Remote VASP serving residents in Papua New Guinea

Currently, neither a specific registration nor a licensing regime exists for VASPs.

Anticipated Future: Based on FATF recommendations, it is highly probable that PNG will eventually adopt a licensing regime for VASPs. The FATF standards recommend that VASPs be licensed or registered, and subject to effective systems for monitoring and ensuring compliance with AML/CTF requirements. Licensing typically implies a more rigorous pre-approval process and ongoing supervision than simple registration.

Local Presence: For foreign entities, a local physical presence, a local board of directors, or a local registered company structure is often a requirement for financial licenses.

Identify and verify customers (KYC).

Conduct ongoing customer due diligence.

Monitor transactions for suspicious activity.

Report suspicious transactions to FASU.

Implement robust risk-based AML/CTF programs.

Adhere to the "travel rule" for VA transfers, requiring information sharing between VASPs.

Cryptocurrency Exchanges: Would fall into this gap. If a business sought to offer traditional securities exchange services, it would require licenses under the Securities Commission of Papua New Guinea (if established for this purpose) or relevant financial market laws. However, crypto assets are not typically classified as securities under existing PNG law.

Custody Providers: Similarly, no specific license for crypto custody. Traditional trust or financial services licenses might be considered, but these are not designed for digital assets.

Designated Person/Entity Screening: VASPs must screen their customers (both at onboarding and on an ongoing basis) against the UN Consolidated Sanctions List, which includes individuals and entities designated under various UN sanctions regimes (e.g., terrorism, proliferation, specific country regimes).

Asset Freezing: If a VASP identifies that it holds assets (including virtual assets) belonging to a designated person or entity, it must immediately freeze those assets and report the match to FASU.

Suspicious Transaction Reporting (STR): Any transaction involving designated persons, or transactions suspected of being related to money laundering or terrorist financing, must be reported to FASU.

Extraterritorial Reach: OFAC and EU sanctions can have extraterritorial effects, particularly if transactions involve:

Correspondent Banking Relationships: PNG financial institutions (and potentially VASPs dealing with them) rely on correspondent banking relationships with US and European banks, which impose their own OFAC/EU compliance requirements.

Reputational Risk: Failing to comply with major international sanctions regimes like OFAC or EU can lead to severe reputational damage, de-risking by international partners, and exclusion from global financial systems.

None explicitly as reporting entities under the current AML/CTF Act 2015.

Consequently, VASPs are not explicitly designated as "reporting entities" or "financial institutions" under the current AML/CTF framework. This means they are generally not subject to AML/CTF obligations, including the Travel Rule.

The APG MER specifically notes that PNG needs to take steps to license or register VASPs and subject them to the full range of AML/CTF obligations.

Outcome: The BPNG clarified that cryptocurrencies are not legal tender in PNG. They highlighted risks such as volatility, lack of regulation, potential for scams, and use in illicit activities. The statement advised the public to exercise caution and warned that losses would not be protected by PNG laws. It also indicated the BPNG's intention to develop appropriate regulations for digital assets in the future. This warning has generally underpinned the BPNG's ongoing stance.

Statements are often general and not tied to a single "action" URL, but reflect ongoing policy. For example, the BPNG's Annual Reports or public addresses often touch upon these topics. The above 2021 notice remains the foundational document. News articles frequently refer back to this stance: