise the Central Bank to determine, in particular the amount of minimum capital and the nature of the assets it is backed with,
     
  4. Prudential ratios regarding particularly liquidity, solvency, risk diversification, foreign exchange exposure, and market risk exposure;
     
  5. Valuation rules for accounting balances;
     
  6. Conditions under which participations can be taken and held in the capital of a covered entity or a financial institution;
     
  7. Conditions under which participations can be taken and held in the capital of other banking or financial companies;
     
  8. Debts which must be regarded as doubtful, and the provisioning thereof;
     
  9. The chart of accounts, the related accounting standards, the rules for the consolidation of accounts, and the rules of the disclosure of accounting statements;
     
  10. Conditions applicable to the banking and financial operations that may be carried out in their relations with clients;
     
  11. Organization of interbank joint services, including the centralization of financial information, risks, and overdue debts;
     
  12. Granting of individual, exceptional, and temporary exemptions;
     
  13. Requirements and authorization 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;
     
  14. Practice of door-to-door selling of banking or financial services;
     
  15. After consultation with the covered entities’ professional association, the rules governing the operation of a deposit guarantee system; and
     
  16. Generally speaking, 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.

The Central Bank:

  1. Publishes all regulations issued by virtue of its authority in the Official Gazette of the Kingdom of Cambodia and in the Bulletin of National Bank of Cambodia;
  2. It supervises 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;
  3. It organises or supervises any interbank settlement system;
  4. It may require that covered entities, public offices, auditors, and any other individual or legal entity disclose information considered as useful for its mission;and
  5. It may, in accordance with the conditions defined in Articles 52 to 54 of this law, take disciplinary action.

Article 41. The supervisory authority’s duty consists:

  1. In licensing covered entities to carry out financial and banking operations in Cambodia;
  2. In defining and enforcing prudential rules related to the financial structure and management that covered entities must abide by;
  3. In supervising, permanently but after the fact, through both off-site and on-site examinations, the financial position and functioning of covered entities;
  4. In imposing disciplinary sanctions against covered entities failing to comply with law and regulations;
  5. In referring to the courts if failure to observe laws and regulations undermines the public interest.

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 supervisory authority may impose one of the following disciplinary sanctions:

  • Caution;
  • Reprimand;
  • Prohibition on the execution of certain operations and any other limitations on the carrying on of business;
  • Temporary suspension of one or more of the executives, with or without appointment of a provisional administrator;
  • Compulsory resignation of one or more of the executives, with or without appointment of a provisional administrator;
  • Setting up a provisional administration;
  • 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 [2].


ARE LAWYERS COVERED BY ANTI-MONEY LAUNDERING LEGISLATION?

According to the Law on Anti-Money Laundering and Combating the Financing of Terrorism 2007:

Yes under Chapter II, Article 4 of the Law on Anti-Money Laundering and the Combating of Financing of Terrorism 2007, the following institutions and professions are covered:

  1. Banks, including branches of foreign banks;
  2. Non-bank financial institutions, including securities brokerage firms and insurance companies micro finance institutions;
  3. Micro finance institutions;
  4. Credit cooperatives;
  5. Easing companies, investment and pension funds, investment companies and companies for managing investment funds;
  6. Exchange offices;
  7. Money remittance services;
  8. Real estate agents, building and land;
  9. Dealers in precious metals, stones and gems;
  10. Post office operating payment transactions;
  11. 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 present Law;
  12. Casinos and other gambling institutions;
  13. Non-governmental organizations and foundations engage in business activities and fund raising;
  14. Any other institutions or professions that are designated by the CAFlU to fall within the scope of the present Law.

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 Regulate 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.


NAME THE LAWS REGARDING ANTI-MONEY LAUNDERING PROCEDURES

Cambodia has very few pieces of legislation in place to combat money laundering and financing of terrorism, as the issue is a very recent phenomenon in Cambodia.

