In 2015, NagaCorp Ltd ("NagaCorp") appointed Hill & Associates Ltd ("H&A"), an independent security and risk management consultancy with working knowledge of anti-money laundering ("AML") and Risk Management, to conduct two independent reviews of the internal controls of NagaCorp with a focus on AML controls. The site visits took place in July 2015 and January 2016.
Prior to the second site visit H&A and NagaCorp had conducted an exercise to examine updated AML regulations with a focus on gaming which had been enacted in other global jurisdictions in the past year. These included enhancements introduced by the Casino Regulatory Authority in Singapore and similar updates in the European Union and the United States. Our exercise did not reveal any areas where current NagaCorp controls were deficient with regard to new or existing AML controls in any of the jurisdictions.
NagaCorp continues to apply the controls required in the updated AML Manual which was produced by NagaCorp in the first half of 2014. The reason for this updating was to reflect the requirements of both the Cambodian 2010 AML Prakas and also the updated 2012 Financial Action Task Force ("FATF") Recommendations. As previously reported, there were no substantive changes to the FATF Recommendations but an updated numbering system had been adopted for the Recommendations and this report reflects these changes in the findings section.
Significantly, as H&A noted in our previous review, the most recent assessment of Cambodia by FATF has resulted in the recognition of the progress made by the country with respect to anti-money laundering controls. The following was published by FATF at its Paris conference in February of 2015.
"The FATF welcomes Cambodia's significant progress in improving its AML/Countering Financing of Terrorism ("CFT") regime and notes that Cambodia has established the legal and regulatory framework to meet its commitments in its action plan regarding the strategic deficiencies that the FATF had identified in June 2011. Cambodia is therefore no longer subject to the FATF's monitoring process under its on-going global AML/CFT compliance process. Cambodia will work with the Asia/Pacific Group on Money Laundering ("APG") as it continues to address the full range of AML/CFT issues identified in its mutual evaluation report."
Importantly, NagaCorp was invited to attend a Pre-Mutual Evaluation Workshop conducted by APG which took place on January 18-19, 2016. This workshop was an integral part of the process leading to an updated evaluation of Cambodia by the APG which shall take place in December 2016. The purpose of the APG is to ensure the adoption, implementation and enforcement of internationally accepted anti-money laundering and counter-terrorist financing standards as set out in the FATF Forty Recommendations and FATF Eight Special Recommendations. During the workshop, attended by Mahendran Supramaniam on behalf of NagaCorp, Cambodian officials referred positively to the contribution of NagaCorp to the country's AML development.
During the site visit H&A also reviewed records on the ongoing AML training of relevant NagaCorp staff. In 2015 a total of 360 staff attended courses based on the Company's Training Manual which was previously evaluated by H&A as a particularly useful training tool. Details of the training that has taken place were provided by NagaCorp and this ongoing process is recognized by H&A as providing substantial understanding of AML issues at all levels of NagaCorp.
As with the audits of the last few years, our main point of contact remains Mr. Mahendran Supramaniam, who is the Head of Internal Audit and in that role has significant involvement in the successful application of all required AML controls, in coordination with the NagaCorp Compliance Officer Mr. Philip Lee. H&A recognizes the continued significant positive importance of this role in advising on the controls and procedures within the AML department and implementing all audit operations in NagaCorp. There has been no deterioration whatsoever in the diligence applied in the adherence to all laws and regulations concerning AML in NagaCorp. One area where internal controls are in the process of being amended to ensure that they are comprehensively applied is in the recording of chip purchases taking place at gaming tables in addition to transactions taking place at the cages. The purchase of chips at tables was introduced in the second half of 2015 as this is a service offered at all casinos operated by international companies in major gaming jurisdictions. New procedures are being documented to ensure that record keeping at the tables is as comprehensive as that completed at the cages.
Cooperation between the Financial Intelligence Unit ("FIU") within the National Bank of Cambodia and NagaCorp is ongoing. Sources within the National Bank of Cambodia and also external sources consulted by H&A acknowledge that NagaCorp remains at the forefront of AML compliance efforts in Cambodia.
H&A notes that the Suspicious Transaction Records (STRs) continue to record all necessary and relevant information and that there is cross-checking between surveillance, operations and AML compliance staff within a large number of these reports. The review team is satisfied NagaCorp maintains full control of the gaming operations and these operations remain compliant with all relevant FATF recommendations.
H&A recognizes that NagaCorp remains at the forefront of implementing AML controls in Cambodia and we also note that NagaCorp is committed to full compliance with all national and international laws and regulations on AML. The review team found NagaCorp to be in full compliance with all relevant FATF recommendations and also noted that the upgrading of Cambodia by FATF is a very positive development.