Papua New Guinea is racing to strengthen its anti-money laundering and counter-terrorism financing framework after the Financial Action Task Force (FATF) signalled in October 2025 that the country risks being placed on its grey list.
Such a move would undermine investor confidence, raise transaction costs, and complicate international banking relationships. The FATF review cited weaknesses in beneficial ownership disclosure, enforcement of reporting obligations, and coordination among regulatory agencies.
The Bank of PNG and the Department of Finance have since established a taskforce to address gaps in legislation and institutional capacity. New regulations on customer due diligence, record keeping, and cross-border transaction reporting are expected before the next FATF evaluation in early 2026.
Financial institutions have been urged to upgrade compliance systems, train staff, and adopt digital monitoring tools. Industry associations are calling for technical assistance to meet the new requirements. Government officials say avoiding grey listing is a top priority, as it could deter correspondent banks and foreign direct investment.
Development partners, including the IMF and ADB, are providing advisory support on financial integrity reforms. Analysts warn that failure to act decisively would damage PNG’s financial reputation just as it seeks to expand export earnings and attract infrastructure financing. The coming months will test the government’s ability to balance regulatory enforcement with maintaining financial stability.
In July this year the APNGBC had hosted an online Webinar along with Westpac PNG on the implications of the FATF on businesses.
