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UPDATE 1-U.S. imposes sanctions on state-owned Chinese firm over Cambodia project

15 Sep 2020 / 23:32 H.

    (Adds details of sanctions, Mnuchin quote, background)

    WASHINGTON, Sept 15 (Reuters) - The United States on Tuesday imposed sanctions on a Chinese state-owned company, accusing it of seizing land in Cambodia from local people for the construction of a development project that media reports have said could be used for military purposes.

    The U.S. Treasury Department said in a statement it blacklisted the Union Development Group Co Ltd over activities related to construction at the Dara Sakor resort, a project that has included the building of a runway capable of taking some of the world's biggest planes.

    The department said the Chinese government had used the company's projects in Cambodia to "advance ambitions to project power globally."

    It expressed concern that the Cambodian government spokesperson, Phay Siphan, had said that Dara Sakor could be converted to host military assets.

    "A permanent (Chinese) 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," the statement said.

    The sanctions were imposed under the Global Magnitsky Act, which allows the U.S. government to target human rights violators worldwide by freezing any U.S. assets and prohibiting Americans from doing business with them.

    The Treasury said projects funded by the company have "forced Cambodians from their land and devastated the environment, hurting the livelihoods of local communities."

    The Treasury also accused the company as falsely registering as a Cambodian-owned entity in order to receive land for the Dara Sakor project, before reverting back to Chinese-owned without repercussions.

    "The United States is committed to using the full range of its authorities to target these practices wherever they occur," Treasury Secretary Steven Mnuchin said in the statement. (Reporting by David Brunnstrom and Daphne Psaledakis; Editing by Steve Orlofsky and Richard Chang)

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