Cambodia Casino Corruption Risks For US Businesses Detailed in Washington Warning

Posted on: November 12, 2021, 06:12h. 

Last updated on: November 12, 2021, 07:41h.

The Biden administration has told US companies to steer clear of Cambodia and its casinos.

A joint business advisory warning (BAW) from the US State Department, US Treasury Department, and the US Department of Commerce highlighted “growing systemic corruption” in the country. And it warned that US companies place themselves at risk of exposure to “entities and sectors potentially involved in human rights abuses, criminal activities, and corrupt business practices” by investing in Cambodia.

“The deteriorating human rights situation in Cambodia, combined with increased and widespread corruption in the financial, real estate, casinos, and infrastructure development sectors, pose significant challenges in Cambodia for investors,” read the BAW.

Hotbeds of Crime

Cambodia’s casino sector has exploded in recent years, largely thanks to Chinese investment in the country. Many of the new casinos are in Sihanoukville, on the country’s west coast. Formerly a sleepy seaside town, Sihanoukville has been transformed into an adult playground for Chinese tourists.

Over 100 casinos and hotel resorts have sprung up in the surrounding province, and more than 70 in the city in just a matter of years.

The sector has become a hotbed for money laundering and human trafficking, according to the US government.

The increase in casinos over the past decade outpaced regulators’ capacity to monitor and police these establishments, attracting organized crime elements that invest in casinos and use them to launder money,” the BAW read.

“In addition to Cambodia’s weak [anti-money laundering] and [counter-terrorist financing] regime, vulnerabilities include a largely cash-based, dollarized economy, and porous borders. Both legal and illicit transactions, regardless of size, are frequently conducted outside of regulated financial institutions.”

Broken Tooth

The BAW highlights the involvement of Wan Kuok Koi, aka “Broken Tooth,” in Cambodia’s casino industry. Wan is widely reputed to be the leader of the Hong Kong-based 14K, the second-largest triad group in the world.

The 14K engage in drug trafficking, illegal gambling, racketeering, human trafficking, and a range of other criminal activities, according to the US government. Wan was sanctioned by the US Treasury in December 2020 over concerns he was expanding his criminal empire throughout Southeast Asia.

Military Figures Sanctioned

The BAW comes 24 hours after the US Treasury imposed sanctions on two senior figures in the Cambodian military.

The Treasury said it would freeze any US assets and criminalize transactions for Senior defense ministry official Chau Phirun and naval commander Tea Vinh over alleged corruption linked to the Ream Naval Base in the Gulf of Thailand.

In October, the Center for Strategic and International Studies (CSIS) claimed new facilities were being built at the base. That was allegedly in readiness for a Chinese military presence in the country.

Cambodia has dismissed the sanctions as “politically motivated.”

Source: https://www.casino.org/news/washington-warns-us-businesses-of-cambodia-casino-corruption-risks/