U.S. Advisory Warns Of Risks For Businesses With Ties To Cambodia – Finance and Banking

In a Business Advisory on “High-Risk
Investments and Interactions,” the U.S. Departments of State,
Treasury and Commerce (collectively, the “Departments”)
highlighted legal, reputational and economic risks for U.S.
businesses and financial institutions with operations, client
relationships or supply chains that extend into Cambodia.
Separately, OFAC added two Cambodian individuals to its list of
Specially Designated Nationals in accordance with the Global Magnitsky Designations Regulations.

Due to “increased and widespread corruption” in
Cambodia, as well as its deteriorating human rights situation, the
Departments advised U.S. firms to exercise appropriate caution in
connection with certain dealings in the country. The Advisory
warned that transactions in the financial, real estate, casino and
infrastructure sectors are marred by corruption and money
laundering. In addition, the Advisory cautioned that numerous
Cambodian entities are engaged in the trafficking of persons, drugs
and wildlife, as well as in the illegal timber trade and the use of
forced labor.

The Departments encouraged appropriate due diligence to identify
these risks, and advised U.S. financial institutions to assess
their potential exposure to clients engaged in illicit dealings and
“implement a mitigation process that aligns with that risk,
consistent with their [Bank Secrecy Act] requirements.”

Primary Sources

1. S. Departments Advisory: Cambodia Business
   Advisory on High-Risk Investments and
   Interactions




2. OFAC Global Magnitsky Designations: Specially
   Designated Nationals List Update

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