The US Embassy in Phnom Penh has given a list of 27 companies suspected of helping fund worldwide terrorism to the National Bank, but commercial bankers here say weak financial laws and porous borders ultimately make Cambodia an easy place to launder money.
The US government issued a list of suspect companies whose assets, if found in foreign banks, should be frozen as the US intensifies its war against terrorism.
To comply with that request, the National Bank and commercial banks are looking for any of those companies that may have invested here, and are also looking for suspicious names or large deposits as a way to target suspected money launderers, banking officials and executives said last week.
Commercial bank operators, while promising they were doing all things possible to target possible terrorism accomplices, said the money laundered in Cambodia often crosses, as cash, through the country’s weak borders, and then is invested and filtered through other smaller companies undetected by weak laws.
“How could we know if they are laundering through any company doing investment here?” asked one executive, speaking on conditions of anonymity. “It is difficult to check out, in the current situation, where the controlling system has been limited.
“The commercial banks have never met this kind of case before. We won’t be able to check them out,” the executive said.
Chea Sok, a board member of the ACLEDA Bank, said 30 years of experience had taught him that the launderers will not go through the banks here.
“I don’t think they will choose the banks for laundering, but the border is a target. You see that a tourist can take a taxi from Poipet to Vietnam directly now,” said Chea Sok, who is a former National Bank official.
ACLEDA Bank received a request from the National Bank last Monday asking they be informed on money laundering activities that may be related to the international terrorist attack on the US, according to In Chany, director-general for ACLEDA.
Other banks also have begun searching for terrorists among their depositors.
Canadia Bank had a meeting with all its department chiefs, and found neither bank accounts on the suspect list nor depositors with Arabic names, said Roth Kumnith, legal adviser for the bank.
The National Bank wants all Cambodian banks to do the same.
“I think all bank operators will easily know if there is laundering through their banks. We will know the source of the money, transferred from which bank, and what the bank account number is,” said National Bank director general Tal Nai Im.
Such fiscal profiling will also help tip off banks to investors who might support terrorist networks such as al-Quaida, the terrorist organization of Osama bin-Laden, the prime suspect in the Sept 11 attacks on the World Trade Center and the Pentagon, Tal Nai Im said.
“We are also able to investigate the name of the person. Is it a Cambodian name? Or a foreigner name that sounds Muslim? Do they look strange to us?” he said.
But the key tip-off for banks will be those who deposit large amounts of money in the few banks in Cambodia, he said.
“We don’t care who they are. If anyone deposits in the bank more than $1 million, he will be under suspicion,” a high-ranking official at the Foreign Trade Bank said. High-profile international aid agencies like the UNDP would be above suspicion, the official added.
