Cambodia slams politically motivated US sanctions against tycoon

The US says forced fraud has become a “significant national security problem” in Southeast Asia. (Photo: AFP)

PHNOM PENH: Cambodia’s Foreign Ministry today expressed deep regret over the US decision to impose sanctions on a local tycoon and senator for alleged human trafficking, who is being forced to work in scam centres, calling the move politically motivated.

The US plan to impose sanctions, first reported yesterday by Reuters, comes at a delicate time in relations as Cambodia edges closer to Washington’s strategic rival China despite US efforts to woo its new leader Hun Manet, the son of former strongman Prime Minister Hun Sen.

The Foreign Ministry said in a statement that the “imposition of such unilateral sanctions undermines respect for international law and the basic norms governing interstate relations, in particular the principles of sovereign equality and non-interference.”

The targeted tycoon, Ly Yong Phat, was appointed in 2022 as a personal adviser to Hun Sen, who served as prime minister for nearly four decades and remains active in politics as Senate president.

The sanctions targeted his conglomerate LYP Group Co and a hotel, O-Smach Resort.

The U.S. Treasury Department’s Foreign Assets Control Division said it is also imposing sanctions on Cambodia-based Garden City Hotel, Koh Kong Resort and Phnom Penh Hotel because the hotels are owned or managed by Ly.

LYP Group did not immediately respond to a request for comment today.

Bradley Smith, the Treasury Department’s acting undersecretary for terrorism and financial intelligence, had said the action was taken to “hold accountable those involved in human trafficking and other abuses, while disrupting their ability to carry out investment fraud schemes that target countless unsuspecting individuals, including Americans.”

Cambodia and other Southeast Asian countries have become the epicenter of a multibillion-dollar criminal industry in recent years. The industry targets victims around the world with fraudulent cryptocurrencies and other schemes, often operating out of secure complexes run by Chinese syndicates where human trafficking takes place.

Jacob Sims, a Southeast Asia analyst specializing in transnational crime and human rights issues, said the sanctions sent a signal from the U.S. government that coercive fraud had become “a significant national security problem.”