Papua New Guinea has five months remaining to fix its anti-money laundering and counter-terrorist financing (AML/CTF) systems or face the severe repercussions of being placed on the Financial Action Task Force’s (FATF) “grey list”.

The FATF has imposed an October 2025 deadline, and the government is scrambling to prove its commitment to global partners.

Speaking in Parliament, Prime Minister James Marape said Treasury Minister, Ian Ling-Stuckey had been given the responsibility to lead a taskforce to fix PNG’s issues associated with money laundering and terrorist financing.

“I summoned all agency heads to a critical meeting last week giving them clear direction, in no uncertain terms, that they work day and night to avert the possibility of us getting grey listed,” Marape said.

“This review comes around every five years.

“We have only three or four areas that are outstanding that we must dispatch forthwith.”

PNG is no stranger to the FATF grey list, having been placed under increased monitoring in 2014 before successfully being removed in 2016.

Deficiencies highlighted
However, a recent assessment by the Asia Pacific Group on Money Laundering (APG) highlighted ongoing deficiencies, particularly in the effectiveness of PNG’s AML/CTF regime.

While the country has made strides in establishing the necessary laws and regulations (technical compliance), the real challenge lies in PNG’s implementation and enforcement.

The core of the problem, according to analysts, is a lack of effective prosecution and punishment for money laundering and terrorism financing.

High-risk sectors such as corruption, fraud against government programmes, illegal logging, illicit fishing, and tax evasion, remain largely unchecked by successful legal actions.

Capacity gaps within key agencies like the Royal Papua New Guinea Constabulary and the Office of the Public Prosecutor have been cited as significant hurdles.

Recent drug hauls have also highlighted existing flaws in detection in the country’s financial systems.

The implications of greylisting are far-reaching and potentially devastating for a developing nation like PNG, which is heavily reliant on foreign investment and international financial flows.

Impact on economy
Deputy Opposition leader James Nomane warned in Parliament that greylisting “will severely affect the economy, investor confidence, and make things worse for Papua New Guinea with respect to inflationary pressures, the cost of imports, and a whole host of issues”.

If PNG is greylisted, the immediate economic fallout could be substantial. It would signal to global financial institutions that PNG carries a heightened risk for financial crimes, potentially leading to a sharp decline in foreign direct investment.

Critical resource projects, including Papua LNG, P’nyang LNG, Wafi-Golpu, and Frieda River Mines, could face delays or even be halted as investors become wary of the increased financial and reputational risks.

Beyond investment, the cost of doing business in PNG could also rise. International correspondent banks, vital conduits for cross-border transactions, may de-risk by cutting ties or scaling back operations with PNG financial institutions.

This “de-risking” could make it more expensive and complex for businesses and individuals alike to conduct international transactions, leading to higher fees and increased scrutiny.

This article is republished under a community partnership agreement with RNZ.

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Despite changing his citizenship to the Pacific state of Vanuatu, a Chinese man wanted for various economic crimes was arrested at Ninoy Aquino International Airport last week as he was about to board a flight for Singapore.

In a statement yesterday, the Philippine Bureau of Immigration Commissioner Norman Tansingco said Liu Jiangtao, 42, had presented himself for departure clearance at the immigration counter when the officer processing him saw that his name was on the bureau’s list of aliens with outstanding watchlist orders.

Records showed that Liu is one of 11 Chinese fugitives wanted for fraud, infringement of credit card management, capital embezzlement, money laundering and counterfeiting a registered trademark.

Bureau of Immigration prosecutors have filed deportation cases against the 11 fugitives.

Evelyn Macairan is a reporter of The Philippine Star.

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Transparency International Papua New Guinea has welcomed the conviction of lawyer Paul Paraka as the police confirm they are widening the investigation into the fraud case.

The NGO admits the depths of Paraka’s activities, revealed by the case, are very worrying.

Paraka, who had operated his own eponymous law firm, was convicted of misappropriating 162 million kina (about NZ$75 million) in government funds, between 2007 and 2011.

Transparency PNG spokesperson, Peter Aitsi, said the evidence outlined the complex structures that Paraka and others put together.

Significant case
He said it was a very significant case because of the amount of public money involved.

“And those are just the funds that have been identified within this case itself and paid to different parties as a result of Paraka’s activities.

“From a TI point of view we would encourage the agencies to continue to develop the evidence and if there are further charges to be laid against individuals then we would encourage them to ensure they uphold their duty and responsibility,” Aitsi said.

Paraka’s law firm, which he claimed was the biggest in the country, was engaged by the Attorney-General and Solicitor-General’s office in 2000, but this arrangement ceased in 2006.

