FATF Status

Papua New Guinea is no longer 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 by the Financial Action Task Force (FATF) in 2011. According to that Evaluation, Papua New Guinea was deemed Compliant for 2 and Largely Compliant for 6 of the FATF 40 + 9 Recommendations. It was Partially Compliant or Non-Compliant for all 6 of the Core Recommendations.

US Department of State Money Laundering assessment (INCSR)

Papua New Guinea was deemed a ‘Monitored’ Jurisdiction by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR).

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                         29

World Governance Indicator – Control of Corruption             25

Papua New Guinea (PNG) is the largest economy among the Pacific Islands and offers enormous trade and investment potential. Key investment prospects are in infrastructure development, a growing urban-based middle-class market, abundant natural resources in mining, oil and gas, forestry, and fisheries.

Prime Minister James Marape’s government is concentrating efforts towards large scale investments and trade and is looking to increase manufacturing and downstream processing to reduced dependency on imports and increase the country’s export marketplace. The Government of Papua New Guinea (GoPNG) endorses a fair, open, and collective approach in its decision-making processes, especially decisions concerning the proper management of the country’s resources and investment returns.

Under Marape, PNG aims at creating a conducive socio-economic environment for businesses to grow and flourish. Focusing efforts to build and maintain infrastructure, increase measures in safety and security, support strong regulatory practices, strengthen governance, and increase health and education access will aid in creating strong livelihoods and businesses. Current reforms are shrinking the high debt levels and foreign direct investment (FDI), especially in the natural resources sector, will stimulate the economy for many years.

The Marape administration recognizes the high cost of logistical services, the breakdown of law and order, a cumbersome public sector, and poorly performing state-owned enterprises. “Friends to all, enemy to none,” is the administration’s rallying call to address these problems, as GoPNG regularly reaffirms its need for FDI and partnerships to stimulate its economy.

Australia was the top investing country in 2021, followed by Malaysia, the USA, Hong Kong, and China. In 2022 investment from China significantly increased. Much of the investment from China has been in Chinese-owned energy and infrastructure adding power generation to support Chinese-owned mining entities. By sector investments, the energy sector had the highest investments, and investment proposals, followed by the retail, and wholesale sector, then manufacturing, mining and petroleum, and other sectors. Mining companies continue to be an attractive investment destination. Growth in mining industry is estimated to be 5.4 percent, underpinned by the expected reopening of the Porgera mine and improvements in OK Tedi and Wafi-Golpu production in 2023. Papua LNG enters the next phase of liquid natural gas commercialization that bring TotalEnergies, ExxonMobil, and Santos collaborating for years to come. Furthermore, telecommunication companies are also anticipating growth and seen as good foreign investment opportunities in PNG and the Pacific. Telstra Australia acquired telecommunication giant Digicel Pacific which has the largest market share in PNG. Vodafone PNG – Amalgamated Telecom Holdings Ltd started operations as the third mobile operator in PNG with an anticipated investment exceeding $399 million.

The GoPNG recognizes the need for climate change action and has submitted its Enhanced National Determined Contributions (NDC). PNG’s proposed climate change mitigation, and adaptation strategies to achieve full carbon neutrality by 2050 are conditional. The GoPNG made climate change mitigation and adaptation strategies into its national long-term visions, plans, and strategies. As PNG is already beginning to see climate refugees on its shores, the climate change envoy at COP27, stressed, and leveraged preservation of the country’s rainforests and oceans for climate change action, and the need for economic development and sustainable FDI along these lines.

The economy is healing from COVID-19 deficits but shipping cost, fuel fluctuations, and food insecurity are still major concerns as the Russian war of aggression in Ukraine still rages on.

Country Links

Bank of Papua New Guinea