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

It should be noted that the new style FATF Mutual Evaluation has not yet been undertaken.

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.

Corruption is a major barrier to progress in Papua New Guinea (PNG), significantly impacting governance, economic development, and social stability, as evidenced by a low score of 29 on the 2023 Corruption Perceptions Index. Internal issues such as climate change, illegal logging, and inadequate enforcement of anti-corruption laws contribute to the pervasive corruption. Despite PNG's ratification of the UN Convention against Corruption, its lack of participation in key agreements underscores the urgent need for comprehensive legal reforms to effectively combat corrupt practices.

Papua New Guinea (PNG) is the largest economy in the Pacific Islands, with significant trade and investment opportunities, particularly in the petroleum and mining sectors. The government projects a 5.0 percent economic growth rate alongside an anticipated inflation rate of 5.0 percent, supported by commitments to law and justice funding and security assistance from Australia. Despite a decline in foreign direct investment in 2021, PNG aims to create an export-driven economy bolstered by a strong domestic market and regulatory reforms to attract institutional investors.

Papua New Guinea (PNG) presents significant investment opportunities, particularly in the petroleum and mining sectors, despite a notable decline in foreign direct investment (FDI) in 2021. The government is actively promoting FDI through initiatives like the National Trade Policy and the Connect PNG program, which aims to enhance infrastructure and regulatory frameworks to attract institutional investors. While the investment climate is bolstered by government commitments to stability and regulatory reforms, challenges remain, including a recent delay in the $10 billion Papua LNG project and concerns about environmental and social impacts.