9 September 2020
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The new Law on Anti-money Laundering and Financing of Terrorism was promulgated on 27 June 2020 (“AML Law”). The AML Law takes immediate effect upon the date of promulgation, and it abrogates the previous Law on Anti-Money Laundering and Combating the Financing of Terrorism dated 24 June 2007 and its subsequent amendment dated 03 June 2013 (“Previous AML Laws”). Although the AML Law has abrogated the Previous AML Laws, it must be noted that the AML Law specifies that the regulations made under the Previous AML Laws shall continue to be in force. The AML Law consists of 9 chapters and 47 articles.
The new AML Law combines the provisions of the Previous AML Laws and provides further measures to combat money laundering and the financing of terrorism in Cambodia. The most notable change in the AML Law is the addition of detailed definitions of technical terms which were not included in the Previous AML Laws. This elaboration will enable the relevant authorities to better categories which actors are involved in a transaction and their relevant obligations under the AML Law.
Furthermore, the AML Law imposes much stricter and extensive rules for reporting entities conducting know-your-client checks (defined therein) prior to providing services to such clients in order that reporting entities would be able to effectively identify any suspicious transactions which could potentially amount to money laundering or transactions that are financing terrorism and report such actors to the authorities. With the AML Law in force, reporting entities who come under the scope of the AML Laws will need to update their internal policies on accessing and analyzing their customers’ information to reflect the relevant provisions of the AML Law with regards to conducting know-your-client checks.
Lastly, unlike the Previous AML Laws, penalties to be imposed for offenses committed in violation of the AML Law is now divided into two sections namely: (i) disciplinary penalties and (ii) criminal penalties. While criminal penalties (fines and imprisonment) were stipulated in the Previous AML Laws, such penalties were not distinguished into penalties for individual offenders and corporate or legal entity offenders. The disciplinary penalties stipulated in the AML Law include the following:
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warning;
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reprimand;
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prohibition or restriction not to do any transaction or within the certain period of time as determined by the Ministry or Inspection Institute;
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revocation of business license;
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request to remove the position of officer or managing director that related to those reporting entities; and
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fines.
For more information, please contact:
Matthew Rendall, Senior Partner, SokSiphana&associates (a member of ZICO Law)
matthew.rendall@zicolaw.com
