In what is being called the first successful crackdown on export license fraud, officials announced Monday that 10 men and women have been arrested for selling documents and seals to garment factories in China to make it seem as if their products came from Cambodia.
One of the arrested suspects also named a high-ranking Ministry of Commerce official as being involved in the scheme, but he has not been arrested and authorities say the investigation is continuing.
The garment factories in China exported their products to the US and to European countries, which give Cambodia a special trade status that allows its products to come in duty free. By pretending their products came from Cambodia, the Chinese garment factories saved money by not having to pay taxes.
Eight of the 10 men and women arrested Friday and Saturday in Phnom Penh worked for garment factories in Cambodia, said Heng Peo, deputy chief of penal police for the Ministry of Interior. Another man was accused of making fake seals and another worked for the Ministry of Culture.
Police also seized one Ministry of Commerce seal, one Camcontrol (product inspection) seal, one machine that makes seals and three sets of falsified documents, among other items, Heng Peo said.
“The police action shows US customs authorities that the Ministry of Commerce and the government has been successful in cracking down on bad people,” Heng Peo said during a press conference Monday.
Ministry of Commerce officials had been aware of the scam since 1998 and reported their suspicions to the Ministry of Interior, but authorities have been unable to make significant progress in the case until now, Heng Peo said.
Authorities said they have proof of five incidents in which fake documents and seals were sold to garment factories in China, although they suspect there have been more than 100 such incidents.
“The document that police found are ones issued by the Ministry of Commerce for issuing export licenses,” Heng Peo said. “But actually, there were no such goods exported from Cambodia.”
Heng Peo said authorities also suspect some Ministry of Commerce officials were involved in the scheme. “If there are Commerce officials involved, then the government will take action.”
Bun Oun, one of the arrested, accused Mok Pichrith, director of the Generalized System of Preferences office in the Ministry of Commerce, of being involved in the scheme, according to a Ministry of Interior document.
Bun Oun, who confessed he made false documents for nine months, said he took the documents to Mok Pichrith to sign at least six times. Bun Oun, who works at Kang Keav garment factory, said he paid the government official $2,000 for each signature, according to the Ministry of Interior document.
“We always met at night,” Bun Oun said.
Mok Pichrith denied that he was involved in the scheme, and said he was the one who reported the scandal in the first place.
“If I was involved, why would I have initiated the crackdown on the case?” Mok Pichrith said. “I think there must be someone who wants me to fall down. I’m not corrupt. I hope justice will help me.”
Sok Bun, a 25-year-old employee at Ysen company, said in the Interior Ministry document he made three false certificates of origin in March for Bun Oun. Sok Bun said he made $3,000 for each certificate.
Commerce Minister Cham Prasidh told Reuters that last year, Cambodia lost up to 30 percent of its export quota levels because of fake documentation.
Khek Ravy, secretary of state for the Ministry of Commerce, said Monday that now that the arrests have been made, Cambodia will not lose money because of the export license scheme, as the US will not count the products that came in under the fake licenses.
Khek Ravy said Cambodia and the US have set up a computer system that is able to determine whether a certificate of origin is authentic. “There will be no more problems about false certificates of origin and fake documents.”