Police Commissioner David Manning has issued a strong warning to financial institutions in Papua New Guinea, urging banks to urgently report suspicious transactions as the country intensifies efforts to exit the Financial Action Task Force (FATF) greylist.
Speaking to executives from eight banks operating in the country, Commissioner Manning said the financial sector must play a critical role in strengthening oversight and ensuring compliance with anti-money laundering requirements.
“Now is not time for the financial sector to sit back and let questionable transactions slide. If you see something suspicious then you report it,” Manning said.
The directive comes as Papua New Guinea works through requirements set under the FATF greylist framework, which places increased scrutiny on countries to improve measures against money laundering and financial crimes.
Manning emphasized that timely reporting of suspicious transactions is essential to maintaining the integrity of the country’s financial system and supporting national efforts to meet international compliance standards.
“If a flagged transaction is found to be legitimate, then this is an effective financial system at work. But a failure to exercise effective scrutiny over banking business in a timely manner is a failure to meet legislated due diligence requirements,” he said.
He added that accurate and prompt transaction monitoring would significantly contribute to PNG’s efforts to exit the greylist and restore confidence in its financial systems.
The Commissioner highlighted the role of the Asset Restraint and Recovery Working Group (ARROW), a multi-agency body tasked with identifying, restraining, and recovering proceeds of crime. ARROW includes key institutions such as the Bank of Papua New Guinea’s Financial Analysis and Supervision Unit, the Royal Papua New Guinea Constabulary, and the Office of the Public Prosecutor.
Authorities say the group relies heavily on Suspicious Matter Reports (SMRs) submitted by financial institutions to detect and act on financial crimes.
“We need bank information quickly, so that ARROW can use legislated tools to restrain and confiscate proceeds of crime before funds are siphoned off or transferred overseas,” Manning said.
He noted that a significant number of reported cases relate to the misappropriation of government procurement funds, particularly involving Bank of Papua New Guinea cheques issued without proper supporting documentation.
Manning warned that failure by financial institutions to follow legal processes could result in liability for facilitating money laundering, with legal action to be taken against non-compliant entities.
Recent data shows a marked increase in the freezing of illegal funds over the past six months, indicating heightened enforcement efforts by authorities.
Prime Ministerial directives have also reinforced the need for collaboration between government agencies and the private sector, particularly financial institutions, to ensure PNG exits the greylist promptly and strengthens its financial systems.
With increased scrutiny and enforcement now underway, authorities are calling on banks to remain vigilant and proactive, as timely reporting and cooperation will be critical in safeguarding Papua New Guinea’s financial system and achieving its goal of exiting the FATF greylist.
