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PORT MORESBY, Papua New Guinea (PNG Post-Courier, Jan. 3) – Foreign companies operating in Papua New Guinea have been warned that if they are found guilty of operating illegally, they could face severe penalties.

Investment Promotion Authority (IPA) managing director Ivan Pomaleu issued the stern warning after the Supreme Court confirmed a finding that a foreign company had been operating without certification.

The company had also carried on business in an activity reserved for citizens or national enterprises.

Under the IPA Act, all foreign enterprises operating in PNG must be certified by the authority to carry on business in the country. The maximum penalty under the Act for offenders is PGK100,000 [US$35,500] .

The National Court in 2001 found the company in question to be involved in the scrap metal business, an activity that is reserved for citizens under the then Reserved Activities List prescribed in the IPA Act and Regulation.

The company and its secretary were fined K70,000 by the National Court, but the fine was reduced to K50,000 for the company secretary on the basis that the company did not make a profit.

"The National and Supreme Court decisions form a landmark case for the authority and should be taken as a warning to all uncertified foreign enterprises carrying out business in the country or engaged in business activities that are reserved for citizens," Mr Pomaleu said. "There are lots of similar cases out there."

Mr Pomaleu said the amount of fine imposed on the company and its secretary signified the seriousness of the offence.

He said any foreign enterprise conducting business in the country illegally and prosecuted can expect such penalties.

Mr Pomaleu said that under the IPA Act 1992 all foreign enterprises must first apply and be granted a certificate by the authority before they could lawfully carry out business in this country.

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