02/10/2025
What is Grey Listing and What Does it Mean for PNG?
1. Grey listing is when the Financial Action Task Force (FATF) places a country under increased monitoring for weaknesses in combating money laundering, terrorist financing, and proliferation financing.
2. It signals to the international community that a country is considered a higher-risk jurisdiction for financial transactions.
3. Grey listing does not impose sanctions, but it does increase scrutiny from international partners.
4. Countries on the list must agree to implement an action plan to address identified deficiencies.
5. PNG’s 2024 FATF mutual evaluation report found serious gaps in compliance and enforcement of its AML/CFT (Anti-Money Laundering and Counter-Terrorist Financing) framework.
6. If PNG is grey listed, international banks may impose stricter checks or delay transactions involving PNG banks.
7. This can increase the cost of doing business for exporters, importers, and ordinary citizens sending or receiving money.
8. Foreign investment may slow down as investors view PNG as a riskier environment.
9. PNG’s global reputation will be affected, with more scrutiny on its financial systems.
10. Grey listing could make it harder for PNG to access international finance and credit, including loans from banks.
11. Businesses may face longer delays in clearing international trade payments.
12. PNG must demonstrate real enforcement results: prosecutions, convictions, and asset confiscations related to financial crime.
13. The Central Bank, ICAC, IPA, and other agencies must work together to close information gaps and improve cooperation.
14. Regulating virtual assets and strengthening the Proceeds of Crime Act are key priorities for compliance.
15. Grey listing pressures countries to modernise systems and improve financial transparency.
16. For PNG, it highlights long-standing issues with corruption, weak inter-agency coordination, and under-resourced enforcement bodies.
17. The risk of grey listing may serve as a catalyst for reform, pushing agencies to work together more effectively.
18. Other countries have exited the grey list within 1–3 years by showing credible reforms and outcomes—PNG can too.
19. Success depends on a whole-of-government and whole-of-country approach, not just the Central Bank or one agency.
20 While grey listing presents risks, it also offers PNG an opportunity to build a stronger, more transparent and trusted financial system for the long term.
