Business ethics and anti-corruption laws: Cambodia

Publication | September 2014

Transparency International (TI) rankings

Contributed by Bun & Associates

Cambodia is ranked 166 out of 177 on the TI CPI 2013.

Cambodia is not ranked on the TI BPI 2011.

International anti-corruption conventions and inter-governmental organisations

Cambodia has signed and ratified the UNCAC. It is also a member of the ABD/OECD Anti-Corruption Initiative for Asia and the Pacific.

Key anti-corruption laws

In Cambodia, the primary anti-corruption statutes which prescribe corruption as a substantive offence are the:

  • Law On Anti-Corruption – promulgated on 17 April 2010
  • Criminal Code – promulgated on 30 November 2009.

Features of bribery offences

The Criminal Code creates private offences for both individuals and legal entities alike. The majority of the bribery offences provided for in the Criminal Code target individuals. However, under Article 42, legal entities may be found criminally liable for the actions of their representatives.

The bribery offences targeting individuals are:

  • Article 278 (the requesting or accepting of bribes by an employee)
  • Article 279 (giving bribes to employees)
  • Article 280 (bribery by a director
  • Article 281 (attempting to bribe)
  • Article 282 (additional penalties for bribery)
  • Article 42 (criminal responsibility of legal entities), which provides that legal entities shall be criminally responsible for offences committed on their behalf by their organs or representatives. Specifically, under the Criminal Code, legal entities may be held criminally responsible for violations of Article 279 (giving of bribes to employees).

Both the Criminal Code and the Law on Anti-Corruption apply to the public sector.

Article 30 of the Criminal Code broadly defines “public officials” as: (a) any person appointed by legal instrument either temporarily or permanently, with or without remuneration and, regardless of his or her status or age, works in a legislative, executive or judicial institution; (b) any other person who works in the public service, including public agencies or enterprises or other public institutions within the meaning of the laws of the Kingdom of Cambodia. A holder of public elected office includes senators, members of the National Assembly, municipal councillors of the capital, provincial councillors, city councillors, district or Khan councillors, and commune or Sangkat councillors and any person holding public elected office in any other capacity.

Article 4 of the Law on Anti-Corruption defines public officials as any person holding office in legislative institutions, executive institutions, or judicial institutions, who is appointed by legal letter, whether permanent or temporary, whether paid or unpaid, regardless of his or her status or age. Other persons holding public office, including public agency or public enterprise as well as other public institutions as stated in the law of the Kingdom of Cambodia.

The Law on Anti-Corruption further defines foreign public officials and judges. Foreign public officials are defined in Article 4 as persons holding a legislative, executive, or judicial office of a foreign country, whether appointed or elected; and any foreigner exercising a public function for a foreign country, including for a public agency or public enterprise. Judges are defined as trial judges and investigation judges.

The Criminal Code has extraterritorial effect in cases based on:

  • citizenship
  • felonies committed against Cambodian nationals
  • certain felonies committed against the Kingdom of Cambodia, for example, counterfeiting Cambodian bank notes.

Compliance defence and mitigation

There are no specific provisions dealing with compliance defences under the laws of Cambodia. However, section 2 of the Criminal Code, which governs Causes of Criminal Irresponsibility or Lessening Responsibility, provides for several circumstances in which an individual may lesson or mitigate his or her criminal liability. Those circumstances are: mental disorder; authorisation by law; self-defence; defence of necessity; and compulsion.

Additionally, the principle of “no offence if there is no intention to commit” found in Article 4 of the Criminal Code can also negate or mitigate criminal liability.

Facilitation payments

The Criminal Code and The Law on Anti-Corruption of Cambodia strictly prohibit the payment of facilitation fees to public officials (foreign or local) or officials of public international organisations.

Gifts and entertainment

There is no specific limitation on the value of gifts that can be given to government officials under Cambodian law. However, the law clearly prohibits the giving of gifts of any value for purposes of corruption. Article 4 of the Law on Anti-Corruption defines a gift as any property or service given to or for the benefit of a person that is not given as a gift in accordance with custom or tradition. Further, the Law on Anti-Corruption specifically incorporates many provisions from the Criminal Code that prohibit the giving of gifts to government officials in order to influence the performance of their tasks. Therefore, the purpose of the gift given to a government official is more important that the value of the gift.

The custom of gift-giving is common in Cambodia and considered acceptable within certain limits. It is also very common to invite government officials to dinners and banquets, especially in celebration of any holiday or religious ceremony. In regard to giving personal property, it is very common for foreign nationals to give a souvenir from their respective country or even Cambodian nationals to give a gift after returning from a trip abroad. However, gifts of personal property given to government officials should be kept to a nominal value in order to avoid any suspicion or accusation of inappropriate gift-giving.

Corporate liability for the acts of intermediaries

Under Cambodian law, companies may be liable for the corrupt acts of their employees, subsidiaries, or agents. Article 42 (criminal responsibility of legal entities) provides that legal entities shall be criminally responsible for offences committed on their behalf by their organs or representatives. Specifically, under the Criminal Code, legal entities may be held criminally responsible for violations of Article 279 (giving of bribes to employees).

