PNG s Anti-Money Laundering & Counter Terrorist Financing Framework

Transcription

1 PNG s Anti-Money Laundering & Counter Terrorist Financing Framework Wilson Onea Deputy Director Financial Analysis and Supervision Unit (FASU) PNG s Financial Intelligence Unit (FIU)

2 Presentation Outline Part One PNG s AML/CTF System Part Two The Role of PNG s Financial Intelligence Unit - FASU

3 Who is APG? 42 member countries Committed to effective implementations and enforcement of 40 FATF Recommendation

4 Requirements to APG Membership Mutual Evaluations Peer review program on AML/CTF Standards Assess technical compliance to FATF s AML/CTF standards Assess Effectiveness of AML/CTF regime

5 Who is FATF? Peer review Peer pressure Real impacts A National Priority

6 2010 MER - 40 Recommendations Legal systems 1. ML offense PC 2. ML offense mental element and corporate liability PC 3. Confiscation and provisional measures PC Preventive measures 4. Secrecy laws consistent with the Recommendations LC 5. Customer due diligence NC 6. Politically exposed persons NC 7. Correspondent banking NC 8. New technologies & non face-to-face business NC 9. Third parties and introducers NC 10. Record-keeping PC 11. Unusual transactions NC 12. DNFBP R.5, 6, 8 11 NC 13. Suspicious transaction reporting PC 14. Protection & no tipping-off LC 15. Internal controls, compliance & audit PC 16. DNFBP R & 21 NC 17. Sanctions NC 18. Shell banks NC 19. Other forms of reporting C 20. Other DNFBP & secure transaction techniques 21. Special attention for higher risk countries NC 22. Foreign branches & subsidiaries NC 23. Regulation, supervision and monitoring NC 24. DNFBP regulation, supervision and monitoring 25. Guidelines & Feedback PC Institutional and other measures 26. The FIU NC 27. Law enforcement authorities PC 28. Powers of competent authorities PC 29. Supervisors NC 30. Resources, integrity, and training NC 31. National co-operation PC 32. Statistics NC 33. Legal persons beneficial owners PC 34. Legal arrangements beneficial owners PC International Cooperation 35. Conventions PC 36. Mutual legal assistance (MLA) PC 37. Dual criminality LC 38. MLA on confiscation and freezing LC 39. Extradition LC 40. Other forms of co-operation LC C NC

7 2010 MER - 9 Special Recommendations SR.I Implement UN instruments NC SR.II Criminalize terrorist financing PC SR.III Freeze and confiscate terrorist assets SR.IV Suspicious transaction reporting NC PC SR.V International cooperation PC SR.VI AML/CFT requirements for money/value transfer services PC SR.VII Wire transfer rules PC SR.VIII Nonprofits organizations SR.IX Cross-Border Declaration & Disclosure NC NC

8 Adoption of PNG s MER PNG s MER was adopted in July National Coordination Committee (NCC) was formed with various key heads of Dept. as members of the NCC by virtue of NEC Decision NG 150/2012 on 13 December Technical Working Group (TWG) was established to ensure the recommendations are implemented. Started with 15 agencies, now 18 agencies. Governor of BPNG and Secretary of DJAG are Co-chairs supported by Secretariat.

9 ICRG Process Lack of progress/compliance within a reasonable timeframe between Prima facie and targeted review showed slow progress. PNG was subjected to the ICRG (International Corporations Review Group) processes under FATF s review process. Grey list review for a period of 18 months February 2014 to August This meant that APG/FAFT member countries were be cautioned with their involvement/trade with PNG Sanctions maybe placed on PNG which may have wider economic implications for PNG.

10 ICGR Process In February 2014, Papua New Guinea made a high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies. Since June 2015, Papua New Guinea has taken steps towards improving its AML/CFT regime; include obtaining Parliamentary approval for a Criminal Code Amendment, an AML/CFT law, establishing a legal framework to require the freezing of terrorist assets and a cross-border declaration system.

11 ICGR Process In July 2015, PNG has obtained a Parliamentary approval for a suite of five (5) AML/CTF Bills to address all the AML/CFT deficiencies. In 4 th February 2016, the suite of five AML/CTF legislations were certified and gazetted. These suite of AML/CTF Acts includes; 1. Anti-Money Laundering and Counter Terrorist Financing Act 2015, 2. Criminal Code (Money Laundering and Terrorist Financing)(Amendment) Act 2015, 3. Mutual Assistance in Criminal Matters (Amendment) Act Proceeds of Crime (Amendment) Act 2015 and 5. United Nations Financial Sanctions Act 2015.

