An order arrives at a bank in Cambodia. It tells the bank to hand over information about a customer’s account, or to stop the customer taking money out of it. The bank is to examine the order and act on it directly. It does not have to seek confirmation from the National Bank of Cambodia, the central bank that licenses and supervises the country’s banks.
That is what a two-page guideline circular signed on 10 August tells every banking and financial institution in the country. A guideline circular tells banks how to behave. It is not itself a court order. This one took effect the day it was signed.
Its title covers three things: giving out information about a customer’s account, holding or freezing one, and lifting a hold or a freeze again. The orders and requests come from a competent institution, meaning a court or other authority with power to issue one. Lifting a freeze takes such an order or request too, arriving by the same route as the one that imposed it. The circular says nothing about telling the account holder, and nothing about how long a freeze runs.
The circular does not create the power to order a freeze. It deals with what a bank does once an order has already reached it. It also says the National Bank has no competence to interpret a competent institution’s measures, or to explain them further.
In law it points to one place, Article 47, paragraphs 1 and 3, of the Law on Banking and Financial Institutions. Article 47 sits in the chapter headed Professional Secrecy. Its first paragraph bars anyone running, auditing or working in a bank from passing on confidential information about accounts. Its third paragraph sets out who cannot be refused that information on secrecy grounds: the supervisory authority, auditors, provisional administrators, liquidators, and a court dealing with criminal proceedings.
Which law lets a competent institution freeze an account in the first place is not settled by the circular. Nor is it settled by the six articles this desk read on 2 September. Article 46 covers what a bank’s outside auditors report to the supervisor. Article 48 opens a chapter on lending to related parties. Three more come from the Code of Criminal Procedure. Article 121 makes a judicial investigation confidential. Article 122 makes one compulsory for a serious offence and optional for a lesser one. Article 124 says an investigating judge can do nothing until the prosecutor has opened the case.
One order of that kind has become public since. On the morning of 2 September, Kiripost reported that the Phnom Penh Municipal Court had frozen two bank accounts and properties said to belong to a shareholder of Chief (Cambodia) Commercial Bank. Nothing on the record ties that order to the circular.
The article, by Prak Chan Thul, is the only account of the order this desk found. Searches in English back to 20 August and in Khmer back to 25 August turned up no second one. No copy of the order was in those searches. The court’s own channel was not among the ones read.
What the two accounts hold, which bank holds them, and what the properties are stay off the record. So do the day the court made the order and the day the freeze took effect. Nothing dates the transaction the parties describe, and nothing dates any court document reaching the central bank.
Lim Aun is chief executive of Chief (Cambodia) Commercial Bank. He told that reporter the shareholder was not a party to the sale and purchase agreement and had no obligations under it. Sok Chan, who handles strategic communications at the Association of Banks in Cambodia, told him the order secures a seller’s outstanding claim for money, and does not order the bank’s operations suspended or frozen.
The association is the banks’ own industry body, not a regulator, and neither a party to the case nor the court that issued it.
Y Rin, a spokesman for the Phnom Penh Municipal Court, told the same reporter the case is at the stage of an investigating judge. The Code of Criminal Procedure sets out what that office is. Nothing on the record says whether the measure against the shareholder is civil or criminal.
Page 2 of the circular tells every bank to keep the order or request, its own answer to it, and whatever it handed over. All of it goes to the National Bank of Cambodia when the central bank asks. The account published on 2 September carries the bank’s duty to act and the National Bank’s disclaimer of competence. It leaves out three things: the duty to keep and hand over the file, the line saying a bank need not check back, and the lifting of a freeze.