Financial Crime World

PNG’s AML/CFT Legislation Strengthened with ADB’s Technical Assistance

Introduction

The Asian Development Bank (ADB) has successfully completed a technical assistance project to strengthen Papua New Guinea’s (PNG) anti-money laundering and combating the financing of terrorism (AML/CFT) legislation. The project aimed to address PNG’s AML/CFT deficiencies by drafting new legislation, aligning with global and regional standards.

Project Objectives

The project was implemented from 2014 to 2015, with the objective of assisting PNG in addressing its AML/CFT deficiencies through legislative drafting. The Terms of Reference (TOR) provided guidance for consultants on undertaking tasks and outlined technical approaches to be followed.

Key Activities

  • Officials from the Department of Justice and Attorney General (DJAG) worked closely with the Australian Government’s anti-money laundering technical assistance team.
  • Consultations were held with key agencies responsible for implementing the legislation, including the Bank of PNG, Police and Customs Departments, and courts.
  • A consultant was hired to complete all required legislative drafting within a stipulated timeframe.
  • The outputs included:
    • Preparation of the AML/CFT Act
    • Proceeds of Crime Act (asset confiscation)
    • Criminal Code Amendment Bill
    • Financial Sanctions Bill
    • Cash Courier Draft Bill

Outcomes and Achievements

  • The project achieved all expected outputs, meeting its timelines and milestones.
  • The consultant liaised effectively across various stakeholders to complete the outputs.
  • The draft bills were approved by Parliament on July 30, 2015, and published in the gazette on February 4, 2016.
  • PNG was successfully removed from the Financial Action Task Force (FATF) “grey-list” at its plenary meeting in Busan held from June 22-24, 2016.

Sustainability

  • The project has established a cadre of “experts” within DJAG who have comprehensive knowledge of regulatory policy and laws.
  • PNG has established the Financial Analysis and Supervision Unit (FASU) at the Bank of PNG, which acts as a secretariat for monitoring and enforcing rules on AML/CFT.
  • FASU is actively increasing its global network with similar organizations, contributing to the sustainability of the project’s outcomes.

Conclusion

The project was highly successful in addressing PNG’s AML/CFT deficiencies, aligning with the ADB’s Midterm Review of Strategy 2020, Financial Operations Plan, and Pacific Approach. The project achieved significant outputs within a short timeframe, demonstrating the effectiveness of preparatory work done by DJAG prior to consultant mobilization, effective coordination between ADB, DJAG, and Australian assistance, and a relatively small amount of financial resources producing significant outcomes.