OPENING OF THE INAUGURAL AML/CFT CONFERENCE
MS. ELIZABETH GENIA
APEC HAUS, PORT MORESBY, PAPUA NEW GUINEA
Opening Remarks
Daba Namona, Morning Tru Olgeta.
I begin by acknowledging our distinguished guests,
• Secretary of the Department of Justice and Attorney General, my NCC Co-chair Dr Eric Kwa
• IPA Managing Director Mr. Clarence Hoot
• President of the PNG Law Society, Mr. Hubert Namanai
Welcome also to our international partners;
• CEO of AUSTRAC, Mr. Brendan Thomas
• Professor Louis De Koker (‘co-kar’) of the ADB
Alongside Director of FASU Mr. Wilson Onea, I extend a warm and sincere thank you to our co-hosts today, Transparency International Papua New Guinea, particularly Ms Arianne Kassman, Mr. Peter Aitsi and Mr. James Lunge.
Your mission to empower Papua New Guinea to combat corruption is integral to our shared efforts in fighting money laundering and financial crime.
Representatives from the Government, members of the Diplomatic Corps, officials from the DJAG, ICAC and IPA, representatives from the banking community, our colleagues from Non-Bank Financial Institutions (NBFIs) and our valued civil society organisations, ladies and gentlemen.
In Papua New Guinea, we value our rich diversity, our sense of community, our generosity of spirit and mutual respect.
It is in keeping with these values that I humbly and respectfully acknowledge the traditional owners of this land - the Motu and Koitabu people - and I honour their deep and continuing connection to this place.
Introduction
Ladies and Gentlemen, thank you for joining us this morning for the Bank of Papua New Guinea’s inaugural AML/CFT and CPF conference.
I address you today in my role as the Governor of the Bank of Papua New Guinea, and as co-Chair of our National Co-ordinating Committee (NCC) on Anti Money Laundering, Counter Terrorist Financing and Counter Proliferation Financing alongside my fellow co-Chair, Dr Kwa.
For the first time, we have gathered delegates from across Government and the private sector in recognition that our response to financial crime demands a whole of society effort, spanning across government, business and civil society alike.
This event is open to all Papua New Guineans, in recognition of the far-reaching and important nature of our work in this space.
This is also reflected in today’s theme - “Fighting Financial Crime is Everyone’s Business.” PNG is part of a global village and cannot shy away from the international obligations we face, particularly those under the Financial Action Task Force or FATF.
The FATF monitoring process holds Papua New Guinea to account, but we all know that our AML challenges need to be addressed in their own right, not only to satisfy FATF standards.
This conference comes at a turning point for Papua New Guinea.
In 2024 our Mutual Evaluation Report to the FATF was finalised, and the findings of course were not good.
The report highlighted significant shortcomings in both the effectiveness of PNG’s AML/CTF/CPF framework and our level of technical compliance with FATF standards,
Grey listing is a challenge, but it is not a catastrophe. It is a call to action - and what will define us is our determination to act - to respond decisively, to strengthen our systems and to demonstrate that we are serious about reform.
Where We Stand
I want to reflect briefly on our existing AML system, which in many ways delivers a modern and robust framework to combat financial crime. Our AML/CFT legislation, enacted in 2015, provides us with a solid foundation.
Our banks and financial institutions provide strong reporting of suspicious transactions through the Suspicious Transaction Reports (STRs) submitted to FASU.
Agencies like FASU have dedicated and experienced officers.
And yet, grey listing is coming.
The Mutual Evaluation Report identified key deficiencies in the flow of information and the level of cooperation between our government agencies - which is critical to our success.
This is one area where we clearly need to improve.
To address this, we are establishing a formal inter-agency coordination framework, with clear protocols for intelligence sharing, joint taskforces for priority cases, and measurable reporting obligations across agencies.
This is not simply about meetings – it is about ensuring that law enforcement, regulators, prosecutors and supervisors are working from the same information, and acting in unison.
We will also strengthen our collaboration with our regional and international partners, drawing on shared experiences and technical support from AUSTRAC, the ADB and others.
By working together, we will build a stronger AML framework in PNG - and contribute to a stronger AML framework across the Pacific region.
The Road Ahead
I want to outline what Papua New Guinea can expect in the months to come.
Soon, Dr. Kwa and I will submit our Post Observation Period Report to the FATF.
This report sets out the work we have already done to address PNG’s deficiencies - we have made some progress, but it is unlikely to be enough.
In February next year the FATF’s International Cooperation Review Group will formally place PNG on a list of countries subject to ‘increased monitoring’.
Papua New Guinea will receive a formal action plan, aimed at bringing clarity and prioritisation to our reforms.
We do not know for certain what will be included, but we can anticipate the main points in the formal action plan - based on the Mutual Evaluation Report and our understanding of our own risks.
While we are on the grey list, we will be subject to increased monitoring, with regular updates to the FATF on how we are improving.
