Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - Cambodia's economy showed strong performance in 2024 with a real GDP growth of 6 percent, but growth is expected to moderate to 4.8 percent in 2025 due to external factors [11] - The General Department of Customs and Excise (GDCE) is focused on modernization to enhance customs revenue collection and support the government's economic reform agenda [12] - The GDCE's Customs Reform and Modernization Strategy (2024-2028) includes six primary objectives aimed at improving efficiency and compliance [12] Summary by Sections I. Introduction - Cambodia's economy is projected to grow at 4.8 percent in 2025, down from 6 percent in 2024, influenced by trade tensions and a border dispute with Thailand [11] - Inflation is expected to rise moderately to about 2.8 percent, while the GDCE aims to strengthen customs administration to safeguard trade competitiveness and revenue mobilization [11] II. FY2026 Priorities and Workplan - Revenue mobilization is a key priority, with the revenue to GDP ratio estimated at 15.9 percent in 2023, decreasing to 14.9 percent in 2024, 2025, and 2026 [15] - The GDCE plans to revise the Customs Law, which has not been updated since 2007, to align with international standards [16] - eCommerce is expanding, but customs procedures need alignment with World Customs Organization standards, requiring technical assistance for a comprehensive framework [17] - As of September 2025, Cambodia has 58 Special Economic Zones (SEZs), with 33 active, and the GDCE is reviewing the regulatory framework for better compliance [19] - Combating commercial fraud and trade-based money laundering (TBML) is a priority, necessitating specialized training for customs officers [20] - The current Post-Clearance Audit (PCA) manual is outdated and requires revision to improve audit consistency [21] - The GDCE is modernizing its IT systems, including the Automated System for Customs Data (ASYCUDA), with no external technical assistance required [22] - Capacity building is needed for Rules of Origin verification due to new Free Trade Agreement frameworks [23] - A mid-term review of the Customs Reform and Modernization Strategy is planned to assess progress and recalibrate priorities [24] III. Development Partner Cooperation - Development partners are crucial in supporting Cambodia's trade and customs modernization, with the ADB leading programs focused on revenue mobilization [29] - JICA is enhancing trade facilitation and human resource development, while the World Bank is evaluating health taxes under excise policy [29][30] - Strong coordination among development partners is emphasized to avoid duplication and maximize impact [30]