Legislation

  • Law on Anti-Money Laundering and the Combating the Financing of Terrorism 2007 – provides for the definition of money laundering; prevention and control measures against money laundering and financing of terrorism as well as the organization and the control of those measures enforcement; institutions and professions responsible for reporting the cases to the Central Bank; the establishment of Central Bank, its structure and functions; and the penal sanctions;
     
  • Prakas on Anti-Money Laundering and the Combating the Financing of Terrorism – designed and issued by the Central Bank to give detailed instruction to the institutions and professions covered by the Law on Anti-Money Laundering and the Combating the Financing of Terrorism about client acceptance policy; risk profiling; prohibition of anonymous account and accounts in fictitious names; client due diligence; relationships with individual, corporate and non-profit institution clients; other correspondence banks; and other like banking and financial market operations;
     
  • 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 Regulate by the National Bank of Cambodia – provides for definition of “reporting entity” which shall be obliged to report the suspicious actions to CAFIU.
  • Law on Drug Control 1996 - stipulated drug classification; the prohibition of drug cultivation, production, use, distribution and trading/trafficking; the medical, scientific and educational research on drug; inspection and record-taking of drug; and the pental sanctions. Chapter VI of this law states about the prevention and detection of the laundering of money generated from clandestine illicit trafficking of drug; obligation of making a declaration on the international transfer of valuables; regulations regarding business of manual exchange of currencies; obligations required for casinos; obligations of taking precaution by the financial organizations. Article 25 of this law, states about establishment of 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 - adopted by the National Assembly on October 19, 1999;
     
  • Law on Anti-Corruption 2010 - whose purpose is to combat all forms, all natures and all levels of corrupt practices in the Kingdom of Cambodia, through measures to educate, prevent, and combat corruption, together with public participation and international cooperation. Article 32 of this law imposes criminal sanction on money-laundering offender and shall be penalized in accordance to Article 404 of the current Cambodian Penal Code.
  • 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. The act of lending support to further its operational transaction for investing, concealing or converting the direct or indirect benefits of a felony or a misdemeanor is also considered as money laundering. Under Article 408, money laundering offender shall be sanctioned to an imprisonment from two to five years, and a monetary fine from four million Riels up to the funds, assets and properties which were the subject of money laundering.

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

The Cambodian court is entitled to produce request for witness testimony through article 38 and 86 of the Law on Criminal Procedure.

  • Law on Criminal Procedures 2007

 

International Legal Instrument

  • International Convention for the Suppression of the Financing of Terrorism 1999 (signed and in the process of ratification).

The Royal Government of Cambodia extends its full cooperation to the international community to fight against international terrorism by whatever means at its disposal. In this regard, it provides flyover and landing facilities to U.S. Aircrafts in mission to fights international terrorism in the region.

Cambodia is a member of the International Police Forces (Interpol) and closely cooperates with other members of this Organization to abide by its obligation, including the information sharing.

Cambodia is ready to cooperate further with the International community by all lawful means to fulfill its international obligation in the fight against terrorism and for the purpose of suppression of terrorist network.

  • International Convention for the Suppression of the Financing of Terrorism 1999(signed and in the process of ratification)

The Royal Government of Cambodia extends its full cooperation to the international community to fight against international terrorism by whatever means at its disposal. In this regard, it provides flyover and landing facilities to U.S. Aircrafts in mission to fights international terrorism in the region.

Cambodia is a member of the International Police Forces (Interpol) and closely cooperates with other members of this Organization to abide by its obligation, including the information sharing.

Cambodia is ready to cooperate further with the International community by all lawful means to fulfil its international obligation in the fight against terrorism and for the purpose of suppression of terrorist network.

  • 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 is obliged to comply with various decisions and resolutions of the United Nations related to money laundering and the combating the financing of terrorism.

  • 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, November 2004

This treaty allows Cambodia to seek assistance from  other ASEAN members for criminal investigation, prosecutions and resulting proceedings.

  • ASEAN Convention on Counter Terrorism

Cambodia signed this convention June 14, 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 obliges to comply with this convention, and its internal counter-terrorism regulations must also comply with this convention. 


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

The Bar Association of the Kingdom of Cambodia has not issued any official guidance for lawyers regarding anti-money laundering. However, financial institutions and non-financial institutions falling under the supervisory authority of NBC or CAFIU are taking step in creating the internal guidance for their compliant officers, lawyers or in-house counsels. As an example in October 9, 2009, ACLEDA bank issued a public policy on anti-money laundering and combating the financing of terrorism. On November 2001, Kookmin Bank established its internal anti-money laundering and enhanced its policy to adjust to Korea’s anti-money laundering law which was lastly amended on December 2007.


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

Under Article 6 of the Law on Anti-Money Laundering and the Combating of Financing of Terrorism “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 FlU and 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 ajudicial authority.”

However, provision of Article 23 of the Law on Drug Control seems to contravene the above provision: “the lawyers shall only report of those operations which they had known of, apart from their function of defence.”

