Money & Banking

Australian bank Westpac to pay record $920 million fine to settle money laundering case

Hemani Sheth Mumbai | Updated on September 24, 2020 Published on September 24, 2020

The lawsuit revealed over 23 million breaches of the country’s Anti-Money Laundering and Counter-Terrorism Financing Act, 2006

Westpac, one of Australia’s largest banks, on Thursday announced that it had reached an agreement with the Australian government’s financial intelligence agency Australian Transaction Reports and Analysis Centre (AUSTRAC) to settle a civil lawsuit.

Westpac has agreed to pay a civil penalty A$1.3 billion ($920 million). The lawsuit revealed over 23 million breaches of the country’s Anti-Money Laundering and Counter-Terrorism Financing Act, 2006.

AUSTRAC had begun civil proceedings against Westpac in November last year.

According to an official release by the country’s financial crime watchdog, Westpac failed to report over 19.5 million International Funds Transfer Instructions (IFTIs) amounting to over A$11 billion.

It had also failed to pass on important information about the origin of some of these international fund transfers and the sources of funds transferred to other banks in the transfer chain. It had also failed to keep records of some of these international transactions.

The bank also admitted to having failed to “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”.

Other charges include failure to “carry out appropriate customer due diligence in relation to suspicious transactions associated with possible child exploitation.”

In addition, Westpac had also admitted to contravening the law an additional 76,000 times.

“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’s Chief Executive Officer, Nicole Rose PSM, said.

“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,” she added.

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Published on September 24, 2020
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