However, from 2007 the state was still making payments to legal firms linked to Paraka.

Investigations have seesawed for 10 years and led to the replacement of the Attorney-General, the shutting down of the police fraud unit investigating the matter, and acccusations of politicians being involved.

Meanwhile, Paul Paraka threatened legal action amid claims the issues were simply administrative matters.

Police action
Police Commissioner David Manning has confirmed an investigation into fraud, money laundering and misappropriation following Paraka’s conviction.

Manning said the Paraka case attracted significant national interest due to the huge amounts of public money involved in these corrupt dealings.

“The way and manner in which these funds were syphoned through the Department of Finance to various law firms, who would then transfer this money to Mr Paraka himself, has been the subject of public outrage,” he said.

Manning said police will continue to pursue, investigate, charge and arrest those involved, and to recoup all money lost in these illegal deals.

This article is republished under a community partnership agreement with RNZ.

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A convicted Tongan government minister, ‘Akosita Lavulavu, and her husband ‘Etuate Lavulavu have each been jailed for six years.

They were sentenced today in the Supreme Court after being found guilty on charges of obtaining money by false pretences.

The couple owned and ran the educational institution ‘Unuaki ‘o Tonga Royal Institute. They obtained state funding for the training facility, but kept the money.

Supreme Court judge Justice Nicholas Cooper said the couple had a “highly devised plan”, which they committed over about three-years, reports Matangi Tonga.

He said the public money was intended to benefit the children.

The judge said that while ‘Akosita Lavulavu had no previous offences and had pleaded for mercy, she had shown no remorse.

‘Etuate Lavulavu was first elected to Parliament in 2002, but was convicted of bribery in 2016 and forced to resign.

His wife then stepped into his parliamentary shoes.

This article is republished under a community partnership agreement with RNZ.

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A prominent Australian lawyer, Greg Sheppard, has been arrested by Papua New Guinean police and is facing a range of fraud charges.

Sheppard, a principal of Young & Williams Lawyers, was arrested on Tuesday in Port Moresby.

He was charged with two counts of misappropriation and another two counts of money laundering.

Police say the charges relate to Sheppard’s alleged involvement in the transfer of funds amounting to US$14.5 million (52 million kina) in 2018.

These funds were part of the US$75 million (K268 million) that were unlawfully withdrawn from a trust fund established to finance development projects in PNG’s Western province, the Western Province People’s Dividends Trust Account.

Sheppard, 65, was previously arrested and charged by PNG police in January in relation to the same criminal investigation.

At the time he was charged with two counts of conspiracy and another two counts of false pretence.

So far, the defendant has been charged with a total of eight offences.

Sheppard has done extensive work in PNG over recent years, recently representing the country’s former Prime Minister Peter O’Neill and Opposition Leader Belden Namah among other prominent leaders.

This article is republished under a community partnership agreement with RNZ.

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Papua New Guinea’s Police Commissioner David Manning has promised that the full force of the law and all resources at the Constabulary’s disposal will be used against policemen who flout the law and help criminals.

Commissioner Manning’s warning followed recent threats against police detectives investigating a K286 million (NZ$105 million) fraud involving Ok Tedi trust funds.

“We had two threats issued against police detectives,” he said.

“Criminals and policemen are involved.

“I will not stand for this and whether you are a criminal or a policeman who decides to engage or attack policemen, you will be dealt with equally under lawful means.

“If you want to be a criminal or align yourself with individuals or entities and challenge the police, then you have no place in the police force and I will ensure your speedy exit … straight into prison.”

Commissioner Manning said reports of policemen continuously being deployed to provide protection for logging camps or private businesses with the full knowledge and authority of their superiors would be investigated and dealt with.

Policemen ‘denying rights to justice’
“In these instances, police resources, including firearms, are being used by these policemen to protect the interest of a few, thereby denying the rights of the majority to seek justice,” he said.

“The police force will undergo beneficial change, and those currently opposing these changes for their own reasons will be weeded out.

“The majority of policemen and women perform their duties with professionalism and dedication, yet we and the country are being let down by these few members.

“The proposed changes in the disciplinary proceedings will allow for a swifter and more effective process that protects all parties concerned whilst enhancing greater accountability and appropriate penalties being dealt out.

“In the near future, legislative amendments will be made to criminalise certain offences that have caused the discipline and performance of the police force to deteriorate.

“If we are to deliver to the people of PNG a police force that they deserve and provide a policing service that adds value to their lives, we must undergo these reforms and remove impediments now.”

Asia Pacific Report republishes The National articles with permission.

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