Cambodia Country Summary

FATF Status

Cambodia is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies.

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation relating to the implementation of anti-money laundering and counter-terrorist financing standards in Cambodia was undertaken in 2023. According to that Evaluation, Cambodia was deemed Compliant for 2 and Largely Compliant for 31 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 1 of the Effectiveness & Technical Compliance ratings.

Cambodia faces significant challenges with endemic corruption that permeates various sectors, particularly the judiciary, customs, and tax authorities, deterring foreign investment and fostering a culture of bribery. The country's organized crime landscape is influenced by transnational networks and weak governance, with issues such as human trafficking, environmental crimes, and drug trafficking prevalent, while law enforcement remains under-resourced and compromised, further complicating efforts to combat these illicit activities.

Cambodia's economy demonstrated resilience with a GDP growth of 5.4 percent in 2023 and is projected to rise to 5.8 percent in 2024, primarily driven by a recovery in tourism and manufacturing sectors. The Royal Government of Cambodia (RGC) has implemented a Law on Investment that offers various incentives to attract foreign direct investment (FDI), such as 100 percent foreign ownership and tax holidays; however, systemic issues like corruption, inadequate infrastructure, and a lack of skilled labor continue to deter significant U.S. investment. Despite these challenges, Cambodia has seen a surge in Chinese FDI, which accounted for approximately 90 percent of total inflows in 2023, particularly in infrastructure and manufacturing, while the government is making efforts to improve the investment climate through increased engagement with the private sector.