GGRAsia – Casinos still money-laundering risk for Cambodia: watchdog

Casinos still money-laundering risk for Cambodia: watchdog

Nov 04, 2019 Newsdesk Latest News, Rest of Asia, Top of the deck

Cambodia’s casino sector still represents a risk for the country in terms of money-laundering prevention and combatting the financing of terrorism. That is according to the Financial Action Task Force (FATF), a global financial watchdog based in Paris, France.

The FATF said in an announcement last month that Cambodia remained on the watchdog’s list of jurisdictions with “strategic anti money laundering [AML] and combatting the financing of terrorism [CFT] deficiencies”. The body however noted that the nation – since a meeting in February with FATF officials – had “taken steps towards improving its AML/CFT regime, including by initiating off-site and on-site supervision of the real estate and casino sectors.”

The latest document by FATF indicated that Cambodia “should continue to work on implementing its action plan to address its strategic deficiencies”, including those linked to the country’s casino industry.

A 10-point ‘must do’ list for authorities in Cambodia mentioned by FATF included “implementing risk-based supervision for real estate and casinos”, and “conducting sector-specific outreach to casinos”. Other measures featured in the list included improving training of law enforcement authorities, strengthening the country’s legal framework against money laundering and the financing of terrorism, and enhancing regulatory analysis of suspicious transaction reports.

Local media outlet Khmer Times reported earlier this year that, by April, authorities in Cambodia had granted a total of 163 casino licences country-wide. The majority – a total of 91 of licences – were for casinos in the province of Preah Sihanouk, where the seaside town of Sihanoukville is located.

Sihanoukville has been an expanding gaming hub in Cambodia. While much media attention has been paid recently to the issue of casino streaming services based in that location – allegedly aimed at Chinese customers offshore – Sihanoukville also boasts a number of bricks and mortar casino projects; many of those have been linked in stock market filings and media reports with Chinese investment.

Reports of imminent casino regulation in Cambodia have been circulating for several years. In June 2014, the Phnom Penh Post newspaper had reported that a draft of what it termed a “national casino law” was to have been finalised that year.

Currently, licences and the terms of such licences are issued by the authorities on a case by case basis.

A study by the United Nations Office on Drugs and Crime published in July stated that weak law enforcement and lax regulation within the Southeast Asia casino sector offered crime syndicates a ready channel for laundering illicit earnings, including those from drug trafficking.