PRAKAS NO. B7-020-352 BR.K ON CREDIT REPORTING, DATED ON 26 JUNE 2020.
The National Bank of Cambodia (“NBC”) issued Prakas No. B7-020-352 Br.K on Credit Report (“Prakas on Credit Reporting”) on 26 June 2020, replacing its previous Prakas No. B7-011-145 on Credit Reporting dated 24 May 2011 (“Previous Prakas”). The Prakas on Credit Reporting introduces new changes such as the introduction of bounced checks reporting and cross-border credit information sharing subject to NBC’s approval and the expansion of the data source and the permissible use of credit information, as well as more detailed and stringent rules relating to data privacy and consumer rights.
The Prakas on Credit Reporting introduces bounced checks reporting. Under Article 17, a Credit Reporting System Service Provider (“CRSP”) will collect, load, and disseminate credit information, information regarding bounced checks, and related data of customers obtained from covered entities, authorized users and other permitted data providers, and other publically available information collected via lawful means. In addition, subject to approval from the NBC, the CRSP may now collect information related to loan from electricity, water, telecom, internet, and other service providers. Pursuant to Article 12, a CRSP will retain the information for 15 years and disseminate the information within the following periods:
- 10 years from the maturity date in case of positive credit information;
- 3 years from the maturity date in case of negative credit information;
- 2 years from the date the check is being returned in case of information on bounced checks; and
- 5 years from the date of discharge in case of bankruptcy data.
A CRSP may share credit information overseas within the credit sharing cooperation framework provided that there is prior approval from the NBC. Further, the CRSP must ensure the protection of customer privacy, resolution of disputes, correction of data, security of data, and that prior consent is obtained from customers.
The Prakas on Credit Reporting also introduces new data privacy rules. A CRSP is obligated under Article 11 to notify the NBC in the event of the loss or leakage of data. Customers also have the right to receive information regarding the loss or leakage of data and to request for the temporary suspension of the sharing of their credit information in the case of fraudulent use or theft of their identities, pursuant to Articles 22 and 23.
The Prakas on Credit Reporting carried over the licensing requirements for CRSP from the Previous Prakas. Under the Prakas on Credit Reporting, a person (other than the NBC) engaging in credit reporting activities or hold himself out to the public as engaging in credit reporting activities must be a legal entity established under the Law on Commercial Enterprises and obtain a license from the NBC.
On 27 June 2020, Cambodia implemented two new laws, as follows: (i) the Law on Anti-Money Laundering and Combating the Financing of Terrorism and (ii) the Law on Combating the Financing of Weapons of Mass Destruction Proliferation.
(1) NEW LAW ON ANTI-MONEY LAUNDERING AND COMBATING THE FINANCING OF TERRORISM, DATED 27 JUNE 2020.
The new Law on Anti-Money Laundering and Combating the Financing of Terrorism (“New AML Law”) was promulgated by the Royal Kram No. NS/RKM/0620/021 dated 27 June 2020.
The New AML Law consists of 9 Chapters and 47 Articles, aiming to set up measures against money laundering and financing of terrorism. The New AML Law was implemented to replace (i) Law on Anti-Money Laundering and Combating the Financing of Terrorism dated 24 June 2007 and (ii) Law on Amendment of Article 3, Article 29 and Article 30 of the Law on Anti-Money Laundering and Combating the Financing of Terrorism dated 03 June 2013, introducing significant changes relating to customer due diligence measures, obligations of government ministries and inspection institutions, and penalty provisions.
This New AML Law laid down more specific provisions regarding customer due diligence measures, which shall be carried out by the reporting entities. The reporting entities shall apply risk-based customer due diligence measures by applying enhanced customer due diligence measures if the customers are in the high risk category and normal customer due diligence measures if the customers are not in the high risk category. The Cambodia Financial Intelligence Unit (“CAFIU”) will issue guidelines on the implementation of these measures.
Pursuant to the New AML Law, government ministries and other supervisory authorities are obligated to issue rules, regulations and guidelines for the implementation of the New AML Law and cooperate with the CAFIU to encourage the reporting entities in establishing mechanisms to prevent money laundering and financing of terrorism.
Criminal offences under the New AML Law include money laundering, denial of providing information, negligence in providing transaction reports, violation of disclosure of information and tipping off, violation of the obligations to keep professional secrecy and terrorism financing. The penalties of criminal offences under the New AML Law are more severe than the penalty provisions under the previous laws, with fines of up to KHR 2 billion (approximately USD 50,000).
The New AML Law entered into force on 28 June 2020.
(2) LAW ON COMBATING THE FINANCING OF WEAPONS OF MASS DESTRUCTION PROLIFERATION DATED 27 JUNE 2020.
The Law on Combating the Financing of Weapons of Mass Destruction was promulgated by the Royal Kram No. NS/RKM/0620/019 dated 27 June 2020. This law consists of 8 Chapters and 24 Articles stipulating on procedures for freezing and seizing assets and establishing a number of new criminal offences.
Following the decision of the United Nations Security Council (“UNSC”) to include the names of individuals or entities in the freezing list, the Ministry of Foreign Affairs and International Cooperation shall without delay send the freezing list to the Ministry of Justice, and the Ministry of Justice shall send this list to the courts in order to freeze assets. Similarly, the Minister of Justice can give command to the general prosecutor attached to a court of appeal or the prosecutor attached to a court of first instance to include the names of individuals or entities in the freezing list. Any individual or entity that is affected by this decision may file complaint to the UNSC or the court to withdraw the name from the freezing list.
Pursuant to this law, the freezed assets can be seized in accordance with the decision of the court as requested by the general prosecutor attached to a court of appeal or the prosecutor attached to a court of first instance and commanded by the Minister of Justice.
Criminal offences under this law include the violation on the decision to freeze assets or transfer the assets, violation of reporting obligations, which will be subject to imprisonment of up to 15 years and fines of up to KHR 2 hundred million (approximately USD 50,000). Legal persons will be fined up to KHR 4 hundred million (approximately USD 100,000).
The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situation.