Financial Crime World

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Financial Crime Risk Assessment Tools in Papua New Guinea

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Papua New Guinea (PNG) has been identified as a country with significant financial crime risks, including money laundering and terrorist financing. In an effort to combat these threats, the Financial Action Task Force (FATF) has developed a range of tools and guidance for governments and financial institutions to assess and mitigate these risks.

Mutual Evaluation

In 2024, the Asia-Pacific Group on Money Laundering (APG) conducted a mutual evaluation of PNG’s implementation of anti-money laundering and counter-terrorist financing (AML/CFT) measures. The report identified several areas of concern, including weaknesses in the country’s financial intelligence unit and its ability to trace and freeze assets.

Risk Assessment

The APG also conducted a risk assessment of PNG’s financial system, identifying several high-risk sectors, including:

  • Cash-intensive businesses such as real estate and construction
  • High-risk customers, including:
    • Politically exposed persons

The report recommended that the PNG government strengthen its AML/CFT regime to address these risks.

FATF Guidance

The FATF has developed a range of guidance documents for governments and financial institutions to help them assess and mitigate financial crime risks. These include:

  • Guidelines on money laundering and terrorist financing
  • Best practices for due diligence and customer identification

Implementation Challenges

Despite the challenges posed by implementing these tools and guidance, PNG has made significant progress in recent years. The country has established a financial intelligence unit and has implemented several AML/CFT regulations. However, further work is needed to address the weaknesses identified in the mutual evaluation report.

Conclusion

In conclusion, financial crime risk assessment tools are essential for governments and financial institutions to identify and mitigate risks in Papua New Guinea. While PNG has made progress in implementing these tools, further work is needed to address the challenges posed by money laundering and terrorist financing. By working together, governments, financial institutions, and civil society can help to ensure that PNG’s financial system is safe and secure for all.