Post by anenro on Sept 24, 2020 17:34:15 GMT 4
Westpac settles AUSTRAC money laundering case with record A$1.3 billion fine
Westpac has reached a deal with financial crime watchdog AUSTRAC to settle more than 23 million alleged breaches of anti-money laundering laws by paying a record $1.3 billion penalty.
The penalty is the biggest in Australian corporate history, and is almost double the previous record $700 million fine paid by the Commonwealth Bank for almost 54,000 money laundering breaches, revealed by the ABC in 2017.
In a statement, AUSTRAC said Westpac had admitted to breaching the Anti-Money Laundering and Counter-Terrorism Financing Act more than 23 million times.
These breaches included a failure to properly report more than 19.5 million international funds transfer instructions (IFTI) amounting to more than $11 billion.
AUSTRAC said the breaches included suspicious transactions associated with possible child exploitation as well as failure to assess risks of money laundering and terrorism financing.
“Our role is to harden the financial system against serious crime and terrorism financing and this penalty reflects the serious and systemic nature of Westpac’s non-compliance,” AUSTRAC chief executive Nicole Rose said in the statement.
“Westpac’s failure to implement effective transaction monitoring programs, and its failure to submit IFTI reports to AUSTRAC and apply enhanced customer due diligence in relation to suspicious transactions, meant AUSTRAC and law enforcement were missing critical intelligence to support police investigations.”
AUSTRAC had initially identified a dozen specific customers who had made suspicious transactions to the Philippines that were indicative of child exploitation activities.
However, a further review of historical transactions by Westpac in conjunction with the regulator found a further 250 customers with suspicious transactions to the Philippines, South-East Asia or Mexico — all of which should have been picked up much earlier if Westpac had proper monitoring systems in place.
In a statement, Westpac’s chief executive Peter King once again apologised for the contraventions.
“We are committed to fixing the issues to ensure that these mistakes do not happen again. This has been my number one priority,” he said.
“We have also closed down relevant products and reported all relevant historical transactions.”
‘Massive failure’
Treasurer Josh Frydenberg welcomed the settlement.
“This is a very significant penalty, and it reflects the significance of the offences here,” he told ABC Radio Melbourne.
“This should not have happened.
“Westpac are obviously taking steps to ensure it doesn’t happen again, but it’s also a message to all other financial institutions that AUSTRAC will take action where necessary to ensure that the law is complied with.”
Shadow Home Affairs Minister Kristina Keneally described Westpac’s announcement as “extraordinary”, and the bank’s lack of appropriate financial monitoring as a “massive failure”.
“What is incredibly distressing was the extent to which some of this money laundering appears to have been linked to child sexual exploitation,” Senator Keneally said.
She demanded the government push ahead with reforms to further strengthen anti-money laundering laws.
Westpac has reached a deal with financial crime watchdog AUSTRAC to settle more than 23 million alleged breaches of anti-money laundering laws by paying a record $1.3 billion penalty.
The penalty is the biggest in Australian corporate history, and is almost double the previous record $700 million fine paid by the Commonwealth Bank for almost 54,000 money laundering breaches, revealed by the ABC in 2017.
In a statement, AUSTRAC said Westpac had admitted to breaching the Anti-Money Laundering and Counter-Terrorism Financing Act more than 23 million times.
These breaches included a failure to properly report more than 19.5 million international funds transfer instructions (IFTI) amounting to more than $11 billion.
AUSTRAC said the breaches included suspicious transactions associated with possible child exploitation as well as failure to assess risks of money laundering and terrorism financing.
“Our role is to harden the financial system against serious crime and terrorism financing and this penalty reflects the serious and systemic nature of Westpac’s non-compliance,” AUSTRAC chief executive Nicole Rose said in the statement.
“Westpac’s failure to implement effective transaction monitoring programs, and its failure to submit IFTI reports to AUSTRAC and apply enhanced customer due diligence in relation to suspicious transactions, meant AUSTRAC and law enforcement were missing critical intelligence to support police investigations.”
AUSTRAC had initially identified a dozen specific customers who had made suspicious transactions to the Philippines that were indicative of child exploitation activities.
However, a further review of historical transactions by Westpac in conjunction with the regulator found a further 250 customers with suspicious transactions to the Philippines, South-East Asia or Mexico — all of which should have been picked up much earlier if Westpac had proper monitoring systems in place.
In a statement, Westpac’s chief executive Peter King once again apologised for the contraventions.
“We are committed to fixing the issues to ensure that these mistakes do not happen again. This has been my number one priority,” he said.
“We have also closed down relevant products and reported all relevant historical transactions.”
‘Massive failure’
Treasurer Josh Frydenberg welcomed the settlement.
“This is a very significant penalty, and it reflects the significance of the offences here,” he told ABC Radio Melbourne.
“This should not have happened.
“Westpac are obviously taking steps to ensure it doesn’t happen again, but it’s also a message to all other financial institutions that AUSTRAC will take action where necessary to ensure that the law is complied with.”
Shadow Home Affairs Minister Kristina Keneally described Westpac’s announcement as “extraordinary”, and the bank’s lack of appropriate financial monitoring as a “massive failure”.
“What is incredibly distressing was the extent to which some of this money laundering appears to have been linked to child sexual exploitation,” Senator Keneally said.
She demanded the government push ahead with reforms to further strengthen anti-money laundering laws.