Overview

The Law on Trusts promulgated on 2 January 2019 provides the legal framework for the creation, registration and inspection of trusts in Cambodia.
 
To facilitate the implementation of the Trust Law, the Trust Regulator on 3 November 2022 issued Prakas 051 on the Formalities and Procedure for Inspection of Trusts (“Prakas 051”). Prakas 051 applies to the inspection of activities and operations related to the trust sector in Cambodia.

Types and Scope of Inspection
 
Prakas 051 sets out two types of trust inspections: (1) inspections for promoting the implementation of the law, and (2) inspections for strengthening the implementation of the law.
 
Inspections for promoting the implementation of the law can be initiated by an instruction from the Director General of the Trust Regulator or by a pre-determined inspection plan of the Trust Regulator. This inspection is aimed to monitor compliance with applicable trust laws with the objectives to promote implementation of the laws by persons governed by conditions of the registered trust, operations of the trust operators and other related stakeholders in the trust sector.   
 
The second inspection, an inspection for strengthening the implementation of the law, is initiated by the Trust Inspector with the aims to monitor, examine, search and investigate activities or operation suspected of violating the Trust Law and/or applicable trust regulations.
 
In addition, the Trust Inspector may, on his own, open a preliminary investigation in certain circumstances such as when non-compliance with the Trust Law is suspected or there is a necessity to protect the interest of a registered trust.
 
It is important to note that the scope of inspection under this Prakas 051 is broad. It covers persons being under​ supervision of the trust operation, including holders of licenses/permits/registrations/recognition from the Trust Regulator and those who are suspected of violating the Trust Law and/or applicable trust regulations.

Power of the Trust Inspector
 
In conducting the investigation, Prakas 051 grants the Trust Inspector with numerous powers, including, among others:

• conducting on-site inspection at the premises of suspected persons (such as at the head office, place of business, document storage room, or residence) and confiscation of evidence (both soft and hard copies), requesting original documents (an any preservation of such document) and setting deadlines for the suspected person to furnish required documents;
   
• making voice and video recordings during the interview and investigation in accordance with the procedure of the applicable laws;
   
• summoning a suspected person;
   
• imposing conditions to ensure confidentiality of the case, and ordering the attestant to do or not to do certain acts;
   
• requesting support from the trustee, trustor, and beneficiary; and
   
• issuing public statements, publishing the name and offense of the offender, following approval from the Trust Regulator.

• from KHR 10,000,000 (approximately USD 2,500) to KHR 50,000,000 (approximately USD 12,500) for natural persons; or

• from KHR 20,000,000 (approximately USD 5,000) to KHR 200,000,000 (approximately USD 50,000) for legal persons.

• warnings;
• corrective directions;
• restriction on disposal, management and/or maintaining of trust property;
• suspension or dismissal of director, senior officer and/or the offender; and
• suspension or revocation of license/permit/registration/recognition.

The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.

Vansok Khem  
Partner & Deputy Head of Cambodia Corporate and Commercial Practice 
vansok.khem@dfdl.com