Papua New Guinea’s central bank has found the country’s largest lender, BSP, in breach of anti-money laundering safeguards.

The regulator issued a “formal warning” against BSP under the country’s anti-money laundering law and sanctioned senior staff at the bank. But observers argued the enforcement action was too weak and could imperil PNG’s correspondent banking relationships.

The Bank of Papua New Guinea’s financial crime unit stopped short of recommending a criminal prosecution. In a July