Six questions about greylisting that every Papua New Guinean business exec should be asking

In February 2026, the Financial Action Task Force (FATF) placed PNG on its “grey list” of jurisdictions under increased monitoring. PNG has committed at a political level to fixing strategic deficiencies, but its systems for detecting and prosecuting money laundering and terrorist financing are not yet meeting global standards.

Unfortunately, the effectiveness of prosecutions, asset seizures, or the quality of suspicious matter reporting could not be demonstrated to the FATF and greylisting is the consequence.

“Many business owners assume greylisting is a problem only for banks. It is not.”

Why the machinery failed

Compliance is often treated as a box-ticking exercise rather than a core business function, particularly in smaller, non-banking businesses. Staff have not traditionally had formal risk assessment frameworks or training, have no structured approach to customer due diligence, and are rarely given the seniority or board access needed to escalate concerns.

This is not a criticism of individuals. It is a failure of organisational design. When compliance sits in a corner with no budget, no technology, and no mandate from the board, the outcome is fairly predictable.

The net is wider than you think

Many business owners assume greylisting is a problem only for banks. It is not. Under the AML/CTF Act 2015, the Financial Analysis and Supervision Unit’s (FASU, a unit of the Bank of Papua New Guinea) reach extends to every commercial bank, microfinance institution, savings and loan society, and finance company. But it goes well beyond financial services.

High-value goods dealers, including motor vehicle dealers, heavy machinery suppliers, marine craft sellers, and gold exporters, are reporting entities if they receive cash payments of K20,000 or more. So are law firms, accounting practices, real estate agencies, and trust and company service providers.

Cash-intensive wholesalers, supermarket chains, and remittance operators are squarely in scope. Logging companies and agricultural exporters handling large volumes of cash at the farm gate face particular scrutiny, with illegal logging identified by the Bank of Papua New Guinea as one of the country’s top five money laundering risks.

If your business handles significant cash, facilitates high-value transactions, or provides professional services that could be used to obscure the origins of funds, you are a reporting entity with statutory obligations.

Getting compliance-ready

If you are a business owner, board member or executive at a reporting entity, you should be able to answer “yes” to each of the following right now:

1. Are you registered with FASU? Registration is mandatory. Failure to register carries fines of up to K50,000.
2. Do you have a written ML/TF risk assessment? Not a generic template. A risk assessment specific to your business, your sector, and your customer base, reviewed and updated periodically.
3. Is your AML/CTF programme board-approved? If your compliance officer cannot point to a signed, dated approval from management, you have a gap.
4. Are you conducting proper customer due diligence? Identity verification for all customers and beneficial owners is statutory. Reckless failure attracts fines of K500,000. Intentional failure: K1 million and up to five years imprisonment.
5. Are you meeting your reporting obligations? Cash transactions over K20,000 must be reported within 10 days. Suspicious matters must be reported immediately.
6. Can you produce seven years of records on demand? All customer identification data, transaction records, and compliance documentation must be retained for a minimum of seven years.

John Burke, Managing Director of Kyudo. Credit: Kyudo

The takeaway

Greylisting is not permanent, but its effects on your business are immediate.

International banks are already applying enhanced due diligence to PNG transactions: slower payments, higher costs on trade finance, and in some cases, outright refusal to process transfers. If your business depends on importing goods, paying overseas suppliers or receiving foreign investment, these delays hit your bottom line now.

At the same time, FASU has the power to conduct on-site inspections, impose fines of up to K1 million, and refer matters for criminal prosecution. The businesses that move first will retain their banking relationships and stay ahead of the regulator. Those that wait risk being caught from both directions: locked out by their bank and pursued by FASU.

John Burke is the Managing Director of Kyudo Growth, a management consulting firm based in Port Moresby and Brisbane, Australia. Kyudo specialises in AML/CTF compliance for PNG businesses.