The suspicious transaction reports submitted to the Central Bank shall at a minimum contain:

  1. the identity and identifying particulars of the reporting entity, including the name and contact details of the reporting officer;
  2. the identity and identifying particulars of the client and of the beneficiary involved in the transaction;  
  3. the type and details such as amount, currency, date, parties involved of the transaction that is reported as suspicious, including the account number and particulars of the account holder; and
  4. a short description of the circumstances and reasons that justify the suspicion.

LAWYER RESPONSIBILITY/LIABILITY

Responsibility

With reference to the Law on Anti-Money Laundering and the Combating of the Financing of Terrorism, a lawyer is responsible for reporting money laundering case to the Central Bank, and he/she cannot not use his/her professional secrecy to inhibit the implementation of Law on Anti-Money Laundering and the Combating of the Financing of Terrorism i.e. a lawyer cannot use his/her professional secrecy obligations as a defence for not reporting a suspected money laundering or terrorist financing transactions.

However, the above provision seems to contradict Article 23 of the Law on Drug Control, adopted by the National Assembly on December 09, 1996, which states “The lawyers shall only report of those operations which they had known of, apart from their function of defence”.

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

Article 12.- Reporting Cash or Suspicious Transactions to the Central Bank 

  1. Reporting entities referred to at Article 4 of the present Law shall report to the Central Bank any cash transaction exceeding the amount of the threshold as defined by the supervisory authority, as well as such transactions, which involve several connected cash transactions whose total value exceeds the same amount;
     
  2. Irrespective of 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 the Central Bank;
     
  3. Reports of suspicious shall be transmitted to the Central Bank by any expeditious means of communication, such as facsimile or, failing which, by any other written means. Reports communicated by telephone shall be confirmed by facsimile or any other written means within the shortest possible time. The Central Bank shall acknowledge receipt of the report upon receipt thereof;
     
  4. A reporting entity that has made a report to the Central Bank, as well as any other entity that holds information related to the transaction or client involved in the report, shall give the Central Bank 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 the Central Bank or the law enforcement agency;
     
  5. If the Central Bank 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 for reasons of the seriousness or the urgency of the case it considers necessary, it may direct the reporting entity in writing or by telephone to be followed up in writing, not to proceed with the carrying out of that 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 Central Bank, which may not exceed 48 hours, in order to allow the Central Bank:
     
    • To make necessary inquiries concerning the transaction; and
    • If the Central Bank 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: 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:

  1. Any person who intentionally transferred resources or properties acquired through the commission of offenses as stipulated in articles 31 through 38 of this Law, for the purpose of concealing or diverting the illegal original 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;
  2. Any person who helps concealing or diverting the original 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 sub-paragraph 1 above.

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

Article 40: Shall be subject to imprisonment from one (1) to five (5) years and a fine penalty of from 5,000,000 (five million) to 10,000,000 (ten million) riels or, to either one of the two punishment terms, for any person who purchases, stores or consumes in whatever form, of the properties and resources which he/she had knowledge that they are obtained from the commission even directly or indirectly, of the offenses of the articles from 31 to 39 of this law.

Article 69 of the Law on the Organization and Functioning of the National Bank of Cambodia, “Any person who fails to supply any information called for by the Central Bank under this article or who knowingly supplies any false or misleading information shall be guilty of an offense and liable for a fine from 1,000,000.00 (one million riels) to 10,000,000.00 (ten million riels) and/or imprisonment from 1 to 5 years.”

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

 Article 28.- Disciplinary Sanctions

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

Violation as mentioned in above paragraph shall be subject to the following sanctions:

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

Article 29.- Penal Sanctions

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

  • Any person who denies providing information to the FlU and the supervisory authorities as contrary to the provisions of Article 6 of the present Law will be sentenced to imprisonment from six days to one month and subject to a fine from 100,000 Riels up to 1,000,000 Riels or anyone thereof;
     
  • Any person who neglects to provide report on cash and suspicious transactions to the FlU as contrary to the provisions of Article 12 of the present Law will be sentenced to imprisonment from one month to one year, and will be subject to afine from 1,000,000 Riels up to 5,000,000 Riels or anyone thereof;
     
  • Any person required to disclose the information and submit reports referred to in Article 13, or any other individual having knowledge thereof, communicate such information or reports as the contrary to the provisions of prohibition of tipping off in Article 15 of the present Law will be sentenced to imprisonment from one month to one year, and will be subject to a fine from 1,000,000 Riels up to 5,000,000 Riels or anyone thereof;
     
  • 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 will be subject to a fine from 1,000,000 Riels up to 5,000,000 Riels or anyone thereof.

