NagaCorp Ltd ("NagaCorp or the “Company”") appointed JB Advisory Services Ltd. ("JBAS"), an independent security and risk management consultancy with working knowledge of and extensive experience in anti-money laundering ("AML") and Risk management. It was founded by a twenty-year veteran of the industry in 2020. JBAS notes that the business of NagaCorp has recovered from the impediments of COVID-19 and all restrictions were removed through 2023. In 2024, despite some lingering impact on air travel, Cambodia saw a return to tourist levels close to those before the pandemic.

Given the ongoing restrictions, the independent reviews of the internal controls of NagaCorp with a focus on AML until the end of 2021 were conducted remotely but given the gradual relaxation of restrictions and their eventual full removal JBAS has been able to conduct reviews on site in Phnom Penh since July 2022. The site visit for the current review took place between 2 January and 4 January 2025.

In 2022, JBAS participated in the on-site inspection by the Cambodia Financial Intelligence Unit (“CAFIU”) which commenced on 27 June. This was the first on-site review of the operations of NagaCorp by CAFIU and JBAS briefed them on our involvement in providing twice yearly reviews of NagaCorp’s AML controls details of which are enclosed in its annual report. The CAFIU inspection took place over several days. The comprehensive review took place over a further number of days with further clarification exchanges after the actual visit. As part of this outreach by CAFIU there were two AML training sessions conducted by CAFIU and attended by staff of NagaCorp compliance department on 19 September and 6 October 2022.

Following on from the inspection, CAFIU issued a draft report, including recommendations for actions to be taken by the Company. NagaCorp reviewed the draft report and provided responses to each recommendation.

On 20 October 2023, the Commercial Gambling Management Commission (“CGMC”) and CAFIU jointly supervised and assessed NagaWorld to ensure its compliance with the Law on Anti-Money Laundering and Combating the Financing of Terrorism (“AML/CFT”) and Law on Combating the Financing of Proliferation of Weapons of Mass Destruction (“CPF”). The CGMC minutes of 20 October 2023, recognised that NagaWorld had fully complied with various obligations, such as appointing a Compliance Officer (approved by CAFIU), providing training for frontline employees and sufficient document references.

Following on from the assessment, on 29 May 2024, CAFIU organised a refresher training workshop focused on “the International Standards, the Law and Regulation on Anti-Money laundering and Combating the Financing of Terrorism”. Two further training sessions were held in November and December 2024. The increased regulation and oversight of casino gaming in Cambodia is recognized by JBAS as enhancing the external AML environment alongside the continued diligent application of internal controls by NagaCorp.

In summary, JBAS assesses that neither the pandemic nor the enforced closure of the gaming operations negatively impacted the AML controls applied by NagaCorp and since the reopening all AML controls remain firmly enforced.

JBAS conducted a thorough review of all documentation and examined records created by NagaCorp throughout 2024. As has been the case since 2019, our principal points of contact were Director of Compliance, Mr. Jason Ooi who joined the Company in May 2019 and Mahendran Supramaniam who has long term experience in AML controls supervision in NagaCorp. In addition, regular contact was maintained with NagaCorp staff both in Hong Kong and Phnom Penh throughout 2024 alongside external consultation on the progress of AML controls in Cambodia.

In August 2020, to further enhance NagaCorp’s compliance in areas of Know Your Customer, Customer Due Diligence, Enhanced Due Diligence, Politically Exposed Persons and Transaction Monitoring, a long-term agreement was signed with LexisNexis as the preferred vendor. JBAS assesses that this further strengthens the robust due diligence applied by NagaCorp at NagaWorld.

JBAS verifies that NagaCorp continues to operate in accordance with all laws and regulations. The Company purely targets customers visiting the Company’s two Phnom Penh properties and AML controls are stringently applied considerably beyond the industry norm in any other jurisdiction.

NagaCorp continues to apply the controls required in the AML Manual which was produced by NagaCorp in the first half of 2014 to reflect the requirements of both the Cambodian 2010 AML Prakas and the updated 2012 FATF Recommendations.

During the review process JBAS regularly reviews records on the ongoing AML training of relevant NagaCorp staff. In 2024, a total of 2,230 operations staff underwent refresher training, and 320 new staff undertook the New Employee Induction Program (“NEIP”). JBAS notes that refresher training for existing staff has been conducted via an e-learning platform since April 2023 and NEIP is conducted in person by members of the compliance department. This ongoing process is recognized by JBAS as providing substantial understanding of AML issues at all levels of NagaCorp.

NagaCorp, as of December 2024, had a total of eight CAMS (Certified Anti-Money Laundering Specialists) trained personnel including senior staff in Compliance, Finance, Internal Audit and Casino Operations.

Director of Compliance, Mr. Jason Ooi has significant relevant experience having most recently been employed in similar roles at two of the major gaming operators in Macau and now has significant experience in NagaCorp’s operations in Cambodia. He and Mr. Mahendran Supramaniam, the Head of Internal Audit are regular points of contact during reviews, and they ensure that NagaCorp is fully compliant with all AML regulations.

JBAS also conducted interviews with management as well as maintaining regular communication with Timothy McNally, the non-executive Chairman of NagaCorp and Chairman of the AML Oversight Committee.

