Cambodia being a member of the Asia/ Pacific Group on Money Laundering, one of the government’s top priority is to combat money laundering and financing terrorism.
The government cooperates with other countries to deter the use of assets or cash from crime or illegal activities.
The increase in violence and terrorism have become a serious global concern in recent years.
According to the International Monetary Fund, money laundering activities total around three to five per cent of the world’s GDP – which means that out of every $20 made, $1 is illegally earned.
Money laundering refers to 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 involving in the commission of an offence to evade the legal consequence of his or her action.
The financing of terrorism refers to the wilful provision or collection of properties, funds or other services with the intention to use those properties, funds or other services wholly or partially to support any activities of a terrorist or terrorist organisation, including but not limited to the financing of travelling, training, planning or participating in or the perpetration of terrorism.
The Law on Anti-Money laundering and Combating the Financing of Terrorism was promulgated under the Royal Kram NoNS/RKM/0620/021 on June 27, 2020.
Its aim is to determine measures to supervise, deter, prevent, suppress and eliminate money laundering and the financing of terrorism in Cambodia.
National and international level cooperation is needed to tackle such unlawful activities.
Close cooperation among ministries, institutions and regulators in sharing information and making referrals of suspicious financial offences is also essential.
The Securities and Exchange Regulator of Cambodia (SERC) is defined as a supervisory authority that supervises all reporting entities in the securities sector, which shall develop regulations and provide instructions and guidelines to implement the Law on Anti-Money laundering and Combating the Financing of Terrorism.
This is done by coordinating with the Cambodian Financial Intelligence Unit (CAFIU) and imposing disciplinary measures or filing cases at court.
Some SERC officials have the legal capacity as judicial police officers to investigate and strengthen law enforcement combatting all crimes committed in the securities sector, including offences related to money laundering.
Reporting entities in the securities sector, such as securities brokers, shall apply customer due diligence measures, monitoring of abnormal transactions, establishing and submitting cases, and report suspicious cash transactions to CAFIU for conducting examinations on predicate offences, flow of properties and taking necessary action according to the laws and regulations in force.
Mr A, who earned $100,000 from selling narcotics, invested $60,000 in real estate and deposited $40,000 to open a stock trading account with a securities broker, AAA.
Mr A planned to sell stocks to pay a terrorist group’s food and transportation bills.
1: The sale of illegal drugs is crime;
2: $100,000 are the proceeds from the offence;
3: Supporting a terrorist group’s food and travel expenses is considered financing terrorism;
4: The securities broker AAA, the reporting entity, shall report the $40,000 cash transaction to the CAFIU.
This is a clear case of money laundering to financing terrorism activity in the securities sector.
• Reference: Law on Anti-Money Laundering and Combating the Financing of Terrorism 2020.
Prepared by Securities and Exchange Regulator of Cambodia, Legal Affairs Department.
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