Westpac agrees to record AUD 1.3bn fine for AML failures
Westpac, one of Australia’s largest banks, has agreed to pay a record AUD 1.3 billion fine for money laundering breaches.
Westpac breached AML laws more than 23 million times
The bank failed to adequately report more than 19 million international transactions, some of which are linked to child exploitation rings. It disclosed details of the breaches in a May 2020 court filing.
AUD 11 billion in payments went unreported. The bank also failed to keep records related to the origin of the transactions, or carry out “appropriate customer due diligence”.
Westpac has also admitted to approximately 76,000 additional contraventions which expand the original statement of the claim.
These fresh claims include “failures to reasonably monitor customers for transactions related to possible child exploitation”, and “further failures to assess money laundering and terrorism financing risks”.
Fears about child exploitation came after Austrac recognised payments to suspected operators in the Phillipines.
If Australian courts approve the fine it will rank as the largest civil penalty awarded in Australian corporate history.
Local Australian media has since linked the payments to a string of individual cases.
A light fine
According to the Australian Transaction Reports and Analysis Centre (Austrac), Westpac breached the law 23 million times.
A single breach of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 usually carries a maximum penalty of AUD 21 million.
Austrac CEO Nicole Rose says that the bank’s failure to implement transaction monitoring programmes meant law enforcement missed “crucial intelligence”.
Rose adds that such a large number of breaches over several years is unacceptable. She says better assurance and oversight processes would have caught issues.
“I would like to apologise sincerely for the bank’s failings,” writes Westpac group CEO Peter King in a statement.
According to King, Westpac has closed down relevant products and reported all historical transactions.
“We are strengthening our financial crime responsibility,” he continues. “We are determined to continually lift our financial crime standards, comply with our obligations and uphold […] expectations.”
Related: Regulators’ “fast and furious” AML fines don’t tell the whole compliance story
