Cambodia | Laws against Money Laundering and WMD Financing

On 27 June 2020, Cambodia implemented two new laws, as follows: (i) the Law on Anti-Money Laundering and Combating the Financing of Terrorism and (ii) the Law on Combating the Financing of Weapons of Mass Destruction Proliferation.

1. NEW LAW ON ANTI-MONEY LAUNDERING AND COMBATING THE FINANCING OF TERRORISM, DATED 27 JUNE 2020.

The new Law on Anti-Money Laundering and Combating the Financing of Terrorism (“New AML Law”) was promulgated by the Royal Kram No. NS/RKM/0620/021 dated 27 June 2020.

The New AML Law consists of 9 Chapters and 47 Articles, aiming to set up measures against money laundering and financing of terrorism. The New AML Law was implemented to replace (i) Law on Anti-Money Laundering and Combating the Financing of Terrorism dated 24 June 2007 and (ii) Law on Amendment of Article 3, Article 29 and Article 30 of the Law on Anti-Money Laundering and Combating the Financing of Terrorism dated 03 June 2013, introducing significant changes relating to customer due diligence measures, obligations of government ministries and inspection institutions, and penalty provisions.

This New AML Law laid down more specific provisions regarding customer due diligence measures, which shall be carried out by the reporting entities. The reporting entities shall apply risk-based customer due diligence measures by applying enhanced customer due diligence measures if the customers are in the high risk category and normal customer due diligence measures if the customers are not in the high risk category. The Cambodia Financial Intelligence Unit (“CAFIU”) will issue guidelines on the implementation of these measures.

Pursuant to the New AML Law, government ministries and other supervisory authorities are obligated to issue rules, regulations and guidelines for the implementation of the New AML Law and cooperate with the CAFIU to encourage the reporting entities in establishing mechanisms to prevent money laundering and financing of terrorism.       

Criminal offences under the New AML Law include money laundering, denial of providing information, negligence in providing transaction reports, violation of disclosure of information and tipping off, violation of the obligations to keep professional secrecy and terrorism financing. The penalties of criminal offences under the New AML Law are more severe than the penalty provisions under the previous laws, with fines of up to KHR 2 billion (approximately USD 50,000).

The New AML Law entered into force on 28 June 2020.

2. LAW ON COMBATING THE FINANCING OF WEAPONS OF MASS DESTRUCTION PROLIFERATION DATED 27 JUNE 2020.

The Law on Combating the Financing of Weapons of Mass Destruction was promulgated by the Royal Kram No. NS/RKM/0620/019 dated 27 June 2020. This law consists of 8 Chapters and 24 Articles stipulating on procedures for freezing and seizing assets and establishing a number of new criminal offences.

Following the decision of the United Nations Security Council (“UNSC”) to include the names of individuals or entities in the freezing list, the Ministry of Foreign Affairs and International Cooperation shall without delay send the freezing list to the Ministry of Justice, and the Ministry of Justice shall send this list to the courts in order to freeze assets. Similarly, the Minister of Justice can give command to the general prosecutor attached to a court of appeal or the prosecutor attached to a court of first instance to include the names of individuals or entities in the freezing list. Any individual or entity that is affected by this decision may file complaint to the UNSC or the court to withdraw the name from the freezing list.

Pursuant to this law, the freezed assets can be seized in accordance with the decision of the court as requested by the general prosecutor attached to a court of appeal or the prosecutor attached to a court of first instance and commanded by the Minister of Justice.

Criminal offences under this law include the violation on the decision to freeze assets or transfer the assets, violation of reporting obligations, which will be subject to imprisonment of  up to 15 years and fines  of up to KHR 2 hundred million (approximately USD 50,000). Legal persons will be fined up to KHR 4 hundred million (approximately USD 100,000).