Article 46 of the Law on Anti-Corruption states that companies will be liable for Corrupt Proceeds Offences, which are defined as acts to conceal, keep or transport any kind of goods with knowledge that they are proceeds of corrupt acts. Therefore, a company may be liable for the actions of its employees, subsidiaries, or agents if it becomes involved with the proceeds of corrupt acts prohibited by the Law on Anti-Corruption.

Additionally, as a general concept of agency law in Cambodia, the principal is liable for the authorised actions of his or her agent. Further, under Article 369 of the Civil Code, a principal is liable for the unauthorised acts of his or her agent if he or she ratifies them. Therefore, accepting the benefit of an act of corruption could leave a company civilly liable under the Civil Code as well.

Liability of individual directors and officers

There is no law in Cambodia that specifically addresses the criminal liability of directors. However, Article 391 of the Criminal Code imposes criminal liability for breach of trust.

Breach of trust is defined as the misappropriation of funds, valuables or other property given and received subject to the condition of returning, redelivering, presenting or using them in a specified way.

Penalties

The Law on Anti-Corruption and the Criminal Code both impose specific penalties for nearly every offence under each law. A selection of those offences and penalties appears below:

  • Both the Law on Anti-Corruption and the Criminal Code penalise bribe-taking by a foreign public official or official of a public international organisation with a seven to 15 year prison term.
  • Under the Law on Anti-Corruption, abuse of power occurs when a public servant, in the course of duty, attempts to obtain an illegal advantage. The abuse of power offence is punishable by two to five years’ imprisonment and a fine. If aggravated, the prison term is five to 10 years.
  • Illicit enrichment is punishable by the confiscation of the unexplained property. If a person is required to declare his or her assets under the Law on Anti-Corruption, but fails to do so, he or she may be punished by a prison sentence from one month to one year and a fine.
  • Petty corruption offences are punishable under the Law on Anti-Corruption by a prison sentence ranging from seven days to five years.
  • Under the Criminal Code, proffering bribes to a public official is punishable by a prison sentence ranging from five to 10 years.
  • Giving bribes to employees or requesting or accepting bribes by employees is punishable by a prison sentence ranging from six months to two years and a fine. Bribery of judges is punishable by a prison sentence ranging from seven to 15 years, and bribery of a witness is punishable by a prison sentence ranging from five to 10 years.

Enforcement agencies

The primary enforcement agency charged with enforcing the Law on Anti-Corruption is the Anti-Corruption Institution. The Anti-Corruption Institution comprises the National Council Against Corruption and Anti-Corruption Unit. The primary duties of the National Council Against Corruption are to develop strategies and policies for fighting corruption, provide consultation and recommendations to the Anti-Corruption Unit regarding anti-corruption work, and oversee the operation of the Anti-Corruption Unit. The primary duties of the Anti-Corruption Unit are to implement the Law on Anti-Corruption, and receive and review all complaints on corruption and take action accordingly.

Anti-Money laundering laws

The Law on Anti-Money Laundering and Combating the Financing of Terrorism (Law on Money Laundering) and the Prakas (regulation) on Anti-Money Laundering and Combating the Financing of Terrorism govern money laundering in Cambodia.

The Law on Money Laundering imposes customer due diligence requirements under Article 8 on designated reporting entities listed in Article 4. Prior to establishing customer relations with an individual or entity, the reporting entity shall take customer due diligence measures, including the identification of the customer and the verification of the customer’s identity. In identifying customers, the reporting entity shall ascertain the name, birthday, and address of a natural person. For legal entities, the reporting entity shall ascertain the articles of incorporation or registration, tax identification number, address, and telephone number. Reporting entities shall also ascertain the ultimate beneficial owner of any legal entity customers. Reporting entities are also required to conduct on-going due diligence on the business relationships and scrutinise transactions undertaken throughout the course of the relationship.

Reporting entities are required to monitor certain types of transactions, such as complex, or unusually large transactions, transactions with unusual patterns that have no apparent or visible economic or lawful purpose, and transactions with businesses or institutions in countries with inadequate systems in place to prevent money laundering. Further, under Article 12 of the Law on Money Laundering, reporting entities are required to report certain cash and suspicious transactions to the Financial Intelligence Unit.

Reporting entities are required to keep all records pertaining to their business with customers for a minimum of five years after the account has been closed or business relations with the person have ended.

Whistleblowing

Cambodia does not have any specific laws on whistleblowing and the Law on Anti-Corruption provides only limited protection for whistleblowers. Under Article 13 of the Law on Anti-Corruption, the Anti-Corruption Unit is charged with implementing measures to keep whistleblowers secure. However, the Law on Anti- Corruption states, in Article 41, that defamatory or false complaints on corruption lodged with the Anti-Corruption Unit or judges, which lead to a futile inquiry, shall be punishable by imprisonment from one month to six months and a fine from 1 million Riel to 10 million Riel (approximately US$250 to US$2,500).

Data privacy

There is no general law in Cambodia governing data privacy. However, several specialised laws related to banking and financial institutions require customer consent before the disclosure of customer information.

Disclosure and privilege

In Cambodia, there are no specific laws dealing with the concept of legal professional privilege. The Code of Ethics for Lawyers of the Bar Association of the Kingdom of Cambodia provides in Article 19 that lawyers have a strict duty of confidentiality toward their client, except where laws permit or require disclosure of information.


Contact

BUN Youdy, Partner
Bun & Associates
bun@bun-associates.com


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