12 FATF Grey list Process I. PNG was delisted in June 2016 I. PNG is regarded as the fastest reforming country in the Asia-Pacific on AML/CTF Technical Reform (effectiveness not yet assessed) II. Significant ongoing work on the implementation of AML/CTF reform is critical in the next 5 years

13 Highlight: Removal of PNG from FATF grey-list June 2016

14 Financial Analysis and Supervision Unit (FASU) Papua New Guinea s Financial Intelligence Unit now called Financial Analysis and Supervision Unit (FASU) The AML/CTF Act 2015 establishes the FASU within the Bank of Papua New Guinea (BPNG) and it is operationally independent. FASU replaces the previous Financial Intelligence Unit (FIU) established under the Proceeds of Crime Act 2005 (POCA). The AML/CTF Act 2015 specifies that FASU has a role of protecting PNG against ML and TF activities for a strong and cohesive AML/CTF regime.

15 Supervision Structure - PAST BPNG Insurance Commission Securities Commission National Gaming Board Investment Promotion Authority Banks Insurance Companies and actors Stock exchange Casinos Companies Other licensed institutions Brokers Non profit Organisations Key issues: Supervision responsibility is not this clear Business Names Inconsistent application of AML/CTF standards Legislative powers for monitoring and compliance not clear between sectors

16 Supervision Structure - PRESENT FASU in BPNG as sole supervisor FASU supervises all financial institutions and DNFBPs in this national AML CTF regime

17 FASU Structure Director Deputy Director AML/CTF Supervision and Compliance Division AML/CTF Intelligence Management Division AML/CTF Policy Development and Coordination Division

18 FASU Two Operational Functions + Policy and Strategy Financial Intelligence Collection, Analysis and Dissemination Supervision and Compliance with AML/CTF Act FASU will also contribute to PNG s whole-of-government AML/CTF policy and implementation Cohesive AML/CTF Reporting and Compliance Regime

19 Who is Supervised by FASU? Financial Institutions DNFBPs i. banks ii. foreign subsidiaries of banks iii. credit institutions, insurance companies agents/brokers/underwriters iv. investment banks v. mortgage companies vi. money changers vii. superannuation/fund managers viii. charities i. real estate agent ii. a motor vehicle dealer iii. a dealer in precious metals iv. a dealer in precious stones v. a lawyer vi. notary public or other independent legal professional vii. a trust or company service provider viii. an accountant

20 FASU - POWERS The new regime introduces a range of powers to help FASU undertake its roles including: 1) Conduct on site inspections 2) Work with law enforcement to facilitate investigations on breaches of the Act 3) Request additional information from financial institutions 4) Seek production of records 5) Issue risk assessments and typology reports 6) Issue AML/CTF compliance rules 7) Share financial intelligence domestically and internationally

21 Enforcement - Penalties The new regime introduces a range of compliance measures including: 1. Notices issuance of formal notices and formal warnings 2. Undertakings on the part of an institution to remedy a breach 3. External auditor appointment can be requested by FASU 4. Remedial directions to remedy a contravention of a civil penalty provision in this Act 5. Fines and imprisonment for significant or ongoing non-compliance

22 Next Steps Awareness and educational forums on AML/CTF Obligations to be continued FASU establishment (done) National Risk Assessment (done) Develop national AML/CTF strategic plan (done) Develop and strengthen capacity (on-going) Develop and enhance relations (on-going) Upgrade on status of non-compliance on FATF standards- APG plenary (2018) Egmont Membership (2018) Supervision & Compliance (on-going) Develop Financial Intelligence- Investigations & Prosecutions (in progress & on-going) Continue to purse and sustain PNGs domestic & international AML/CTF obligations

23 Conclusion AML/CTF: What is in it for YOU? Protecting your family Protecting you community Protecting your organization Protecting the integrity of PNGs Financial System

24 For More Information Contact FASU on the following contact details: Financial Analysis and Supervision Unit P O Box 121 Port Moresby 121 National Capital District Papua New Guinea Telephone: Facsimile: or fasu@bankpng.gov.pg webpage/site:

25 Thank you