Papua New Guinea Country Summary

FATF Status

Papua New Guinea is not on the FATF List of Countries that have been identified as having strategic AML deficiencies.

Latest FATF Statement - 24 June 2016

The FATF welcomes Papua New Guinea’s significant progress in improving its AML/CFT regime and notes that Papua New Guinea has established the legal and regulatory framework to meet its commitments in its action plan regarding the strategic deficiencies that the FATF had identified in February 2014. Papua New Guinea is therefore no longer subject to the FATF’s monitoring process under its on-going global AML/CFT compliance process. Papua New Guinea will work with the APG as it continues to address the full range of AML/CFT issues identified in its mutual evaluation report.

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Papua New Guinea was undertaken in 2024. According to that Evaluation, Papua New Guinea was deemed Compliant for 4 and Largely Compliant for 13 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness ratings.

Corruption is a major barrier to progress in Papua New Guinea, with a low score of 29 on the 2023 Corruption Perceptions Index indicating significant public sector corruption. The country faces numerous challenges, including human trafficking, arms trafficking, environmental crimes, and drug-related issues, exacerbated by weak law enforcement and political instability. Despite ratifying the UN Convention against Corruption, PNG's lack of alignment with global standards and inadequate legal reforms hinder effective anti-corruption measures.

Papua New Guinea (PNG) is the largest economy in the Pacific Islands, with significant trade and investment opportunities primarily in the petroleum and mining sectors. The government projects a 5.0 percent economic growth rate alongside a similar inflation rate, while initiatives like the Connect PNG program aim to enhance infrastructure and attract foreign direct investment (FDI) to foster an export-driven economy.

Papua New Guinea (PNG) presents significant investment opportunities, particularly in the petroleum and mining sectors, despite a recent decline in foreign direct investment (FDI). The government is actively promoting FDI through its National Trade Policy and various initiatives aimed at enhancing infrastructure and regulatory frameworks, including the establishment of Special Economic Zones. However, challenges such as political instability and environmental concerns remain, impacting the overall investment climate.