U.S. targets corruption in Cambodia with advisory, sanctions

Nov. 11 (UPI) -- The Biden administration issued a business advisory warning U.S. companies doing business in Cambodia and sanctioned two members of the nation's military as it targets deepening corruption in the Southeast Asian nation.

The measures were taken Wednesday amid growing concerns in Washington over China's influence in Cambodia officials said undermine its sovereignty.

The advisory jointly issued by the Departments of State, Commerce and Treasury cautions U.S. businesses "to be mindful" of conducting interactions in Cambodia with private and public entities involved in corrupt business practices, criminal activities and human rights abuses.

Specially, the two primary areas of concern for U.S. companies are illicit financial activities in the financial, real estate, casino and infrastructure sectors and "entanglements" with Cambodian entities involved in trafficking people, wildlife and narcotics as well as related risks in the manufacturing and timber sectors.

"Corruption in Cambodia is endemic and widespread," the advisory said. "An increase in foreign investment from investors willing to engage in corrupt practices, combined with sometimes opaque official and unofficial investment processes, further drives the overall rise in corruption."

The warning cites several instances of Chinese influence in the nation, including State Department-sanctioned Wan Kuok Koi. Known by the alias "Broken Tooth," Wan is a member of the Chinese Communist Party and the leader of the 14K Triad, which deals in narcotics and is involved in Cambodia's casino sector.

It also emphasizes that Chinese state-owned enterprise Union Development Co. was granted a 99-year lease from the government for more than 36,000 hectares of land for a tourism development project in violation of Cambodian law that limits such deals to 10,000 hectares.

The Cambodian military was also used to "intimidate local villagers and clear out land" necessary for the project.

Earlier Wednesday, the treasury announced sanctions against Chau Phirun, director general of the Defense Ministry's Material and Technical Services Department, and Tea Vinh, the Royal Cambodian Navy commander, for "their roles in corruption."

"The United States will not stand by while corrupt officials personally benefit at the expense of the Cambodian people," Andrea Gacki, the treasury's director of the Office of Foreign Assets Control, said in a statement. "This administration will continue to prioritize anti-corruption efforts and work tirelessly to promote accountability."

The sanctions, which freeze the pairs' assets and block U.S. citizens from doing business with them, coincide with the State Department imposing visa restrictions against them and their immediate family members.

The treasury blacklisted the men on accusations of conspiring to inflate the cost of facilities at Ream Naval Base and personally benefiting from the proceeds by skimming funds from the project.

The Ream Naval Base, located on the Gulf of Thailand in Cambodia's Sihanoukville province, has attracted concerns from Washington.

In June, Deputy Secretary of State Wendy Sherman visited Cambodia and expressed "serious concerns" over China's military presence and construction of facilities at the base, which "undermine its sovereignty, threaten regional security and negatively impact U.S.-Cambodia relations," according to a release of the trip from the State Department.

She also sought clarification concerning the demolition of two U.S.-funded buildings at Ream without notification.

In October, the think tank Center for Strategic and International Studies issued a report stating new facilities were being built at the base to facilitate a Chinese military presence in the country.

The United States has voiced concern over Cambodia's lack of transparency concerning the issue.

"Today's actions reaffirm our commitment to supporting the Cambodian people and their aspirations for a peaceful, prosperous, democratic and equitable future," State Department spokesman Ned Price said in a statement. "The United States stands with all Cambodians whose work advances reforms, and the department will continue to use it authorities to promote accountability for corrupt actors in the region and globally."

According to the Global Competitiveness Report 2019 by the World Economic Forum, Cambodia was ranked 134 out of 141 countries for incidence of corruption and Transparency International's 2020 Corruption Perceptions Index ranked the Southeast Asian nation 160th out of 180 countries.