Papua New Guinea has been placed on the Financial Action Task Force’s list of Jurisdictions Under Increased Monitoring, commonly known as the “grey list”, following the FATF plenary in Mexico City on 13 February.
The designation subjects PNG to enhanced monitoring by the global financial crime watchdog over weaknesses in its anti-money laundering, counter-terrorist financing and counter-proliferation financing (AML/CFT/CPF) regime.
The decision was confirmed in a joint statement issued Feb. 17 by Eric Kwa, secretary of the Department of Justice and Attorney General, and Elizabeth Genia, governor of the Bank of Papua New Guinea. Both serve as co-chairs of the National Coordinating Committee on AML/CFT/CPF.
Officials moved to reassure the business and financial community that the listing relates to the effectiveness of PNG’s legal and enforcement frameworks, not the prudential soundness of its banking system.
Government endorses action plan
PNG has agreed to implement a structured action plan developed through the FATF process. The plan sets out benchmarks and timelines aimed at strengthening the effectiveness of the country’s AML/CFT/CPF systems.
Prime Minister James Marape conveyed the government’s commitment at the highest political level, and the National Executive Council has directed all 23 agencies represented on the NCC to prioritise implementation.
The NCC comprises enforcement bodies, supervisory authorities, intelligence units, prosecutors and policy agencies. Officials said grey-listing requires a coordinated national response.
“Grey-listing is not a matter for one institution — it requires a coordinated national response across all responsible agencies,” the central bank said. Genia said the focus now shifts to execution.
“The action plan provides PNG with a clear roadmap and defined reporting cycles,” she said. “Our responsibility is disciplined implementation, measurable outcomes and regular progress updates to the FATF.”
PNG is scheduled to submit its first progress report in September 2026, in line with FATF reporting cycles. While monitoring follows set timelines, authorities said the objective is to demonstrate sufficient progress to move towards removal from increased monitoring within, or ahead of, the established deadlines.
Kwa underscored the importance of inter-agency coordination.
“The NCC mechanism ensures that investigative bodies, supervisors and policy agencies work in concert. Their collaboration is already delivering results,” he said.
Early enforcement activity
Implementation of the action plan has already begun, according to the statement. Authorities cited recent asset freezes and arrests as evidence of strengthened cooperation among NCC agencies, including through the ARROW referral pathway.
Officials indicated that businesses can expect increased enforcement activity and heightened regulatory scrutiny as agencies intensify compliance efforts under the action plan framework.
For the business and investment community, authorities sought to draw a clear distinction between FATF monitoring and financial sector stability.
PNG’s financial institutions, including commercial banks and the central bank, continue to operate under prudential frameworks aligned with international standards. Authorities said correspondent banking relationships and access to the international financial system remain stable.
The FATF process assesses the effectiveness of a country’s legal, supervisory and enforcement systems in combating financial crime. It does not evaluate the solvency, liquidity or capital adequacy of the banking sector.
Political and international backing
The NCC co-chairs said the government has provided full political and financial backing, noting that FATF places significant weight on demonstrated political commitment to reform.
They said agencies have been assured of the funding, policy direction and legislative support required to meet FATF timelines.
International partners have also indicated their readiness to assist PNG. Support was signalled during the Mexico City plenary and in discussions with multilateral partners in Washington. The NCC will coordinate external technical assistance to align with the requirements of the action plan.
While the increased monitoring designation may bring heightened scrutiny, officials stressed that the process is structured, time-bound and focused on measurable reforms, with the government’s stated objective being accelerated progress towards removal from the grey list.
