Financial Crime World

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FATF Recommends Strengthening AML/CFT Framework in Papua New Guinea

The Financial Action Task Force (FATF) has released its Benin Follow-Up Report for 2023, highlighting key recommendations to improve Papua New Guinea’s anti-money laundering and combating the financing of terrorism (AML/CFT) framework.

Emphasis on Risk-Based Approach

FATF emphasizes the importance of a risk-based approach in assessing the risks posed by money laundering and terrorist financing. It also recommends establishing effective national cooperation and coordination mechanisms between relevant authorities to combat these threats.

Key Areas for Improvement

The report highlights several key areas for improvement, including:

  • Strengthening laws and regulations related to money laundering and terrorist financing
  • Ensuring confiscation and provisional measures are in place to prevent the misuse of funds and assets
  • Implementing targeted financial sanctions against individuals and entities involved in terrorism and terrorist financing, as well as those associated with proliferation activities

Effective Customer Due Diligence Procedures

FATF recommends that Papua New Guinea implement effective customer due diligence procedures, maintain accurate records, and report suspicious transactions. Financial institutions should have robust internal controls, and foreign branches and subsidiaries should comply with AML/CFT requirements.

Monitoring and Reporting Suspicious Transactions

The report emphasizes the importance of establishing a reliable system for monitoring and reporting on suspicious transactions, as well as ensuring that law enforcement and investigative authorities have sufficient powers to conduct investigations and prosecutions.

Transparency and Beneficial Ownership

FATF also recommends that Papua New Guinea establish transparency and beneficial ownership of legal persons and arrangements, as well as regulate and supervise financial institutions and designated non-financial businesses and professions (DNFBPs).

Consequences for Non-Compliance

Papua New Guinea has committed to implementing the FATF recommendations by a certain deadline. Failure to do so may result in the country being placed on the FATF Public Statement, which could have significant consequences for its international reputation and economic relationships.

Conclusion

The Benin Follow-Up Report provides a roadmap for Papua New Guinea to strengthen its AML/CFT framework and prevent the misuse of its financial system for illicit activities. By implementing these recommendations, Papua New Guinea can improve its anti-money laundering and combating the financing of terrorism efforts and maintain good relations with the international community.