Smuggling a major problem in PNG

By MALUM NALU
SMUGGLING is a major problem in Papua New Guinea, according to a paper presented at a PNG Institute of Banking and Business Management (IBBM) seminar in Port Moresby on Wednesday.
Dr R Bhaskara, chief executive officer of the Indian Institute of Banking and Finance, told a PNG Institute of Banking and Business Management (IBBM) on Wednesday that PNG lacked resources and manpower to control money laundering, which could easily be done through borders.
His words confirm what The National has been reporting over the last couple of weeks, especially as to the lack of control of goods coming into PNG from Indonesia through the Wutung Border Post in West Sepik province,
“Transshipment of drugs and other illegal goods en route to Australia is increasingly considered an emerging risk,” Bhaskara said.
“Limited PNG capacity in border control and the presence of organised crime groups pose significant risks or money laundering.
“PNG relies on assistance from Australia to deter illegal cross-border activities primarily from Indonesia, including illegal narcotics trafficking.
“Papua New Guinea’s legal system is still developing and transitioning from a traditional law and order system based on tribal seniority and indigenous customs,” he said.
“Western-style legislation is being generated, but enforcing agencies significantly lack the training, funding, assets, experience, and, in many cases, education to successfully combat sophisticated organised crime.
“Australian authorities partner closely with PNG counterparts to advise and build capacity in these regards.
“PNG interagency cooperation also needs improvement.
“Papua New Guinea has criminalised terrorist financing in the form of ‘support’ to a terrorist act.
“The law does not fully meet international standards.”
Bhaskara said in practice, only the banking sector had been made aware of suspicious transaction report (STR) and currency transaction report (CTR) reporting obligations.
“No financial intelligence reporting is taking place beyond the banking sector nor is there a clear obligation to perform customer due diligence procedures for any institutions,” he said.

“While the financial intelligence unit (FIU) is building its capacity, there is no clear political commitment to ‘follow the money’ to tackle corruption and other crimes, and no demonstrated commitment to regulate and supervise anti-money laundering/counter-terrorist financing (AML/CFT) obligations by financial sector regulators, which severely hampers the authorities’ ability to tackle financial aspects of corruption.
“The government of Papua New Guinea should continue its work to develop procedures to conform to international AML/CFT standards.”