Westpac Banking Corporation (WBC) has agreed to pay a record A$ 1.3 billion fines to settle AML/CTF law violations charges filed by the Australian Transaction Reports and Analysis Centre (AUSTRAC).
24 September 2020 | AtoZ Markets – Westpac or WBC is Australia’s oldest bank and financial services company. Founded in 1817, it is one of Australia’s four largest banks. The bank serves more than 13 million customers worldwide, with 1,429 branches and 3,850 ATMs.
Westpac and AUSTRAC Agree to Settle AML/CTF Violation Charges
Westpac Banking Corporation (WBC) has agreed to settle the charges with financial crime regulator AUSTRAC by paying a A$1.3 billion penalty. If the federal court finds this penalty appropriate, it will be Australia’s largest civil penalty. AUSTRAC’s Chief Executive Officer, Nicole Rose PSM, said:
“Our role is to harden the financial system against serious crime and terrorism financing. This penalty reflects the serious and systemic nature of Westpac’s non-compliance.”
Last year, AUSTRAC accused the banks of violating AML/CTF laws more than 23 million times. The Financial Crime regulator noted that the bank did not properly report more than 19 million international transactions between 2013 and 2019. Ms. Rose 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 about suspicious transactions. It means AUSTRAC and law enforcement were missing critical intelligence to support police investigations.”
According to AUSTRA, there were quite a few payments in accounts that could lead to the risk of child exploitation. Banks also failed to keep records properly. Moreover, it did not conduct due diligence checks with potentially high-risk foreign banks.
Nicole Rose said, “We have been, and will continue to work collaboratively with Westpac and all businesses we regulate to support them to meet their compliance and reporting obligations to ensure this doesn’t happen again in the future.”
The bank said Westpac’s end-to-end technology system failure caused the error in recording payment information. The bank has also admitted about 76,000 additional breaches. However, AUSTRAC’s findings have forced the former chairman and CEO to leave. Shareholders also questioned the incompetence of the former chairman.
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