US sanctions Chinese resort firm in Cambodia

The US Treasury Department fears land seized by the company will be put to use for military purposes.

Cambodia.- The US Treasury Department has sanctioned a Chinese state-owned resort and tourism complex developer in Cambodia, claiming that it has seized land under false pretences in order to turn it into a base for military purposes.  

Amid an escalating trade war between Beijing and Washington, the US government has blacklisted Union Development Group (UDG), over the seizure and demolition of Cambodians’ property for the construction of the Dara Sakor development project.

In a release, the Treasury Department said the company has enlisted Kun Kim (Kim), a senior Cambodian general previously signalled by the authorities for involvement in corruption activities.  

UDG is a firm that in 2008 was granted a 99-year lease with the Cambodian government for 36,000 hectares in the Koh Kong province, which was to be destined for the development of a $3.8 billion tourism resort project called Dara Sakor.  

But the US accuses UDG of having forced Cambodians off their land and devastated the environment, damaging the livelihoods of local communities under the guise of converting Cambodia into a regional logistics hub and tourist destination.  

The Treasury Department said in a release: “As is too often the case with Beijing’s One Belt One Road initiative, these activities have disproportionately benefitted the PRC, at the expense of the Cambodian people.”  

The department fears the huge Dara Sakor project, which includes a casino, hotels, and deep water seaport along the bay area, will also include a large runway able to receive some of the world’s biggest planes.  

The US claims that in order to seize land which extends into Botum Sakor National Park, a protected natural area that can only be handed over by royal decree, UDG registered itself as a Cambodian-owned company, headed by a Cambodian national.

It says that within three years of receiving the land, UDG switched back to being a Chinese-owned and operated company without repercussion.    

A Cambodian government spokesperson, Phay Siphan, has mentioned to local media that Dara Sakor could be converted to host military assets.  

The US Treasury Department said: “A permanent PRC military presence in Cambodia could threaten regional stability and undermine the prospects for the peaceful settlement of disputes, the promotion of maritime safety and security, and the freedom of navigation and overflight.” 

Sanctions have been imposed under the Global Magnitsky Act, which allows the US government to target human rights violators worldwide by freezing any US assets they may hold and prohibiting them from conducting business with US citizens, effectively cutting them off from the US financial system.