AML

Aussie Regs Hit Westpac With Record $920M AML Fine

Westpac

Australian banking giant Westpac has agreed to a massive fine of $920 million ($1.3 million in Australian dollars) in a bid to put a money-laundering scandal behind it.

AUSTRAC, the country’s financial regulator, announced the deal on Thursday (Sept. 24), noting that Westpac had violated anti-money laundering (AML) and terrorism financing regulations more than 23 million times.

In particular, Westpac failed to “properly report” the transfers of international funds amounting to 19.5 million transactions totaling more than $7.7 billion.

The bank also failed to pass on information about the source of some of international funds transfers to other bank, or to keep records on where some of these transfers came from.

Westpac also failed to properly vet “suspicious transactions associated with possible child exploitation,” or to adequately monitor potential money laundering risks stemming from corresponding banking relationships, including those “with known higher-risk jurisdictions,” AUSTRAC said in a press release.

The proposed fine now has to be approved by Australian courts, with the potential to be the largest single banking penalty in the country’s history, CNN reported.

“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 CEO Nicole Rose said in the press release.

“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,” Rose added.

For its part, Westpac pledged to make a series of changes to “ensure these mistakes do not happen again,” said CEO Peter King in a press release.

Westpac said it has hired 200 experts in financial crime to beef up its oversight of money transfers, while creating a new “group executive” position to oversee its compliance efforts.

“I would like to apologise sincerely for the bank’s failings,” King said in a statement. “We are committed to fixing these issues to ensure that these mistakes do not happen again. This has been my number one priority.”

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