Overview of the PNG Financial Sanctions regime – Effective monitoring and supervision of Targeted Financial Sanctions Presentation Outline

❑ Monitoring & Supervision of TF & PF ❑ Supervision by FASU ❑ Who is supervised by FASU? ❑ Supervision and monitoring of sanctions ❑ Initiatives undertaken ❑ Challenges ❑ Conclusion

Supervision

FASU in BPNG as sole Supervisor (S. 72 of the AML/CTF Act 2015)

FASU supervises all financial institutions and DNFBPs in this national AML CTF regime Who is Supervised by FASU?

There are two primary groups that are supervised which includes the FIs and DNFBPs

Financial Institutions (FIs) DNFBPs i. Commercial banks i) real estate agent, ii. Foreign subsidiaries of banks ii) a motor vehicle dealer iii. Savings and Loans societies, Microbanks, iii) a dealer in precious metals Microfinance companies iv) a dealer in precious stones, iv. Life Insurance, General Insurance v) a lawyer v. Superannuation funds vi) notary public or other independent vi. Investment banks legal professional vii. Mortgage companies, Finance companies vii) a trust or company service provider viii. Money remitting services, money changers viii) accounting practitioners/professional

NB: DNFBP – Designated Non-Financial Businesses or Professions Bank of Supervision and Monitoring

Financial institutions and DNFBPs are required to put in place effective procedures, policies and controls for – • Monitoring the risks • Complying with customer due diligence requirements ✓ Ensuring that transactions carried out on behalf of its customers are consistent with the customer profile Supervision & monitoring

2018/19 to current, 7 onsites conducted on FIs/DNFBPs: Focused on Transaction monitoring programs that covered sanctions screening. Most institutions use World Check and SWIFT sanctions screening tools. For non-banks, it was noted that they rely on tools provided by SWIFT/FASU Effective supervision and monitoring of sanctions Section 40 of the AML/CTF Act: FIs and DNFBPs must report to FASU any assets of a designated person or entity which it holds within 10 working days. The reporting form is prescribed and was issued in May 2019. Initiatives Undertaken

Year # of awareness Audience Places sessions 2016 10 General Public, Schools, (x6), (x1), Radio awareness (in Tok (x1) Pisin), Business Vanimo (x1), (x1) communities, FIs, DNFBPs, LEAs, NCC member agencies 2017 19 Port Moresby (x11), Lae (x5)

*FASU collaborates with Department of Justice & Attorney General, Royal Kokopo (x2), Madang (x1) PNG Constabulary, Investment 2018 13 Promotion Authority, PNG Customs, Port Moresby (x3), Lae (x3), PNG Law Society, Certified Practising Accountants, Real Estate Industry Madang (x1) Association, Transparency (x1), Vanimo (x1), International, Chamber of Commerce, etc (x1) (x1), (x1), Kokopo (x1) June 8 Port Moresby (x4), Lae (x3), 2019 Mt. Hagen (x1) Initiatives Undertaken

Year Initiative Purpose Outcomes

2016 AML/CFT Filter transactions by imbedding False positives. Can verify if FIs module on lists on the system/KATS mostly banks are using KATS screening tools. Volumes of transactions can be compared. 2017 NRA findings TF & PF risks low but must be Awareness, training and watched closely capacity building. Watch media and monitor open source 2017- Development -MoUs, (Customs, Police, National Maritime Authority Immigration, Fisheries & Forest 19 of Regulatory Authorities) engagement/shipping tools -Guidance register. -Compliance Rule and CDD Advisory notes for FIs & DNFBPs developed and issued -Intelligence database capacity -Interpol database -UN subscription on list updates for dissemination to FIs and DNFBPs and to relevant agencies and Public. Conclusion

❑ The designated TF and PF supervision mandate needs to be explicit. FASU supervises under border AML/CFT Act. ❑ Important to continue raising awareness and assisting the smaller FIs and DNFBPs in particular in terms of transaction monitoring and sanctions screening ❑ The SOP developed under UN Sanctions Act needs good awareness with all relevant stakeholders. ❑ Sanctions secretariat function must be resourced to administer the Act. ❑ Some strategic decisions to make to demonstrate effectiveness. QUESTIONS? Contact FASU

Postal Address: Financial Analysis and Supervision Unit Bank of Papua New Guinea P O Box 121 PORT MORESBY National Capital District Papua New Guinea

Telephone: 322 7147 Facsimile: 322 7239 Email: [email protected] Website: www.bankpng.gov.pg/about-us/amlcft-anti- money-laundering/