Westpac has settled a case with financial crime watchdog AUSTRAC regarding more than 23 million alleged breaches of anti-money laundering laws by paying a record $1.3 billion penalty.
The fine is the largest penalty in Australia’s corporate history.
Last year Australia’s financial crime watchdog AUSTRAC said the bank had failed to properly report 19.5 million International Funds Transfer Instructions (IFTIs), amounting to more than $11 billion.
AUSTRAC’s Chief Executive Officer, Nicole Rose PSM said the settlement sends a strong message to industry that the organisation will take action to ensure Australia’s financial system remains strong so it cannot be exploited by criminals.
“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,” Ms Rose said.
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“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.”
In summary, Westpac admitted that it failed to:
- Properly report over 19.5 million International Funds Transfer Instructions (IFTIs) amounting to over $11 billion dollars to AUSTRAC.
- Pass on information relating to the origin of some of the international funds transfers, and to pass on information about the source of funds to other banks in the transfer chain
- Keep records relating to the origin of some of these international funds transfers.
- Appropriately assess and monitor the risks associated with the movement of money into and out of Australia through its correspondent banking relationships, including with known higher risk jurisdictions.
- Carry out appropriate customer due diligence in relation to suspicious transactions associated with possible child exploitation.
The Federal Court of Australia will now consider the proposed settlement and penalty. If the Federal Court determines the proposed penalty is appropriate, the penalty order made will represent the largest ever civil penalty in Australian history.
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