Article 30.- Freezing and confiscation of property

In case of a proceeding on the 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 or restrained from transferring until the court decision becomes definitive.

In case where the court has decided to penalize the offence of money laundering or financing terrorism, the property shall be confiscated as state property.


CLIENTS IDENTIFICATION AND VERIFICATION

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

  1. ask for the identity of its clients, by asking them to prove a still valid document with photos, before accepting to exchange them any money which amount exceeding what specified by the competent institution;
  2. record all the operations in chronological order by indicating of the first names, surnames and addresses of the clients in a serial books and with initial signature by the Central Bank, which shall be kept file for at least five years after the last recorded operations.

The Central Bank may designate its officer go down to inspect those books on site.

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

Article 8.- Client Due Diligence Measures.

  1. Reporting entities referred in Article 4 of the present Law shall take client due diligence measures, including the identification of their clients andthe verification of their clients' identity:

    • 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;
    • Prior to carrying out occasional or one-off transactions, including wire-transfers, that involve a sum in excess of amount as defined by the supervisory authority; identification information accompanying wire transfers shall contain the name and address of the originator, and where an account exists, the number of that account. In the absence of an account, a unique reference number shall be included;
    • If the reporting entity has a suspicion of money laundering or financing of terrorism irrespective of the sum involved in the transaction;
    • 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:

    • Identifying the client by obtaining at the minimum name, birth date, 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 using reliable, independent source documents, data or information by using a national ID card, a passport or any other official photo ID document.
    • 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.
    • Obtaining information on the purpose and intended nature of the business relationship.
    • 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 FlU. 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.- Identification of Clients Carrying Out Transactions below the Threshold
 

Identification shall also be carried out in cases where separate operations repeated involve an individual amount, which is less than that the threshold specified by the supervisory authority but the reporting entity has reasons to believe that those transactions are aiming at avoiding identification.
 

Article 10.- Special Monitoring of Certain Transactions

  1. A reporting entity shall pay special attention to:

    • Any complex, unusual or large amount transactions;
    • Any unusual patterns of transactions; that have no apparent or visible economic or lawful purpose;
    • 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;
    • Wire transfers that do not contain complete originator information;
    • Business relations and transactions with persons with whom the reporting entity has had no face-to-face contact during the implementation of identification procedure;
    • Business relations and transactions with politically exposed persons;
    • 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 way they need to proceed for 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 risk profile. 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 initial 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.

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

Article 29.- Penal Sanctions

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

  • Any person who denies providing information to the FlU and the supervisory authorities as contrary to the provisions of Article 6 of the present Law will be sentenced to imprisonment from six days to one month and subject to a fine from 100,000 Riels up to 1,000,000 Riels or anyone thereof;
  • Any person who neglects to provide report on cash and suspicious transactions to the FlU as contrary to the provisions of Article 12 of the present Law will be sentenced to imprisonment from one month to one year, and will be subject to a fine from 1,000,000 Riels up to 5,000,000 Riels or anyone thereof;
  • Any person required to disclose the information and submit reports referred to in Article 13, or any other individual having knowledge thereof, communicate such information or reports as the contrary to the provisions of prohibition of tipping off in Article 15 of the present Law will be sentenced to imprisonment from one month to one year, and will be subject to a fine from 1,000,000 Riels up to 5,000,000 Riels or anyone thereof;
  • 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 will be subject to a fine from 1,000,000 Riels up to 5,000,000 Riels or anyone thereof; and

Article 30.- Freezing and confiscation of property

In case of a proceeding on the 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 or restrained from transferring until the court decision becomes definitive.

In case where the court has decided to penalize the offence of money laundering or financing terrorism, the property shall be confiscated as state property.


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?

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 drastically contributed to the establishment of CAFIU.

The evaluation team consisted of Cédric Mousset (financial expert and team leader), Emile van der Does de Willebois (legal expert) and Andrew Clayton (law enforcement expert). Mr. Lindsay Chan from the APG Secretariat participated as an observer during the assessment visit. The assessors reviewed the institutional framework, the relevant AML/CFT laws, regulations, guidelines and other requirements, and the regulatory and other systems in place to deter and punish money laundering and the financing of terrorism through financial institutions and Designated Non-Financial Businesses and Professions. The assessors also examined the capacity, implementation, and effectiveness of all these systems.

This assessment report was finally updated in 2006. The report is available here.


Information supplied by:

Mr Lay Vicheka LL.M, LL.M, LL.B

Legal Consultant

VDB Loi

Email: vicheka.lay@vdb-loi.com

www.vdb-loi.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.”