Cambodia

1. Does Cambodia have legislation making it a criminal offence to engage in money laundering and/or terrorist financing?

Yes, Cambodia has implemented the Law on Anti-Money Laundering and Combating the Financing of Terrorism (“AMLCTF”) dated 27 June 2020, where money laundering and/or terrorist financing are considered as criminal offences.

2. To whom does the legislation apply?

The AMLCTF and other relevant regulations including Sub-Decrees, Prakas and Guidelines with respect to anti-money laundering and combating the financing of terrorism are applicable to reporting entities (“Reporting Entities”) as defined under Article 4 of the AMLCTF and which includes banks (including branches of foreign banks);

• non-bank financial institutions (including securities brokerage firms and insurance companies);
• micro finance institutions;
• credit cooperatives;
• leasing companies, investment and pension funds, investment companies and companies for managing investment funds;
• exchange offices;
• remittance services;
• trust;
• agents, companies and developers of immovable property, building and land;
• dealers in precious metals, stones and gems;
• post office operating payment transactions;
• 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 AMLCTF;
• casinos and other gambling institutions;
• non-governmental organisations and foundations engaging in business activities and fund raising; and
• other persons or professions that are designated by the Cambodia Financial Intelligence Unit (“CAFIU”) to be governed under the scope of the AMLCTF.

3. What does the legislation prohibit?

The AMLCTF and other relevant regulations prohibit Reporting Entities from becoming involved with money laundering and the financing of terrorism offences, maintaining or having transactions with anonymous accounts or similar financial products, disclosing relevant information and reporting to other persons, and transactions with customers without conducting customer due diligence.

4. How is money laundering defined? Does underlying criminal activity have to be proven?

Under Article 3(1) of the AMLCTF, money laundering is defined as:

• the conversion or transfer of property, knowing that such property is the proceeds of an offence, for the purpose of concealing or falsely justifying the illicit origin of the property or of assisting a person involved in the commission of an offence to evade the legal consequences of his or her action;
• the concealment or false justification of the true nature, source, location, disposition, movement or ownership of or rights with respect to property, knowing that such property is the proceeds of an offence;
• the acquisition, possession or use of property, knowing that such property is the proceeds of an offence; or
• any form of participation in, and attempts to commit, aiding and forcing somebody to commit, any of the acts defined in accordance with Article 3(1) of the AMLCTF.

When the CAFIU has reasonable grounds to believe that a money laundering offence has been committed, the case will be referred to the relevant law enforcement authorities for further investigation.

5. What level of intent or knowledge is required to establish a violation?

The level of intent or knowledge is not expressly prescribed under the AMLCTF and relevant regulations. However, Reporting Entities will be considered as infringing the AMLCTF if the they:

• are involved with money laundering and financing of terrorism offences;
• are not cooperating in providing information;
• are negligent of providing transaction reports;
• violate disclosure of information and tipping off; and
• violate the obligation to keep professional secrecy.

6. What are the potential penalties for infringing the legislation?

The sanctions under the AMLCTF include disciplinary sanctions and criminal sanctions. The disciplinary sanctions can result in a warning, reprimand, the prohibition or limitation to conduct any transaction for a period of time as indicated by the supervisory authorities, the revocation of a business licence, the demotion of relevant official or directors of the Reporting Entities and fines. Criminal sanctions include monetary fines and imprisonment.

Reporting Entities that do not comply with the AMLCTF and other relevant regulations will be penalised based on the offenses that were involved.

Money laundering offence: Any person who commits money laundering offence may be subject to imprisonment for 2 to 5 years and a fine from KHR 100 million to 500 million (approximately USD 25,000-125,000) or up to the value of the funds or assets which were the subject of the money laundering. The legal entity may be held criminally responsible for offences committed on its behalf by their organs or representatives and subject to fines from KHR 200 million to 1 billion (approximately USD 50,000-250,000) and any one or more additional sanctions as stipulated in Article 43 (Additional Penalties Applicable to Legal Entities) of the AMLCTF. (Article 38 of AMLCTF)

Denial to Provide Information: Any person who intentionally denies to provide information to the CAFIU and the supervisory authorities as contrary to the provision will be sentenced to imprisonment from 6 days to 1 month and subject to a fine from KHR 10 million to 100 million (approximately USD 2,500-25,000). The legal entity may be held criminally responsible for offences committed on their behalf by their organs or representatives and subject to a fine from KHR 50 million to 200 million (approximately USD 12,500 to 50,000) and any one or more additional sanctions as stipulated in Article 43 (Additional Penalties Applicable to Legal Entities) of the AMLCTF. (Article 39 of AMLCTF).

Financing of Terrorism Offence: Any person who involves with financing of terrorism offence will be sentenced to imprisonment from 10 to 20 years. The legal entity shall be subject to a fine from KHR 1 billion up to 2 billion (approximately USD 250,000-500,000) and any one or more additional sanctions as stipulated in Article 43 (Additional Penalties Applicable to Legal Entities) of the AMLCTF (Article 44 of AMLCTF).