JBAS recognizes the continued significant emphasis placed on AML controls by NagaCorp. There has been no deterioration whatsoever in the diligence applied in the adherence to all laws and regulations concerning AML in NagaCorp. Discussions with Mr. Jason Ooi and Mr. Mahendran Supramaniam focused on the comprehensive nature of record keeping and on the interaction with CAFIU. The role of the NagaCorp Compliance Officer has been further defined in conversations with CAFIU which has itself further defined its internal roles in 2020.

Since the reopening of casino operations after pandemic enforced closure, Cash Transaction Reports and Suspicious Transaction Reports continue to be submitted online to the CAFIU. As of the end of January 2023, Suspicious Incidence Reports (“SIRs”) are no longer issued concerning small amounts of copy notes. These occurrences were always around small amounts, usually one or two hundred US Dollars and copy notes, in particular, are commonplace but readily detectable. JBAS agrees that the SIRs are not needed for this issue as it has no AML relevance.

The AML Oversight Committee met three times in 2024, on 19 February, 27 August and 26 November. The review team is satisfied NagaWorld maintains full control of the gaming operations and these operations remain compliant with all relevant FATF recommendations. As previously mentioned, JBAS maintains regular contact with Timothy McNally, the Chairman of the AML Oversight Committee.

JBAS also notes that there has been some reinforcing of the 2007 AML Law through the issuing of further Prakas which clarify certain identifiers and increase the sanctions for breaches of AML law or indeed, breaching of any of the confidentiality conditions and reporting requirements.

JBAS recognizes that NagaWorld remains at the forefront of implementing AML controls in Cambodia and we also note that NagaCorp is committed to full compliance with all national and international laws and regulations on AML. Sources within the National Bank of Cambodia and external sources consulted by JBAS acknowledge that NagaWorld remains at the forefront of AML compliance efforts in Cambodia.

The review team found NagaWorld to be fully compliant with all relevant Financial Action Task Force (“FATF”) recommendations and noted that the 2017 Mutual Evaluation Report on Cambodia of the APG and the 3rd Follow-Up Report in July 2021 were positive developments. The 6th Follow-Up Report, issued in October 2023, acknowledged further progress by Cambodia in addressing technical issues. There have been no further updates in 2024.

Alongside review of internal controls, JBAS regularly consults with sources in the international banking and finance industries as well as recognized compliance experts to assess the situation in Cambodia as a whole and, in particular, to understand whether there had been any significant developments or areas of concern during 2024. There has been no change in their assessments of Cambodia’s AML controls.

In October 2023, the APG issued its 6th Follow-Up Report on the 2017 Mutual Evaluation of Cambodia Report (“MER”). The summary statement from the APG report stated the following:

“Overall, Cambodia has made some progress in addressing the technical compliance deficiencies identified in its MER and has been re-rated to Largely Compliant on Recommendation 7.” This steady improvement is recognised by JBAS as further strengthening the external AML environment.

On 12 January 2023 NagaCorp attended a meeting with the Asia/Pacific Group (“APG”) on International Co-operation Review Group-Joint Group (“ICRG-JG”) in Phnom Penh as part of an updated review by the APG. JBAS Managing Director attended as the independent assessor of the Company’s AML controls. This meeting was one of a number held by the ICRG-JG with the private sector in Cambodia. At the annual meeting of the FATF on 24 February 2023 it was announced that Cambodia has been removed from the global money-laundering and terrorist-funding watchdog’s “grey list” after working to reduce money laundering, terrorism financing, and proliferation financing in the country.

According to the meeting report posted on the FATF website, Cambodia has made considerable progress in improving its anti-money laundering/counter-terrorism financing (AML/CFT) measures and increasing their effectiveness in order to meet the commitments in its action plan regarding the strategic deficiencies identified by the FATF in February 2019.

“As a result, Cambodia is no longer subject to the FATF’s heightened monitoring process,” the taskforce stated. “Cambodia should continue to work closely with APG to sustain its AML/CFT system advancements.”

This removal is a significant recognition of the improvements made in the external country AML environment in Cambodia.

JBAS notes that, in November 2020, the new gaming law (“Law On The Management Of Commercial Gambling”) was passed. The law will add strength to the compliance regime in Cambodia and is welcomed by analysts as providing legal and financial certainty around compliance and taxation.

JBAS reviewed the law for relevance to the AML controls applied by NagaCorp and to understand any related compliance issues that it might raise. Where money laundering is specifically mentioned in Articles of the Law, JBAS assessed the compliance of NagaCorp and is satisfied that NagaCorp is compliant.

An area that was addressed by the AML law was threshold reporting levels for gaming operators. On 10 November 2020, the Cambodia Financial Intelligence Unit instructed that this level be Twelve Million Riels. On 1 December 2020, NagaCorp therefore restored the three thousand US Dollar threshold, equivalent to the Riel limit, having previously raised this to USD five thousand.

The ongoing diligence of NagaCorp in applying its AML controls and the improving external environment further enhance the overall compliance environment and JBAS assesses that NagaCorp remains at the forefront of AML compliance both within Cambodia and within the global gaming industry.