The regulator said Westpac failed to introduce “appropriate detection scenarios to detect known child exploitation typologies, consistent with Austrac guidance and their own risk assessments.”
Austrac chief executive Nicole Rose said in a statement: “”These AML/CTF laws are in place to protect Australia’s financial system, businesses and the community from criminal exploitation. Serious and systemic non-compliance leaves our financial system open to being exploited by criminals.”
Austrac said in a statement the bank had failed to report more than 19.5 million “international funds transfer instructions” (IFTIs) over nearly five years. It said late IFTIs from four correspondent banks represented more than 72 per cent of all incoming IFTIs received by Westpac.
Westpac acknowledged the regulator’s lawsuit in a statement, noting that it had previously disclosed the large number of breaches in its financial results. The bank said it would review the regulator’s statement of claim and make a further statement to the investors at a later time.
Ms Rose said that the international funds transfers Westpac failed to report added up to more than $5 billion over five years.
Austrac also said the bank had failed to pass on information about the source of funds to other banks, it kept inadequate records, and did not carry out adequate customer due diligence on transactions to the Philippines and South East Asia.
Breaches of the AML/CTF attract hefty penalties, with the Commonwealth Bank previously copping a $700 million fine, the biggest in Australian corporate history, for a mass breach of the Act.
The regulator noted that Westpac had disclosed the failures in its reporting, and it said the bank had co-operated with investigations and it was improving its controls for anti-money laundering compliance.
More to come