Published: Fri, November 22, 2019
Markets | By Otis Pena

Australia's Westpac slapped with 23 mln money laundering breaches

Australia's Westpac slapped with 23 mln money laundering breaches

Austrac Leader Govt Nicole Rose mentioned Westpac's failure to correctly file the transfers undermined "the integrity of Australia's monetary machine" and "hindered its talent to trace down the origins of economic transactions, when required to toughen police investigations".

In a statement Tuesday, Westpac said it was "currently reviewing AUSTRAC's statement" and would "issue a further statement" to markets.

Ms Rose said Westpac's alleged failures resulted in serious and systemic breaches of anti-money laundering and counter-terrorism financing laws.

Rose said the breaches involved more than 19.5 million transactions, including "high-risk transactions to the Philippines and Southeast Asia concerning known financial indicators relating to potential child exploitation risks".

In a statement, Westpac CEO Brian Hartzer admits to the bank's culpability and pledges that it will work to improve and bolster the management of financial crime risks including strengthening policies, data feeding systems, processes and controls.

AUSTRAC accused Westpac, the country's second biggest bank, of a "serious and systemic non-compliance".

Westpac has been accused of poor oversight of its anti-money laundering and terrorism financing obligations, which has resulted in 23 million breaches of the anti-money laundering and counter-terrorism financing act.

Westpac is charged with maintaining relationships with offshore banks without assessing their business relationships or banking products, even when those banks disclosed relationships with "high risk" countries, including Iraq, Ukraine, Zimbabwe, and the Democratic Republic of Congo.

ANZ declined to comment, while NAB referred Reuters to a November 7 statement that it had reported an unspecified number of breaches to AUSTRAC and was working with the regulator.

Malta mogul arrested on yacht in journalist murder case
However, the boat was under surveillance and police swiftly stopped it and forced it to return to port, the sources said. But in company documents seen by AFP , Fenech resigned the post last week and was replaced by his brother Franco.

The agency also said there are a small number of potential transactions on the account associated with the "risk of exploitation of children".

Brian Hartzer said he was "utterly horrified" by accusations from AUSTRAC that Westpac had no due diligence around payments potentially funding child exploitation in Southeast Asia.

It argued Westpac did not put in force the vital computerized detection procedures on those transactions.

Following the announcement, shares for Westpac slumped by 2.2 per cent.

"It is disappointing that we have not fulfilled our individual benchmarks as properly as regulatory anticipations and needs", he defined in a assertion.

AUSTRAC declined to comment when asked by Reuters if it was conducting similar investigations on the other two of Australia's so-called Big Four banks, National Australia Bank and Australia and New Zealand Banking Group.

This follows the penalty paid by the Commonwealth Bank of Australia's (CBA) $700 million (AUD) previous year following breaches to AML and CTF laws including the failure to monitor thousands of transactions made through its smart ATMs.

The country's banking sector has also been the subject of a royal commission - Australia's highest form of public inquiry - that earlier this year exposed widespread wrongdoing in the industry.

Like this: