Ly Yong Phat chairs a meeting of the Cambodia Oknha Association (COA) on May 21. COA
Cambodia’s Ministry of Foreign Affairs and International Cooperation has expressed “deep regret” over what it described as the “unjust” decision by the US Department of the Treasury (USDT) to impose sanctions on business tycoon Ly Yong Phat and several enterprises in the country.
Yong Phat, his conglomerate L.Y.P. Group Co Ltd and four related businesses were sanctioned by the USDT for their alleged involvement in serious human rights abuses, specifically the treatment of trafficked workers subjected to forced labour in online scam centres owned by him.
The ministry stated that the move, which it said was based on unconfirmed reports of forced labour linked to online investment scams, is “politically motivated” and runs counter to the spirit of reinforcing bilateral cooperation and mutual trust, as expressed by US Secretary of Defense Lloyd J. Austin III during his visit to Cambodia in June.
“[Yong Phat's] role in advancing Cambodia's socioeconomic development over the decades is widely recognised. Through L.Y.P. Group, his contributions to infrastructure development, job creation and poverty alleviation have positively impacted the lives of thousands of Cambodian people,” the ministry said.
The USDT’s Office of Foreign Assets Control (OFAC) issued a statement on September 12, naming five companies: L.Y.P. Group, O’Smach Resort, Garden City Hotel, Koh Kong Resort and Phnom Penh Hotel. The sanctions were imposed under the Global Magnitsky Human Rights Accountability Act, issued on December 20, 2017.
“Today’s action underscores our commitment to hold accountable those involved in human trafficking and other abuses, while also disrupting their ability to operate investment fraud schemes that target countless unsuspecting individuals, including Americans,” said acting undersecretary of the treasury for terrorism and financial Intelligence Bradley T. Smith.
Citing the Trafficking in Persons Report, the department stated that victims of scam networks were initially lured into investing in virtual currency, with the ultimate intent of defrauding them of their funds.
It added that once trapped, the individuals were forced to work up to 15 hours a day, and in some cases, were "resold" to other scam operations or subjected to sex trafficking.
“Victims reported being lured to O’Smach Resort with false employment opportunities, having their phones and passports confiscated upon arrival and being forced to work scam operations. People who called for help reported being beaten, abused with electric shocks, made to pay a hefty ransom or threatened with being sold to other online scam gangs,” said the release.
Yong Phat, L.Y.P. Group and O’Smach Resort have been sanctioned by OFAC for being “foreign persons responsible for or complicit in, or having directly or indirectly engaged in, serious human rights abuse”.
The report noted that victims of various nationalities, including Chinese, Indian, Indonesian, Malaysian, Singaporean, Thai and Vietnamese, have been rescued from O’Smach since 2022.
Garden City Hotel, Koh Kong Resort and Phnom Penh Hotel were also included in the sanctions list for being owned, directly or indirectly, by or controlled on behalf of Yong Phat.
“As a result of today’s action, all property and interests in property of the designated persons described above that are in the US or in the possession or control of US persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 per cent or more by one or more blocked persons are also blocked,” said the release.
The foreign ministry expressed regret over the USDT’s decision to base its actions on the Trafficking in Persons Report, describing it as both “regrettable and misleading”.
“The report fails to provide a balanced and accurate representation of Cambodia's steadfast commitment to human rights, law enforcement and its determined efforts to combat human trafficking and forced labour,” the ministry said.
It added that the country remains open to cooperation and is committed to working with international partners, including the US, to address global challenges.
“However, we insist that such efforts be grounded in dialogue, mutual interest, respect for sovereignty and a genuine spirit of partnership,” it added.
The ministry emphasised that the imposition of unilateral sanctions undermines respect for international law and basic norms governing interstate relations, particularly the principles of sovereign equality and non-interference.
Other Cambodian figures have been previously sanctioned by the USDT, including former Prime Minister Hun Sen’s bodyguard unit commander Hing Bun Heang, deputy supreme commander of the Royal Cambodian Armed Forces (RCAF) General Kun Kim and tycoon Try Peap.
