U.S. issues Cambodia corruption advisory, sanctions officials over navy base

By Daphne Psaledakis and David Lawder

WASHINGTON (Reuters) -The United States stepped up its campaign against corruption in Cambodia on Wednesday, issuing an advisory to U.S. businesses and blacklisting two government officials accused of scheming to profit from construction work at Cambodia’s biggest naval base.

The U.S. State Department, Treasury and Commerce Department jointly issued the advisory for firms doing business in Cambodia “to be mindful of interactions with entities in corrupt business practices, criminal activities and human rights abuses.”

Such risks include dealings in the financial, real estate, casino and infrastructure sectors, as well as with entities involved in trafficking people, wildlife and narcotics and related risks in timber and manufacturing, State Department spokesperson Ned Price said in a statement.

The U.S. Trade Representative’s office would review Cambodia’s trade benefits under the Generalized System of Preferences for developing countries once Congress reauthorized that program, which expired in 2020, he added.

Earlier on Wednesday, the Treasury slapped sanctions on Cambodia’s navy commander, Tea Vinh, and on Chau Phirun, the director-general of the Defense Ministry’s Material and Technical Services Department, accusing the two of planning to share funds skimmed from the Ream naval base project.

The base in the Gulf of Thailand has drawn concern from Washington over China’s growing military presence there.

The sanctions freeze their U.S. assets and generally bar Americans from dealing with them. The U.S. State Department on Wednesday also barred the officials and several of their family members from traveling to the United States.

“The United States will not stand by while corrupt officials personally benefit at the expense of the Cambodian people,” Andrea Gacki, director of the Treasury’s Office of Foreign Assets Control, said in the statement.

Cambodia’s foreign and defense ministries did not immediately respond to a request for comment.

A year ago, Cambodia said it had razed a U.S.-funded facility at the Ream naval base to allow for further expansion. The United States said Cambodia had a year earlier turned down its offer to repair the base.

The United States last month accused Cambodia of lacking transparency about Chinese construction activities at the base, and urged the government to disclose to its people the full scope of Beijing’s military involvement.

The Treasury and State Department statements on Wednesday did not mention China’s involvement with the base.

Cambodia has moved closer to China to become one of its most important allies in Southeast Asia, at a time when Washington is seeking to counter Beijing’s growing influence in the region.

(Reporting by Daphne Psaledakis and David Lawder in Washington; Additional reporting by Prak Chan Thul in Phnom Penh; Editing by Matthew Lewis and Stephen Coates)