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Panama Papers Link Cambodians to Offshore Firms

  • Kimseng Men

FILE - A police officer stands guard outside the Mossack Fonseca law firm office in Panama City, April 12, 2016.

FILE - A police officer stands guard outside the Mossack Fonseca law firm office in Panama City, April 12, 2016.

Data released by the International Consortium of Investigative Journalists reveals offshore holdings of a number of prominent Cambodia-linked individuals.

ICIJ on May 9 added names to a database listing individuals and companies using offshore firms. Dubbed the Panama Papers, the massive trove of more than 11.5 million documents leaked from Panama-based Mossack Fonseca law firm already has tied high-level government officials around the world to various tax evasion schemes.

The latest data include 25 individuals related to Cambodia who hold shares in 26 different offshore companies.

Analysts say Cambodia’s lax regulatory environment and tax loopholes mean the scale of offshoring and its economic impact on the Southeast Asian country remain unknown. While wealthy individuals can avoid higher tax rates or scrutiny via offshore holdings, their nominal association with the leaked documents does not necessarily mean they have broken any laws.

Among individuals named is Cambodian Justice Minister Ang Vong Vathana, who is listed as holding $5,000 worth of shares in a company called RCD International. The now defunct enterprise, whose purpose remains unknown, was based in Hong Kong and involved other Cambodians and people with Chinese names. Vathana has denied his involvement with the company.

Other familiar Cambodian names found in the database include Lim Bunsour and Nang Sothy, both corporate executives and members of the Cambodian Chamber of Commerce, and Sreang Tito, owner of Internet service provider Mekong Net.

FILE - Men stand in front of the Royal Palace in Phnom Penh, Cambodia. Analysts say Cambodia’s lax regulatory environment and tax loopholes mean the scale of offshoring and its economic impact on the Southeast Asian country remain unknown.

FILE - Men stand in front of the Royal Palace in Phnom Penh, Cambodia. Analysts say Cambodia’s lax regulatory environment and tax loopholes mean the scale of offshoring and its economic impact on the Southeast Asian country remain unknown.

Several unknown individuals are listed. Long Virak is named as shareholder in five different companies, including Easy Flow Media Ltd., Solid Media Solutions Ltd., Ultra Media Entertainment Ltd., Speedquick Media Ltd. and Big Aim Ltd.

Leaked papers also reveal individuals with foreign names using Cambodian addresses for offshore holdings. These include Wong Swie Hwa, who partnered with Lim Sophany to invest in King Fortress Investments. Also named are OKUBO Alejandro Marcelo of Triumph Business Development Ltd.; Kwok Stanley Kar Kuen of Clever Leader Holdings; Chong Mei Sing of the De’ Cove Investments Ltd.; Dmitry S. Stepanov of the PMT Air Corp.; and Skaret Sindre of the Golden Luck Winner Ltd.

Chan Sophal, president of the Phnom Penh-based Center for Policy Studies, says it is impossible to say how much tax revenue Cambodia’s government may have lost to the offshore assets.

“But I don’t think it is in a big scale that can hinder our economy yet,” said Sophal. “I don’t think such a scheme can stop our economy prospering even further, either. It is probably still at a small scale.”

Cambodia does not have laws that require local investors to declare income made inside or outside of the country.

“We still have a loophole on this point,” said lawyer, Sok Samoeun, who is a founding director of the Phnom Penh-based Cambodian Defenders Project, one of the country's oldest humanitarian NGOs. “We only have tax on salary of employees and there is no provision on taxing employers’ income.”

This report was produced in collaboration with VOA's Khmer Service.​

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