Financial Crime World

Unraveling the Web of Financial Crime in Papua New Guinea: Insights from the Papua New Guinea Financial Intelligence Unit

Authors: John Chevis and Bernard Barrum

Introduction

Amidst the lush landscapes and abundant natural resources of Papua New Guinea (PNG), a complex web of financial crime persistently casts a shadow over the nation. In this article, we delve into the innovative methods employed by the Papua New Guinea Financial Intelligence Unit (PNGFIU) in combating large-scale grand corruption using Anti-Money Laundering (AML) legislation.

Papua New Guinea: Political Instability and Underdeveloped Economy

  • Population: approximately 6.8 million
  • Ranked 137 out of 169 in the Human Development Index
  • Over half the population living below the international poverty line
  • Notoriously fractious and competitive political climate
  • Vote buying and corruption among public servants are common
  • Underdeveloped economy with a GDP of US$7.89 billion in 2009 and US$1,172 per capita
  • Vulnerable to various forms of corruption and financial mismanagement

The Papua New Guinea Financial Intelligence Unit (PNGFIU)

  • Established in 2007 to combat money laundering
  • Remit expanded to incorporate the fight against corruption
  • Headed by Detective Senior Sergeant Bernard Barrum

Innovative Methods to Combat Financial Crime in Papua New Guinea

Significant Cash Transaction Reports (SCTRs)

  • Identify public servants engaging in suspicious transactions
  • Analyze large deposits exceeding legitimate earnings
  • Issue warnings to individuals, raising perceived risk and detection likelihood

Cheque Due Diligence Guidelines

  • Prevent illicit funds from entering the banking system
  • Reduce opportunity for corruption to propagate
  • Prosecute banks handling suspicious government cheques

Successes and Ongoing Challenges

  • Innovative use of AML legislation yields some success
  • Political challenges hinder the implementation of effective anti-corruption legislation
  • Collaborative efforts between various stakeholders increasingly crucial

Conclusion

  • PNGFIU’s methods offer valuable insights for countries facing similar challenges
  • Raising perceived risk and limiting opportunities for financial crimes to flourish
  • Accountable and transparent financial system in PNG still a work in progress