Photo/Illutration Cambodia's Prime Minister Hun Sen participates in an ASEAN U.N. summit in Nonthaburi, Thailand, on Nov. 3. (AP file photo)

PHNOM PENH--The Cambodian government expressed “strong dismay" Tuesday over a U.S. Treasury decision to sanction two businessmen suspected of corruption and illegal logging.

A Foreign Ministry statement said the sanctions were based on groundless accusations.

“The Executive Order is an ambush against the ongoing efforts to restore trust and confidence between Cambodia and the United States,” the statement said.

It defended both of the influential businessmen and former officials targeted by the sanctions, which freeze their U.S.-based assets and ban doing business with them.

The ministry “expressed strong dismay over the arbitrary designation" of the Cambodian citizens. It said former Gen. Kun Kim had made a “great contribution” to the country's peace, stability and social order. Try Pheap has “played an active role in supporting Cambodia's socio-economic development,” it said.

The U.S. Treasury Department said it had designated Pheap and 11 companies owned or by controlled by him for sanctions for alleged graft and illegal logging. The companies engage in various businesses including tourism, real estate development and energy.

It said Pheap, who has been an adviser to Prime Minister Hun Sen, has built up a vast illegal logging network that purchases protection from government officials and the military and exports lumber to Vietnam, China, Russia and European countries.

Pheap has responded to past corruption allegations in Facebook postings saying his businesses are all legal and abide by the law.

The Treasury Department also designated Kim, three of his relatives and their family businesses for sanctions for allegedly engaging in corruption and illegal extraction of natural resources.

Kim is a longtime associate and supporter of Hun Sen and now is the senior minister for veterans' affairs. The businesses and people cited in the announcement also are involved in rubber plantations and financial and security services.

Treasury Secretary Stephen Mnuchin said the sanctions, announced Monday on International Corruption Day, targeted people and entities based in Latvia, Serbia, Venezuela, Hong Kong and Cambodia suspected of illicit activities that “undermine the foundations of stable, secure and functioning societies."

The human rights group Global Witness welcomed the Treasury Department's announcement, saying both Pheap and Kim are suspected of serious human rights and environmental abuses.

“As Hun Sen's supporters have accumulated more and more wealth and impunity, their incentive to help him cling to power has increased," Patrick Alley, director of Global Witness, said in a statement.

“Accountability for those sustaining the corrupt dictatorship that is oppressing Cambodians on a daily basis is long overdue," he said.

Hun Sen has been prime minister since 1985. Critics say he has kept his hold on power by rewarding cronies and family members and allowing them to plunder the country's forests and farmlands.

The Treasury statement cites a Chinese resort development project in Koh Kong, on the scenic southern coast, that involved land seizures carried out by armed soldiers.

In late 2017, Cambodia's Supreme Court ordered the main opposition party dissolved on the unsupported pretext that it conspired with the United States to overthrow Prime Minister Hun Sen's government. That move was seen as a government effort to ensure his ruling Cambodian People's Party won a July 2018 general election. It ended up sweeping all 125 National Assembly seats.

Because they considered the elections neither free nor fair, some Western nations applied diplomatic sanctions against Hun Sen's government.

The European Union is considering withdrawing preferential tariff privileges from Cambodia. That would be a blow to its economy, which is powered by garment exports.