Counterfeit U.S. Currency on the Rise in Cambodia

UNCLAS PHNOM PENH 000401

SENSITIVE
SIPDIS

STATE FOR EAP/MLS
BANGKOK FOR MICHAEL CARBONE

E.O. 12958: N/A
TAGS: EFIN ECON PGOV CB
SUBJECT: Counterfeit U.S. Currency on the Rise in Cambodia

SENSITIVE BUT UNCLASSIFIED


1. (SBU) Summary: The National Bank of Cambodia (NBC) reports a
significant increase of counterfeit U.S. currency circulating in
Cambodia. In recent months, the amount of fake bills forwarded to
the NBC by commercial banks has tripled compared to the total amount
received over the past decade. Post is working with the NBC to
develop guidelines for the confiscation and disposition of seized
counterfeit U.S. notes and collaborating with the U.S. Secret
Service in Bangkok to provide assistance in counterfeit detection
techniques. End Summary.


2. (SBU) During a meeting with econoff June 4, the Deputy Director
of the Issue Department of the National Bank of Cambodia (NBC),Ms.
Uch Sokhom, expressed her concerns about the rising number of
counterfeit U.S. notes forwarded to the NBC from commercial banks.
Since 1998, the NBC has instituted a policy of removing counterfeit
U.S. currency from circulation and has instructed all commercial
banks and microfinance lending institutions to confiscate suspect
counterfeit notes and forwarded them to the NBC for verification and
disposal. While she conceded that not all of the banks regularly
cooperate with NBC in confiscating fake notes, she stated that over
the course of the past ten years, the NBC has received approximately
USD 10,000 in counterfeit U.S. notes.


3. (SBU) According to Ms. Uch, counterfeit U.S. notes circulating in
Cambodia are on the rise. She explained that the amount of
counterfeit notes forwarded by two of Cambodia's top banks have
increased exponentially. In the past six months, Acleda bank has
provided over USD 10,000 in counterfeit notes, and the ANZ Royal
bank has forwarded over USD 20,000. She explained that of the USD
100 bills confiscated, those dated 2001 and 2003 are the most common
and many are "super bills." She said that fake USD 20 bills tend to
be dated 2006 and are of a poorer quality than the USD 100 bills,
primarily photocopies rather than printing.


4. (SBU) When econoff requested that the NBC forward to the Embassy
any seized counterfeit U.S. notes that are not being retained for
local prosecution or training purposes, she said that the NBC could
send a photocopy of the notes, but not the original. Given a
general lack of public trust in the integrity of Cambodian
officials, Ms. Uch explained that the bank must retain the original
seized notes. Customers from whom notes have been confiscated by
commercial banks and then forwarded to the NBC regularly descend
upon the NBC seeking to verify that the NBC has retained and is
storing their confiscated bill(s),suspecting that the bank is
collecting money for its own purposes. Only by showing him or her
the actual note will the aggrieved customer be satisfied that the
NBC is doing nothing untoward.


5. (SBU) Ms. Uch appealed for updated guidance on U.S. government
policy regarding the confiscation and disposition of seized
counterfeit U.S. currency. In particular, she sought a formal
letter from the U.S. Embassy requesting the NBC to confiscate
counterfeit notes, mark them as counterfeit, and remove them from
circulation. This letter, she explained, is necessary to convince
the less cooperative banks that the NBC has the "authority" to take
such action and encourage their compliance. She also requested USG
assistance in the event the NBC decides to dispose of the seized
notes. Post will provide the NBC with the requested updated
guidelines and seek the NBC's cooperation in forensic analysis of
the seized notes.


6. (SBU) Given the increase of counterfeit U.S. currency circulating
in Cambodia, the Embassy hosted a U.S. Secret Service-provided
training on security features of U.S. currency and counterfeit note
detection techniques for nearly 90 commercial bank staff and NBC
officials in April. Since then, the Embassy has received numerous
requests for additional such training from the Ministry of Foreign
Affairs, Cambodian National Police, the NBC, and the business
community (the hotel industry is particularly concerned). Post is
coordinating with the U.S. Secret Service in Bangkok for future
training opportunities, as well as exploring the possibility of
conducting a media campaign to educate the general public about
counterfeit U.S. notes.


RODLEY