The Treasury Department said it was freezing any US assets and criminalizing transactions with senior defense ministry official Chau Phirun and naval commander Tea Vinh over the Ream Naval Base.

The two and other Cambodian officials allegedly conspired to inflate costs at the base on the Gulf of Thailand and take the proceeds, the Treasury Department said.

"The United States will not stand by while corrupt officials personally benefit at the expense of the Cambodian people," Andrea Gacki, who is in charge of sanctions at the Treasury Department, said in a statement.

Cambodia, whose longtime leader Hun Sen is one of China's closest partners in Asia, has been dismantling facilities at the Ream base that were built partly with US money and played host to US exercises.

On a visit to Cambodia in June, Deputy Secretary of State Wendy Sherman voiced "serious concerns" about China's presence at the base and sought clarification on the demolition of two US-funded buildings.

She said that a Chinese military base in Cambodia "would undermine its sovereignty, threaten regional security and negatively impact US-Cambodia relations."

Satellite imagery taken in August showed that the construction of two new buildings, likely indicating that China is pushing ahead on a new agreement, according to the Asia Maritime Transparency Initiative at the Center for Strategic and International Studies in Washington.

Cambodia's Defense Minister Tea Banh last year told AFP that his country "has the right to seek aid from anyone who wants to help Cambodia's development" and had no obligation to inform Washington.

China has been increasingly exerting territorial claims in the South China Sea and East China Sea, drawing tensions with numerous Asian nations, but Cambodia has increasingly appeared to be an ally.

In a statement this week for Cambodia's National Day, Secretary of State Antony Blinken voiced hope for a "more prosperous, democratic and independent future" in the country ruled by Hun Sen for nearly four decades.