Cambodia's money laundering dilemmas are much bigger than the Everything But Arms (EBA) threat that could endanger the country's trade activities. A government official noted that laundering problems should be taken seriously.
According to the Phnom Penh Post, Deputy Prime Minister Sar Kheng said increasing reports about laundering in the country could bring "very huge devastation" to plans for growth and improvement.
Sar Kheng argued that laundered money will come from different channels and launderers will find ways to sneak them into the country since they know airports will be hard to infiltrate.
"Don't underestimate the problem. We cannot merely say that 'those who benefit from [money laundering] will just keep on doing it in secret,'" Sar Kheng explained. He said if the problem is not addressed appropriately the state and banking systems in the country will be affected.
For Sar Kheng, money laundering could lead to a lack of trust in Cambodia's laws and financial systems. He said the issue is just as pressing as the EBA dispute that could cause serious trade problems for the Kingdom.
Earlier this year, international money-laundering watchdog Financial Action Task Force (FATF) said it will keep watch of Cambodia's potential vulnerability to the matter. An official with knowledge of the situation told Reuters that the Kingdom is currently on the FATF's so-called "grey list."
Speaking about the EBA withdrawal, Sar Kheng pointed out that the deal's suspension could actually open other opportunities for Cambodia to find channels through which it can develop its own markets.
In February, the European Commission kicked off the process of withdrawing the privileges that Cambodia experienced under the EBA deal. It remains to be seen if the withdrawal will be pushed through in the coming months.
Some countries have rallied behind the Kingdom in this endeavor. According to the Khmer Times, Hungarian Prime Minister Viktor Orban said during his meeting with Cambodia's Prime Minister Hun Sen that Hungary will help the country in its battle for retaining the EBA scheme.
The Cambodian Ministry of Foreign Affairs said that Orban reaffirmed Hungary's support for the Kingdom. Orban reportedly pledged to "advocate on behalf of Cambodia to the European Union regarding the EBA."
The European Commission repeatedly stressed its concerns regarding the Kingdom's potential violation of human rights in the workplace. Furthermore, the Commission said Cambodia's rules on freedom of expression may be outside the bounds of global human rights standards.
Analysts are expecting a decision regarding the EBA scheme before the year ends.
