https://www.phnompenhpost.com/national/aussie-ngo-report-speculates-on-laundering-from-kingdom

As Australia initiates reforms to its anti-money laundering mechanisms to counter laundering and the financing of terrorism, the Pacific nation’s media and an anti-corruption NGO have raised suspicions about real estate investments in Australia, in an attempt to shine a spotlight on Cambodian financial sources.

A joint report between advisory firm KordaMentha and Transparency International Australia released on May 6 suggests that a total of 118 properties worth at least AUD$110 million ($72 million) were purchased in Australia by “Cambodian foreign persons” from 2019 to 2023.

The report, titled “Stopping dirty money in Australia and Cambodia”, said that more than AUD$516 million ($339 million) in total funds was transferred from Cambodia to Australia in 2020 alone.

While they accepted that much of it may have been generated through legitimate financial activities or investments, they questioned whether the amount of money was proportionate to Cambodia’s wealth.

“In the 2022-23 financial year, AUD$33.4 million ($22 million) worth of Australian residential property was purchased by foreign nationals from Cambodia. The sections below provide insights into the amount of Cambodian funds entering Australia through ‘regulated channels”, the report said, pointing to a table of figures.

“The value of funds moving into Australia from Cambodia were unexpectedly large – on average the total funds flowing from Cambodia into Australia account for just under 1 per cent of Cambodia’s Gross Domestic Product (GDP) for the corresponding years,” it reported.

“Although not directly connected to Cambodia, AUSTRAC estimated that $1 billion ($650 million) was illegally invested in Australian real estate in 2020, highlighting the pattern for large illicit funds to make its way into Australia,” it added.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) is an Australian government financial intelligence agency in charge of anti-money laundering and counter-terrorism financing.

KordaMentha and Transparency International Australia claimed that they could only collate from the limited data sources that were available to identify the nature and scope of money from Cambodia or Cambodian nationals.

“It is our opinion that given the levels of corruption and investment from potentially illegal sources, combined with generally accepted research on money laundering means, that at least some of the funds flowing from Cambodia into Australia are likely to come from illicit origins,” the report said.

Cambodia, on the Financial Action Task Force (FATF) international money laundering “Grey List” since 2019, was removed from the list in February 2023, thanks to the Kingdom’s efforts to combat money laundering, terrorism financing and weapons proliferation financing.

The Post sought responses from several individuals involved in this area, including government officials, members of the real estate industry and representatives of the National Bank of Cambodia, the Cambodia Financial Intelligence Unit (CAFIU) and the Cambodia Chamber of Commerce (CCC), but no responses had been received as of May 9.

Hong Vanak, economics researcher at the Royal Academy of Cambodia, said that normally, the flow of money between two nations would be based on agreements by the respective governments, in this case, Cambodia and Australia.

He explained if Australian authorities were able to determine that any funds were the result of illicit activities, they would stop them from entering their country in the first place.

“Some Cambodians are perfectly able to invest in Australia, but the report appears to be suggesting that their investments come from dirty money, or that they involved corruption or drug trafficking. This is like an attack on the Kingdom’s reputation,” he added.

Vanak questioned the nature of Australia’s direct foreign investment laws.

“How can big companies invest in this country? Cambodian people should be able to make legitimate investments in Australia. We cannot track down every source of their income,” he said.

 “If they want to move to Australia permanently, invest there, or send their children to pursue their studies there, they should be able to do so. Their money could be from selling their land, or other legal business. I believe that some families can afford $1 million to move or send their children to Australia,” he continued.

While he made it clear that he did not defend people involved in making money through illicit means, he urged Australian authorities to set clear categories on what kind of money may not be invested in Australia.

“Should there be accusations, proof of illegal activities must be presented,” he added.