Media Statement
Co-chairs, National Coordinating Committee on AML/CTF/CPF
BACKGROUND
The Financial Action Task Force (FATF) is an intergovernmental body responsible for setting international standards on anti-money laundering, counter-terrorism financing, and counter-proliferation financing of weapons of mass destruction (AML/CTF). The FATF sets standards for combatting AML/CTF that it expects all countries to meet, including Papua New Guinea.
Papua New Guinea joined the Asia Pacific Group on Money Laundering (APG) in 2008. APG is the regional body for the FATF. As a member of the APG, PNG is obliged to implement the FATF international standards.
In 2010, PNG underwent its first mutual evaluation, an assessment of its technical compliance with the FATF standards. The 2010 evaluation revealed significant deficiencies in this area. In 2014, due to significant and continuing technical deficiencies, PNG was placed on the list of jurisdictions under increased monitoring (commonly referred to as the ‘grey list’).
PNG responded to the grey-listing by undertaking the following reforms:
- establishment of the National Coordinating Committee (NCC) on AML/CTF;
- enactment of 5 suites of AML/CTF laws;
- establishment and operationalising the Financial Analysis and Supervision Unit (FASU) as the Financial Intelligence Unit (FIU) within the Bank of Papua New Guinea; and
- establishment of the Sanctions Secretariat within the Department of Prime Minister and National Executive Council.
The above achievements were key in FATF de-listing PNG from the grey list in February 2016.
RECENT MUTUAL EVALUATION & FINDINGS
Papua New Guinea recently underwent a Mutual Evaluation by the Financial Action Task Force (FATF), which identified significant shortcomings in both the effectiveness and technical compliance of our anti-money laundering (AML) measures. The evaluation highlighted that while our legislative framework, including the AML/CTF Act and Proceeds of Crime laws, is robust on paper, our main challenges remain effective coordination among government agencies, successful prosecution of financial crimes, and recovery of illicit assets.
PNG is currently in a 12-month Observation Period which ends in October 2025. During this time, PNG has the opportunity to show significant progress in responding to recommended actions from the mutual evaluation. Only sustained and rapid action from our responsible agencies would put PNG in a position to avoid the grey list completely.
However, due to the significant steps that PNG needs to take to meet the FATF standards and demonstrate the effectiveness of its efforts, it is expected that PNG will be grey listed. The work required to avoid the grey list entirely is unlikely to be completed within the 12-month period—instead, we must focus on ensuring our time spent on the grey list is minimal.
In response to these findings, the government swiftly formed the National Coordination Committee (NCC), comprising representatives from all relevant government agencies. Over recent months, the NCC has been actively working to enhance coordination, improve collaboration, and strengthen our enforcement capabilities. Our goal is to comprehensively address the deficiencies identified by the FATF.
We acknowledge the critical role of PNG’s commercial banking sector in maintaining high international standards of AML compliance. Commercial banks have demonstrated their commitment to adhering strictly to international regulations, which is vital for preserving their correspondent banking relationships and ensuring continued access to global financial networks.
However, banking compliance alone is insufficient for a robust AML framework. Enforcement remains a critical challenge, particularly concerning the low rate of successful prosecutions and minimal asset recovery. It is essential for our law enforcement agencies to be adequately resourced to effectively tackle corruption and financial crimes.
Encouragingly, our Independent Commission Against Corruption (ICAC) is now fully operational and actively collaborating with the Financial Analysis and Supervision Unit (FASU) to uncover illicit activities often concealed through complex corporate structures. We are determined to dismantle these networks and hold perpetrators accountable.
Furthermore, effective international cooperation is crucial for recovering assets transferred overseas. We are committed to demonstrating tangible cooperation with international financial intelligence units to trace, recover, and repatriate stolen assets.
Addressing these issues promptly is essential. Failure to act swiftly would significantly increase the risk of PNG being placed on the grey list, a designation we are working to avoid. The NCC remains dedicated to taking decisive action, coordinating across agencies, and ensuring that Papua New Guinea strengthens its AML approach to meet international standards.
We appreciate the ongoing support from government agencies, the financial community, and international partners as we undertake these essential reforms.
WHAT GREY-LISTING MEANS AND WHY IT MATTERS
If Papua New Guinea is placed on the grey list by the Financial Action Task Force (FATF), it could seriously affect our economy. Being grey-listed means the country is seen as not doing enough to prevent financial crimes like money laundering.
This could reduce investor confidence and make it harder for PNG businesses and individuals to send or receive money overseas. Even simple services like using Western Union could be limited.
