Cambodia Strengthens AML Efforts to Avoid FATF Grey List Amid Crackdowns on Scam Operations

Cambodia’s National Bank is intensifying measures to combat cross-border crime and money laundering as the country works to avoid being placed on the Financial Action Task Force (FATF) grey list for a third time, amid ongoing enforcement against the nation’s notorious scam hubs. According to local Chinese-language media outlet The Cambodia China Times, National Bank of Cambodia Governor Chea Serey revealed at the bank’s annual work summary meeting that the institution is bolstering cooperation with relevant agencies and international partners to tackle systemic telecom fraud, money laundering, and terrorism financing.

Serey emphasized the importance of preventing re-listing on the FATF grey list, citing the potential damage to public confidence and investor trust. “If the situation cannot be improved, Cambodia will face the risk of being re-listed on the grey list, or even more serious consequences,” she warned. She also highlighted that negative reports about Cambodia’s telecom fraud operations have already affected the country’s reputation, with impacts on tourism, investor confidence, and cross-border financial activities.

The Cambodian government has responded with aggressive enforcement actions, including crackdowns on illegal casinos and online fraud operation centers, and the imposition of strict penalties on criminals to curb the proliferation of illicit activity. Cambodia’s Financial Intelligence Unit has collaborated with international authorities, revoking licenses of implicated institutions and freezing the assets of individuals as authorized by the judiciary. The National Bank is continuing coordination on the second national money laundering and terrorism financing risk assessment this year, while supervising reporting entities’ compliance with anti-money laundering and counter-terrorism financing (AML/CTF) obligations as mandated by law.

Authorities are enhancing monitoring and analytical tools for high-risk sectors such as real estate, casinos, and the legal profession, while expanding domestic and international cooperation on AML/CTF efforts. In a high-profile development, Cambodian authorities recently arrested Chen Zhi, chairman of Prince Group, and extradited him to China. Chen had previously been accused by the U.S. Department of Justice of running a major cross-border online fraud syndicate, which led to the confiscation of extensive assets—including cryptocurrencies—and sanctions against hundreds of affiliated companies. In Cambodia, his primary enterprises, including Prince Bank and real estate development companies, have been forced into liquidation by the National Bank and other regulators.

Cambodia’s FATF grey list history underscores the stakes of these enforcement efforts. The Paris-based FATF announced in February 2023 that Cambodia would be removed from the grey list due to progress in addressing technical deficiencies and improving AML/CTF systems. The country was first added to the grey list in 2011, removed in February 2015 after reforms, but re-listed on February 22, 2019. Reports from the National Bank of Cambodia indicate that the Cambodia Financial Intelligence Unit (CAFIU) intensified enforcement during the first half of the previous year to ensure all parties fulfilled their AML/CTF obligations. Investigations into large cash transactions without proper declaration increased by 13.1 percent year-on-year, while cases involving reporting entities failing to submit suspicious transaction reports rose by 21.8 percent.

Cambodia’s new Anti-Money Laundering and Counter-Terrorism Financing Law, passed in 2020, requires reporting entities—including banks, financial institutions, insurance companies, real estate agencies, and casinos—to conduct customer due diligence (CDD) to identify and verify customers and beneficial owners. Entities must submit suspicious transaction reports when there are reasonable grounds to suspect money laundering or terrorism financing, and cash transactions exceeding KHR 40 million ($10,000) must be reported. The law also prohibits the opening or maintenance of anonymous accounts or products that could facilitate illicit activity, while mandating that customer identity and transaction records be retained for at least five years following account closure or termination of a business relationship.

Through these strengthened regulatory and enforcement measures, Cambodia aims to protect its financial system, maintain investor confidence, and ensure it remains off the FATF grey list while combating the pervasive risks posed by telecom fraud and cross-border financial crime.

By fLEXI tEAM