Cambodia: Removal from FATF grey list ‘positive sign for attracting foreign investors’

Removing Cambodia from the ‘Money Laundering Grey List’ of the Financial Action Task Force (FATF) is a positive sign for attracting investors and foreign capital inflows, said a senior official.

Director-general of Taxation at the Ministry of Economy and Finance Kong Vibol made the remarks in a dissemination workshop on income tax obligations, completion of annual income tax returns, investigation of tax offences and anti-money laundering yesterday.

The move allows foreign investors to increase their investment in the country as they can easily make money transfers to their investment projects, Vibol said.

Under the grey list, investment money from foreign investors has been always asked for the source and purpose of the money, he said.

“Now FATF has taken off Cambodia from the grey list, which should be applauded because it is a very positive sign for Cambodia in attracting investment, foreign capital and cash flow,” he said.

“Now we are back on the clean list,” Vibol said.

A country is placed on a grey list to warn the financial community that the affected Financial Action Task Force or FATF high-risk country is not putting in the required effort to combat financial crime.

The primary goal of the FATF Standards is to combat organized crime, illegal drugs, human trafficking, corruption, and terrorism.

FATF is also striving to prevent cash from being used to fund weapons of mass devastation by high-risk countries. The FATF advises governments on how to combat financial crime and assesses the policies and procedures of its members.

The FATF removed on February 25 Cambodia from its grey list of high-risk countries for money laundering after the Southeast Asian nation had been listed since 2019.

The global money-laundering watchdog said Cambodia had made progress in improving anti-money laundering and combating the financing of terrorism regimes.

Vibol attributed the move to the efforts by authorities to crack down on financial crime, especially money laundering, in which the General Department of Taxation has played an important role to show the FATF that the Cambodian government has made efforts to reform itself to clean up.

“The suppression of the tax offence is that we are not going to place pressure on taxpayers. According to the revenue collection strategy from 2018 to 2023, it is the strengthening of equal tax payment. We cannot let a few of them who have always thought of tax evasion make impacts to compliant taxpayers,” he said.

Cambodia will continue to strengthen itself to be on the white list or clean list forever, and together to eliminate tax evasion in Cambodia, while now the number of people who comply with the increase, he said.