As part of our work so far, we have been working to strengthen our understanding of our AML/CFT risks and vulnerabilities in an updated National Risk Assessment.
This is a foundational requirement of the FATF - they want to see that countries truly understand their vulnerabilities and risks in relation to financial crime and money laundering, and implement systems and processes that mitigate the identified risks and work for local conditions. PNG is no different.
For those of you who report into our AML/CFT system - thank you – as your data is integral to this work.
Momentum and Reform
There is already momentum building: FASU has strengthened its supervisory manuals, inter-agency taskforces are operational, and donor-funded projects are feeding into our reform efforts and our Post Observation Period Response.
There are legislative changes underway which will strengthen our ability to take action and we have the commitment of Government to pass the laws needed.
Beyond legislation, the Government has given its full commitment at the highest level to drive these reforms. Cabinet has endorsed AML/CFT as a national priority, and all agencies represented here today are under clear instruction to align their efforts with this objective.
You will likely see changes in some technical measures:
– the Proceeds of Crime Act for example will need updating, and we need to regulate and supervise virtual assets;
- if not regulated appropriately; and
– virtual assets can enable financial crime.
I am sure these changes, and the work that lies ahead, will be discussed in great depth over the next two days.
The FATF focuses on the effectiveness of our system. Grounded in understanding our own risks, we need to turn information and reporting into law enforcement action, prosecutions and confiscations.
Good information flowing where it needs to - must translate into results.
Without demonstrating - with tangible results - that PNG is indeed fighting financial crime, our words are meaningless.
That evidence must take the form of cases. Over the next 12 months, we are committed to increasing the number of money laundering investigations, prosecutions, and asset confiscations, and to publishing those results.
Success will not be measured by the number of reports written, but by criminals being held to account and the proceeds of crime recovered.
The deficiencies highlighted in the Mutual Evaluation Report require a whole-of-country approach;
- a concerted effort is required from all of us to ensure we comply with international standards and demonstrate that we are enforcing our laws.
While investors and international partners are likely to see grey listing as an indicator to apply more scrutiny to their engagement with PNG, we need to do more than make promises.
If we show credible enforcement outcomes and demonstrate a system that is both effective and decisive, the impacts of grey listing on our economy can be minimised.
We are also engaging proactively with our international partners, correspondent banks and regional bodies to mitigate the potential disruption to trade and financial flows.
Transparency, early communication and evidence of progress will be the keys to maintaining confidence in PNG during this period of increased monitoring.
Private Sector and DNFBPs
I want to briefly mention the important role of the private sector.
Our banks and financial institutions are already playing a strong role, but we must also acknowledge that our vulnerabilities extend beyond banks.
Lawyers, accountants, real estate agents, and other designated non-financial businesses and professions must step up to their obligations.
These sectors cannot remain as blind spots.
As part of our reforms, they will be brought more clearly under supervision, trained on their obligations, and held accountable for compliance.
We will also look at how technology - including data analytics, digital KYC and regulatory technology - can support both banks and DNFBPs in meeting their obligations more effectively and at lower cost.
Financial Inclusion
I now turn to an issue of particular importance to me and to the BPNG - financial inclusion.
Recent changes to the FATF’s Recommendation 1 – which requires countries to apply a proportionate, risk based approach to money laundering, terrorist financing and proliferation financing risks - make it clear that our consideration of AML must be proportionate and risk-based.
However, robust AML effectiveness must not become a barrier to bringing more Papua New Guineans into the financial system and the formal economy.
These concepts are not in conflict. Financial inclusion reduces the size of informal markets and the black economy where criminals and terrorists hide their operations.
BPNG’s commitment to financial inclusion aligns with our broader agenda, where inclusion must be a priority alongside our response to grey listing.
We all have an important role to play. Corruption at every level of our society is a plague on our nation and a barrier to our country’s progress.
Public awareness and education programs about the damaging effects and consequences of money laundering and corruption are critical to building a culture of compliance and trust; - in the land of a thousand tribes - our country comes first and foremost.
Communities must understand that these crimes do not exist in isolation - they undermine livelihoods, services, opportunities, our standard of living and ultimately hold back the development of our nation.
Grey listing may be imminent, but it does not define Papua New Guinea.
What will matter most is our resolve to respond in a manner that shows we are serious about the changes needed.
This is a journey of reform that will leave PNG’s financial system stronger, more resilient, and more trusted in the eyes of the world.
Closing
These two days are an opportunity, bringing us together for an event that not only identifies and speaks to the problems we face, but also drives the discussion towards finding collaborative solutions to create a financial system that works for all of us.
Please, learn and collaborate over these two days. Strong and robust discussions will translate directly into better outcomes, helping to reduce our time on the grey list.
If we succeed, we will not only exit the grey list faster, we will also build a stronger, more transparent and more resilient financial system for the people of Papua New Guinea.
Thank you.