The General Department of Customs and Excise in Cambodia is currently undergoing a massive structural overhaul to eliminate trade-based money laundering risks that threaten national fiscal stability. With technical assistance from the International Monetary Fund, the government is implementing six distinct revenue mobilisation methods to ensure the nation can independently finance public services. Officials aim to replace the outdated 2007 customs legislation with a modern framework designed to detect sophisticated financial crimes within the supply chain. This reform is essential for Cambodia as it prepares to graduate from Least Developed Country status by 2030 and faces a reduction in external aid. Strengthening enforcement against illicit financial flows is now a primary priority to prevent significant revenue losses and maintain macroeconomic integrity during this transition.

Combating Trade-Based Money Laundering in Southeast Asia

The integration of advanced investigative techniques into the Cambodian customs framework marks a significant shift in how the nation addresses the complexities of trade-based money laundering. This specific form of financial crime involves the exploitation of international commerce to disguise the origins of illicit funds, often through the manipulation of invoices and the misrepresentation of goods. The International Monetary Fund has highlighted that these schemes, which include over-invoicing and under-invoicing, directly erode the integrity of customs collections and distort essential trade data. By developing practical tools and methodologies for targeted audits, the General Department of Customs and Excise intends to close loopholes that have historically allowed criminal entities to move value across borders undetected. This initiative is not merely about domestic security; it is a strategic move to align with global standards and provide stakeholders with the predictability required for effective international trade.

The complexity of modern global supply chains requires customs officers to move beyond traditional document reviews. Specialized training is being introduced to help personnel detect irregularities that span multiple jurisdictions and various types of declarations. This training focuses on identifying the subtle signs of value transfer that do not involve physical cash, such as the multiple invoicing of goods or the shipment of phantom merchandise. Because trade-based money laundering is often intertwined with other forms of commercial fraud, the new strategy emphasizes a holistic approach to compliance and risk profiling. By securing these revenue streams, Cambodia expects to bolster its revenue to gross domestic product ratio, which was estimated at 14.9 percent for the current year. The success of this transition depends on the ability of the state to maintain reform momentum and ensure that every commercial transaction is transparent and verifiable.

Enhancing Inter-Agency Collaboration for Financial Integrity

A critical component of the current reform involves the creation of multi-agency workshops designed to foster intelligence sharing between various branches of the government. The General Department of Customs and Excise is working closely with the Financial Intelligence Unit, the National Bank of Cambodia, and the national police to build a unified front against financial crimes. This cross-sectoral capacity for enforcement is necessary because trade-based money laundering frequently bypasses the traditional monitoring systems used by banks. When illicit actors use trade transactions to move money, the paper trail is often buried within legitimate shipping documents, making it difficult for a single agency to identify the full scope of the activity. Through these collaborative workshops, the Cambodian government is developing a more robust ecosystem where data from customs declarations can be cross-referenced with financial transaction reports to flag suspicious behavior in real time.

This collaborative approach also extends to the management of special economic zones and the rapidly growing e-commerce sector. As digital trade increases, the volume of small packages and cross-border shipments presents new challenges for risk management and manifest review. The International Monetary Fund is providing technical support to ensure that digital clearance systems are capable of handling these high volumes without compromising security. By aligning these systems with World Customs Organisation standards, Cambodia is creating a framework that supports legitimate business while simultaneously hardening the border against those seeking to exploit the digital marketplace for money laundering purposes. The goal is to create an environment where the regulatory framework is clear, operational, and capable of adapting to the evolving tactics used by criminal organizations to distort trade for financial gain.

Modernizing Customs Legislation and Audit Protocols

The enactment of a new Customs Law in 2026 is expected to provide the legal coherence and operational clarity required to sustain these long-term reforms. The existing law, which has been in place since 2007, is increasingly viewed as insufficient for addressing the sophisticated nature of modern trade-based money laundering. The draft of the new legislation has undergone internal technical reviews and is now being subjected to objective assessments to ensure it meets international best practices. This legal update is paired with a revision of the post-clearance audit process, which serves as a second line of defense against non-compliance. By improving the Automated System for Customs Data, the authorities can apply more sophisticated algorithms to identify high-risk shipments before they enter or leave the country.

Post-clearance audits allow the government to verify the accuracy of trade declarations after the goods have been released, providing a vital mechanism for uncovering long-term schemes that may not be apparent during a standard inspection. This process is particularly effective at identifying systemic under-invoicing, where companies consistently undervalue goods to reduce their tax liability while moving the remaining value through unofficial channels. The International Monetary Fund’s technical assistance ensures that these audit protocols are both rigorous and fair, providing a deterrent to fraud while minimizing disruptions to honest traders. As Cambodia moves toward its 2030 development goals, the ability to collect fair revenue from international trade will be the foundation of its fiscal resilience and its ability to fund essential public infrastructure and social services.

Strategic Resilience and Global Compliance Standards

The commitment to eliminating trade-based money laundering is fundamentally linked to Cambodia’s broader macroeconomic stability and its reputation in the global financial community. When a nation successfully demonstrates its ability to combat illicit financial flows, it enhances its credibility and attracts higher levels of foreign direct investment. The technical assistance provided by international economists like Cindy Negus underscores the global importance of these reforms. By establishing a clear and actionable timeline for these changes, Cambodia is signaling to the world that it is serious about its responsibilities as a growing economic power. This transparency is vital as trade preferences decline, forcing the country to compete on a more level playing field where the integrity of the regulatory environment is a key competitive advantage.

Ultimately, the goal of these comprehensive reforms is to ensure that the national coffers are secure and that the government has the resources needed to meet its development goals independently. By focusing on the elimination of trade-based money laundering, Cambodia is protecting its financial system from distortion and ensuring that the benefits of trade are distributed fairly across the economy. The shift toward a more automated, data-driven, and legally sound customs framework represents a significant milestone in the country’s journey toward economic maturity. As the new laws and systems come online throughout 2026, the combined efforts of the Cambodian authorities and their international partners will create a more resilient and transparent gateway for global trade, securing the nation’s path toward a prosperous and self-sufficient future.

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Key Points

• The General Department of Customs and Excise is launching a new customs law in 2026 to modernize the legal framework and align with international standards.
• Technical assistance from the International Monetary Fund is focused on eliminating trade-based money laundering through advanced risk profiling and targeted audits.
• Cambodia aims to improve its revenue-to-GDP ratio by addressing commercial fraud and schemes such as over-invoicing and under-invoicing.
• Multi-agency collaboration involving the Financial Intelligence Unit and the National Bank of Cambodia is being strengthened to enhance enforcement and intelligence sharing.

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Related Links

• International Monetary Fund Cambodia Technical Assistance Reports
• World Customs Organisation Standards and Guidelines
• Financial Action Task Force Guidance on Trade-Based Money Laundering
• General Department of Customs and Excise of Cambodia Official Portal
• United Nations Development Programme Cambodia Revenue Mobilisation Strategy

Other FinCrime Central Articles About TBML

• How Trade-Based Money Laundering (TBML) Evolves and Challenges Compliance
• How Smart Data Linkage Could Break the TBML Game for Good
• TBML Enablers: Under‑Regulated Brokers and Freight Forwarders in the Crosshairs

Source: Kiripost, by Sangeetha Amarthalingam

Some of FinCrime Central’s articles may have been enriched or edited with the help of AI tools. It may contain unintentional errors.

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