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U.S. Sanctions Malign Chinese Investment in Cambodia
The United States is targeting the corrupt investment practices used by the People’s Republic of China to exploit the natural resources of nations around the globe, including in Cambodia.
The U.S. Treasury Department’s Office of Foreign Assets Control, or OFAC, designated the Chinese state-owned entity, Union Development Group, or UDG, for seizure and demolition of local Cambodians’ land for the construction of the Dara Sakor development project. UDG was sanctioned pursuant to Executive Order 13818, which builds on and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption, and their supporters.
Part of the land granted to UDG extends into Botum Sakor National Park, a protected natural area that can only be handed over by Cambodian royal decree. In order to acquire the land, UDG registered itself as a Cambodian-owned company, headed by a Cambodian national, but within three years of receiving the land, UDG switched back to being a Chinese-owned and operated company without any repercussion.
The People’s Republic of China has used UDG’s projects in Cambodia to advance its global ambitions. UDG-funded activities have forced Cambodians from their land and devastated the environment, hurting the livelihoods of local communities, all under the guise of converting Cambodia into a regional logistics hub and tourist destination. As is too often the case with Beijing’s One Belt One Road so-called development initiative, these activities have disproportionately benefitted the PRC, at the expense of the Cambodian people.
In conjunction with a former Cambodian Army official Kun Kim, the Cambodian military cleared land for the Dara Sakor project by forceful means. Kim was instrumental in the UDG development and reaped significant financial benefit from his relationships with UDG. Cambodia’s Council of Ministers ordered UDG to stop destroying villagers’ property, but UDG ignored the directive and continued the destruction. Kim was previously designated by the U.S. for his role in corruption under the Global Magnitsky sanctions program in December 2019.
The United States will continue to take steps to deter the PRC’s exploitative investments in Cambodia and elsewhere and to stand with its partners and allies in Southeast Asia.