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
- S. Departments Advisory: Cambodia Business Advisory on High-Risk Investments and Interactions
- OFAC Global Magnitsky Designations: Specially Designated Nationals List Update
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