Other potential penalties are mentioned in our responses to question 9 below.

7. Does the legislation have extra-territorial reach?

No, the AMLCTF and other relevant regulations with respect to money laundering are only applicable in Cambodia.

8. Are there additional anti-money laundering or counter terrorist financing regulations or obligations, such as registration or reporting obligations, for businesses or individuals that operate in particular sectors or undertake particular activities?

Reporting Entities that engage in business as mentioned in our responses to question 2 above, are required to comply with the obligations under the AMLCTF and other relevant regulations as follows:

Implement consumer due diligence measures: Customer due diligence shall be undertaken when: (i) establishing business relations; (ii) carrying out occasional or one-off transactions that involve an amount in excess of KHR 40 million (approximately USD 10,000) or wire-transfers in excess of KHR 4 million (approximately USD 1,000); (iii) there is a suspicion of money laundering and/or financing of terrorism; and (iv) there are any doubts about the veracity or adequacy of previously obtained customer identification data (Article 8 of AMLCTF).

Record keeping: Any record of customer identification and transactions shall maintain at least for 5 years after the account has been dosed or the business relations with the customers have ended, and shall hold at the disposal of such record to the competent authorities. (Article 11 of AMLCTF).

Reporting obligations: Reporting Entities are required to submit cash transaction reports (“CTRs”) and suspicious transaction reports (“STRs”) to the CAFIU if (i) any cash transaction exceeding KHR 40 million (approximately USD 10,000); and (ii) any of its employees suspects or has reasonable grounds to suspect that the transaction involves proceeds of an offence, money laundering or financing of terrorism or they have any other grounds of suspicion about a customer transaction within 24 hours. (Article 12 of AMLCTF).

Prohibition of tipping off: Unless authorized by the CAFIU, Reporting Entities cannot disclose information or submit reports, or any other individuals having knowledge thereof, communicate such information or reports to any natural or legal persons other than the CAFIU. (Article 15 of AMLCTF).

9. What are the potential penalties for failing to comply with these obligations?

Potential penalties for failing to comply with these obligations are as follows:

Failure to conduct consumer due diligence measures: The AMLCTF does not specify the specific penalties for failing to comply with consumer due diligence measures by Reporting Entities. However, the fines for non-compliance are detailed under the Prakas on Financial Disciplinary Penalties dated 7 February 2020. The fines are varied based on each type of the Reporting Entities.

Violation of the obligations to keep professional secrecy: Any person who fails to keep professional secrecy will be sentenced to imprisonment from 1 month to 1 year and a fine from KHR 50 million to 200 million. The legal entity may be held criminally responsible for offences committed on their behalf by their organs or representatives and subject to a fine from KHR 200 million to 500 million and any one or more additional sanctions as stipulated in Article 43 (Additional Penalties Applicable to Legal Entities) of the AMLCTF. (Article 42 of AMLCTF)

Negligence in providing transaction reports: Any person who fails to provide the CTRs or STRs to the CAFIU will be sentenced to imprisonment from 1 month to 1 year and a fine from KHR 50 million to 200 million. The legal entity may be held criminally responsible for offences committed on their behalf by their representatives and subject to a fine from KHR 200 million to 500 million and any one or more additional sanctions as stipulated in Article 43 (Additional Penalties Applicable to Legal Entities) of the AMLCTF. (Article 40 of AMLCTF)

Violation of disclosure of information and tipping off: Any person required to disclose the information and submit reports, or any other individual having knowledge thereof, intentionally communicate such information or reports as the contrary to the provisions of prohibition of tipping off will be sentenced to imprisonment from one month to one year, and will be subject to a fine from KHR 50 million to 200 million. The legal entity may be held criminally responsible for offences committed on their behalf by their organs or representatives and subject to a fine from KHR 200 million to 500 million and any one or more additional sanctions as stipulated in Article 43 (Additional Penalties Applicable to Legal Entities) of the AMLCTF. (Article 41 of AMLCTF).

10. Who are the relevant enforcement authorities in Cambodia and what are their contact details?

The National Coordination Committee on Anti-Money Laundering and Financing of Terrorism and Combating the Financing of Proliferation of Weapons of Mass Destruction (“NCC”) is the high-level policymaker and coordinator for the implementation of the AMLCTF and the Law on Combating the Financing of Proliferation of Weapon of Mass Destruction dated 27 June 2020. The NCC comprises the ministers of various government ministries, the head of the National Bank of Cambodia (“NBC”) and CAFIU, and a representative of the National Counter-Terrorism Committee.

The CAFIU within the NBC is a secretariat of the NCC, and a competent authority responsible for combating against money laundering and financing of terrorism activities in Cambodia.

Contact details:

Cambodia Financial Intelligence Unit

address: P.O. Box: 67, 22-24 Preah Norodom Blvd., Phnom Penh, Cambodia

T: +855 234 279 33

F: +855 234 279 33

cafiu_report@nbc.org.kh (for submitting reports), cafiu_info@nbc.org.kh (for other communication)

https://www.nbc.org.kh/cafiu/