If grey-listed, PNG would be given a list of actions it must take to improve. The government would need to regularly report progress to the FATF, and the international community would expect clear and fast improvements.
Minimising the impact of our potential grey listing will take sustained effort from all responsible agencies —not only in the lead up to, but also beyond, October 2025. Commitment to reform will demonstrate our determination to change, strengthening our systems and minimising the remaining steps necessary for a swift removal from the grey list.
These reforms must also be enduring. The changes made through this process will chart a path for PNG towards a more resilient financial future built on investor confidence and improved governance.
WHAT IS PNG DOING ABOUT IT?
Below are the actions PNG has and is undertaking from November 2024 to date:
- Development and endorsement of AML/CTF Strategic Implementation Plan 2024-2025 (SIP): The SIP document outlines actions to address the gaps identified in the recent Mutual Evaluation. There are a total of 73 action items. The SIP also identifies relevant implementing agencies and timeframes. The National Executive Council endorsed this document in March 2025;
- Establishment of two ICAC-led mechanisms: The Independent Commission Against Corruption (ICAC) led establishment of the Anti-Money Laundering Joint Task Force (AMLJTF) and Asset Recovery and Money Laundering Operations Committee (ARMLOC). These mechanisms aim to enhance inter-agency cooperation and fast-track the investigation, prosecution, and litigation of financially motivated crimes and asset recovery.
- Regulatory and supervision reforms: Enhance the supervision and regulation of Financial Institutions (FI) and Designated Non-Financial Businesses and Professions (DNFBPs) by developing a risk rating tool to ensure a risk-based supervision approach is undertaken to focus on the DNFBP sector, rolling outreach activities to reporting entities and actively assisting fit and proper assessment and controls are in place, including onsite and offsite supervision and enforcement actions, registration of reporting entities, developing typologies, strategic analysis reports and proactively disseminating financial intelligences to law enforcement agencies domestically and internationally;
- Law reforms: The Department of Justice and Attorney General (DJAG) is prioritising law reforms to address legislative gaps identified in the MER. This includes reforms to various legislation identified in the MER as needing reform. Further, DJAG will assist agencies with reforms to laws within their mandate;
- Donor assistance: PNG acknowledges that the donor partners are providing technical assistance to PNG agencies in implementing the SIP. The donor partners include the Australian Government, United Nations Office on Drugs and Crime, Asian Development Bank, and others;
- On-boarding of two government agencies in AML/CTF work: ICAC and Auditor-General’s Office (AGO) are new additions to the NCC on AML/CTF, which now has 23 member agencies; and
- Ongoing monitoring of SIP: The Bank of PNG, through the FASU and DJAG, are jointly monitoring the implementation of the SIP. To date, most agencies have made progress in implementing the SIP actions. Unfortunately, actions like investigation and prosecution will take time, including asset recovery, confiscation and forfeitures.
THE WAY FORWARD: PNG TAKING DECISIVE STEPS FOR A SAFER, STRONGER ECONOMY
Papua New Guinea is taking serious and positive action to strengthen its financial systems and protect our economy. Through the National Coordinating Committee (NCC), we are actively working on the Strategic Improvement Plan (SIP) to fight financial crime and make our systems more secure and transparent.
We’re focusing on better coordination among our law enforcement and government agencies to investigate and prosecute crimes like money laundering—and to recover stolen assets. At the same time, we’re updating our laws to meet international standards and address the gaps identified in our recent review.
The Financial Analysis and Supervision Unit (FASU) and the Department of Justice and Attorney General (DJAG) are closely monitoring our progress and will continue to keep the government, people of PNG, and our international partners informed.
The NCC is also working closely with donor partners to make sure the SIP is implemented effectively. We will continue to issue monthly updates in the lead up to the October APG session.
WORKING TOGETHER FOR A SECURE PNG FINANCIAL SYSTEM
We thank the Government for endorsing the Strategic Improvement Plan and supporting the work of the NCC on anti-money laundering and counter-terrorism financing (AML/CTF). We also acknowledge the valuable technical support of our international partners.
To succeed, we need continued leadership from government ministers, especially those involved in law enforcement, and full cooperation from all relevant agencies.
We also call on the private sector—especially financial institutions and designated non-financial businesses and professions (DNFBPs)—to actively participate in these efforts.
By showing the world that PNG is serious about tackling financial crime, we can build investor confidence, attract foreign investment, and support long-term economic growth and prosperity for all Papua New Guineans.
| Ms. Elizabeth Genia Governor, BPNG & NCC Co-Chair | Dr. Eric Kwa, PhD Secretary, DJAG & NCC Co-Chair |