THE COUNTRY OF NEVER LEARN


by PAUL L. KEBAIJA

Bank of Papua New Guinea Governor Elizabeth Genia told the Transparency International PNG anti-money laundering conference at Apec Haus on 30 September that illicit funds move through banks, remitters, foreign exchange dealers, real estate, and the lawyers, accountants and company service providers. In the same speech she assured those sectors that naming them was not blaming them for the grey listing.

If the channels are not at fault, and the laws have just been fixed, the obvious question is who is. Wilson Onea, director of BPNG's own Financial Analysis and Supervision Unit, told a panel at the same conference that most of the risks in the 2026 national risk assessment were already there in 2017, and that law enforcement, regulatory and policy capacity had not changed since. "Our core vulnerability is execution, and not legislation," he said. Nine years of the same risks and the same capacity is not a drafting problem. It is a choice about priorities.

PNG has run this play before. Grey-listed in 2014, it passed a package of five laws in 2015 and was off the list by 2016. The Asia/Pacific Group's 2024 mutual evaluation then found just two money laundering prosecutions since PNG adopted FATF standards in 2008. Development Policy Centre researchers counted five convictions, mostly self-laundering, and none in the sectors PNG rates highest risk. In the Paraka case, with money routed through seven law firms and an accounting firm, Paul Paraka was eventually convicted, but the laundering charges were dropped and the K162 million was never recovered.

Parliament has now amended the Anti-Money Laundering and Counter Terrorist Financing Act, the United Nations Financial Sanctions Act and the Criminal Code to strengthen freezing, sanctions and confiscation. Genia is right that the test is no longer what has been passed but "what we have done with it". The public record on that test is thin. Taskforce ARROW froze K198.8 million in February, the largest freeze police have ever announced. Frozen is not forfeited. Eight months on, no suspect has been named and no confiscation has been publicly reported.

The FATF action plan PNG agreed asks for a demonstrated increase in money laundering investigations and prosecutions, more freezing and confiscation of criminal proceeds, and fixes to the rules on politically exposed persons. Those three words do not appear in the governor's speech as reported. She ranked corruption and fraud as the greatest threat, and Onea put government procurement fraud in the top five. Procurement fraud against the State rarely happens without someone inside the State. A risk briefing that names the remitter and the conveyancer but never the minister or the department head describes the pipes and leaves out who opened the tap.

FASU sits inside BPNG, and the governor co-chairs the national coordinating committee. The central bank supervises the commercial banks and licenses foreign exchange dealers, the very sectors the FATF plan says need better risk-based supervision. Her line about gold leaving the country unrecorded deserves the same scrutiny. Under the Central Banking (Foreign Exchange and Gold) Regulation, every gold export licence is issued by the Bank of PNG. Gold leaving without a record is leaving around a regime the central bank runs.

PNG was listed in February and took the option to defer reporting at the June plenary, so its first progress report has only now reached the FATF's review group. The 2027 general election falls inside the next reporting cycles, and campaigns run on the cash the governor herself says hides the movement of money. Parliament's new Permanent Committee on Financial Integrity and Anti-Money Laundering, chaired by Madang MP Bryan Kramer, is meant to oversee 23 agencies and 75 recommendations. It will have to decide early whether it is an oversight body or another venue for speeches.

The governor could publish the scoreboard tomorrow, at no cost: investigations opened, prosecutions filed, convictions secured, and assets frozen against assets actually confiscated, quarter by quarter and by predicate offence. She could release the progress report the committee sent to the FATF, and name the reporting entities penalised for failing to report. Until that happens, every conference speech repeats a promise PNG already made in 2015 and then let lapse.

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