Financial Crime World

Papua New Guinea’s Financial Crime Risk Assessment Tools Under Scrutiny Amid Corruption Concerns

===========================================================

Papua New Guinea (PNG) is facing a significant risk of financial crime, particularly money laundering, due to domestic corruption and other criminal activities. Despite rapid economic growth, large-scale foreign investment, and an escalating crime rate, the country’s ability to tackle financial aspects of corruption remains severely hampered.

Challenges in Combating Financial Crime

  • Lack of political commitment to “follow the money” and regulate anti-money laundering (AML) obligations by financial sector regulators has hindered efforts to combat financial crime.
  • Misappropriation of government funds is a major concern, with funds often placed through the banking sector in PNG before being used to purchase real estate, high-value vehicles, distributed in cash, or moved offshore.

World Bank Report Highlights Need for Strengthened AML/CFT Regulations

A recent report by the World Bank, produced as part of the Financial Sector Assessment Program (FSAP) of Papua New Guinea, provides a summary of the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) measures in place in PNG. The report highlights the need for:

  • Strengthened AML/CFT regulations to effectively combat money laundering and terrorist financing.
  • Improved financial crime risk assessment tools to identify and mitigate risks.

Prioritizing Effective AML/CFT Measures

As Papua New Guinea continues to grapple with corruption and financial crime, it is essential that authorities prioritize the development and implementation of effective AML/CFT measures to safeguard the country’s financial system. This includes:

  • Building capacity of the Financial Intelligence Unit (FIU) to effectively identify and investigate financial crimes.
  • Regulating anti-money laundering obligations by financial sector regulators to prevent misuse of the banking system.
  • Implementing strengthened AML/CFT regulations and improved financial crime risk assessment tools to combat money laundering and terrorist financing.

By prioritizing effective AML/CFT measures, Papua New Guinea can reduce the risks associated with financial crime and ensure the stability and integrity of its financial system.