Cambodia Officially Enters ‘White List’ & Delisted from Money Laundering ‘Grey List’

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Feb. 24 2023 – Cambodia has been delisted from the ‘Grey List’ of countries who are “under ‘increased monitoring'” after the global watchdog, Financial Action Task Force (FATF), decided that Cambodia had complied with international standards to combat money laundering and terror financing during the plenary meeting on Friday. 

The decision was made after a series of reforms, and with the combined efforts of the relevant sectors like Cambodia Financial Intelligence Unit (CAFIU), real estate firms, and government ministries with APG (Asia/Pacific Group on Money Laundering).

However, the country will have to continue to work with APG and other partners in order to maintain their status as a compliant member of the international community. In addition to Cambodia, Morocco has also been removed from the greylist, while South Africa and Nigeria are among the new countries subject to increased monitoring. 

What is FATF and ‘Grey List’

The Financial Action Task Force (FATF) has added Cambodia to its grey list in 2019, which means it considers the country a haven for terror funding and money laundering.

The FATF is a global body whose mandate was expanded after 9/11 to include both money laundering and terror financing. It aims at safeguarding the international financial system by setting standards for combatting money laundering, organized crime and terror financing. It also monitors countries and makes recommendations for improvements in their policies.

The purpose of FATF’s grey list is to warn the financial community on which countries are unlikely safe for investment and funding. Countries that are placed on the FATF’s grey list are nations that do not meet international standards for preventing financial crimes. Consequently, grey listed countries has to meet certain criteria within a specified time period or face being blacklisted—the highest level of indictment. So far, only three countries have been blacklisted: Iran, North Korea, and Myanmar.

Annually, FATF conducts three meetings of its central decision-making body, the plenary, wherein all the 37 member jurisdictions and two regional organizations approve the outcomes through a consensus.

For Cambodia, FATF had been an important measure to fight terrorism, money laundering and prevent financing for the proliferation of weapons of mass destruction.

What is the effect of Cambodia’s Removal from ‘Grey-list’

After the confirmation that Cambodia has already fulfilled its obligation to FATF and that the FATF has done its visitation to the country, Interior Minister Sar Kheng said that “when Cambodia leaves the grey list and returns to the white list, it will be possible to remove financial barriers to attracting foreign investment and trade to Cambodia.” In a separate address of the issue, he also said that “the National Bank of Cambodia will have obstacles in conducting money transactions.”

The removal of Cambodia from ‘grey list’ countries could provide a significant boost to its economy and improve sentiment, which is important from a foreign direct investment perspective.

IPS Cambodia Real Estate
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