Experts caution that the absence of measures tackling the involvement of officials and networks in facilitating fraud could hinder the law’s impact.
Cambodia‘s first law targeting scam centres, passed following increased global pressure regarding the nation’s extensive fraud and human trafficking system, might not significantly reduce it unless officials and the networks that have sustained it for years are targeted, experts have cautioned.
Approved by the parliament on Friday, the law targets anindustryexpected to produce as much as US$19 billion each year and to have moved as many as 200,000 employees into facilities throughout the nation.
Interior Minister Keut Rith stated that the law would enhance the “cleaning campaign” happening throughout the nation and ensure that the centers do not reappear following enforcement actions.
“This law is as tight as a fishing net, aimed at preventing online fraud in Cambodia once and for all, and it is designed to protect the interests of the Cambodian nation and its people,” he said.
The upcoming legislation is set to be approved by Cambodia’s monarch prior to its implementation.
According to the law, individuals convicted of internet fraud can receive a prison sentence ranging from two to five years and be fined as much as $125,000.
Individuals found guilty of fraud committed by criminal groups or targeting numerous victims may face a maximum prison term of 10 years and fines as high as $250,000.
Additional penalties will be imposed on individuals found guilty of money laundering, collecting victims’ information, or recruiting fraudsters.
Earlier individuals have faced charges related to activities such as recruiting for exploitation, serious fraud, and financial laundering.
Jason Tower, a senior specialist with the Global Initiative Against Transnational Organized Crime, highlighted a major deficiency in the legislation: the absence of clear clauses addressing corruption, which has historically involved numerous officials and even influential senators.
He stated that these officials had facilitated and coordinated fraudulent activities within the nation.
“Without significant modifications in the supervision of officials responsible for enforcing the law, it’s improbable that enacting such a law will lead to substantial changes in practice,” stated Tower, who focuses on organized crime, security, and illegal economies in Southeast Asia.
Under the new legislation, penalties were minimal when compared to those in other nations, Tower noted, referencing Chinese law that imposes harsher consequences, including life imprisonment, for offenses exceeding 500,000 yuan (US$72,500).
In adjacent Laos and Thailand, there are regulations that stipulate life imprisonment for “serious economic offenses”.
The new law in Cambodia also did not specify the conditions under which courts can seize assets from individuals found guilty of committing cyber scams, or how these assets could be utilized, such as for compensating victims of fraud, Tower pointed out.
In the long run, another significant issue for Cambodia, as highlighted by Tower, is how effectively its judicial system can prosecute cases involving high-profile Chinese-connected individuals engaged in cyber fraud and associated offenses.
It was possible, he stated, that these high-ranking offenders might still be sent back to China, as seen in the case ofChen Zhi and Li Xiong.
The two men were extraditedearlier this year, due to their suspected positions of authority within a large international criminal organization engaged in global internet fraud and multi-billion-dollar financial concealment.
Two men who were born in China had previously acquired Cambodian citizenship, which the capital city of Phnom Penh rescinded prior to their extradition.
Jacob Sims, a visiting fellow at Harvard University’s Asia Centre who is studying the political economy of transnational crime in Southeast Asia, stated that in recent years, Cambodian authorities have regarded human-trafficking victims as criminals to showcase “prosecutorial effectiveness”.
“Although there is substantial evidence, the government has repeatedly not recognized victims of trafficking for what they are,” he stated.
These vulnerable people were compelled to labor at the base of “this profitable industry supported by the state,” he stated, while the actual offenders “benefit from the complete protection of the party-state and are therefore unlikely to encounter real consequences.”
Based in large, well-protected facilities, fraud centers in Cambodia have developed into a multi-billion-dollar illegal economy, with annual earnings ranging from $12.5 billion to $19 billion, making up approximately half of the nation’s official gross domestic product.
Approximately 100,000 to 200,000 individuals from over 50 nations have been trafficked into these facilities, enticed by false promises of well-paying jobs and subsequently forced into “cyber-slavery,” where they are made to perform frauds under the threat of physical harm and starvation.
Amid significant pressure from nations including China and the United States, Cambodia initiated a large-scale enforcement action, shutting down almost 200 facilities and deporting more than 11,000 workers by early 2026.
Sims stated that the law was unlikely to alter the fundamental factors and “represents yet another symbolic change.”
He mentioned that the main criticisms of Cambodia were not about the absence of laws, but rather the overall legal and wider institutional framework.
” This has been seized by secretive criminal entities with proven connections to the top ranks of the Cambodian People’s Party,” Sims stated.
Sophal Ear, an associate professor at Arizona State University’s Thunderbird School of Global Management, stated that the income generated by online fraud activities greatly surpasses the penalties or jail sentences specified in the law.
“Prevention will rely more on the likelihood of being caught and less on the harshness of punishments,” Ear stated.
The law’s success would also rely on consistent enforcement and whether it targeted the networks that support fraudulent activities, rather than just concentrating on those at the lower levels, Ear mentioned.
He pointed out that challenges involved collaboration between agencies, the ability to enforce regulations, and the necessity of confronting long-standing interests that may have gained from fraudulent activities.
Ear pointed out that the fraudulent economy went beyond a mere law enforcement concern, as it encompassed issues related to governance and economic transformation.
“It has become deeply rooted in specific local regions, and removing it leads to temporary economic hardship for those who were loosely connected to it,” he stated.
The issue of whether Cambodia can maintain an effective reform initiative while handling local economic consequences and rebuilding investor and visitor trust remains a long-term concern.
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This piece was first published in the South China Morning Post (www.scmp.com), a top news outlet covering China and Asia.
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