Australia’s Westpac Nailed For 23M AML Violations

Aussie banking giant Westpac was accused of violating anti-money laundering (AML) laws 23 million times, Reuters reported on Tuesday (Nov. 19).

The country’s financial crime watchdog Australian Transaction Reports and Analysis Center (AUSTRAC) said Westpac ignored warning signs and allowed payments from convicted child sex offenders and from countries known as being high risk.

The country’s biggest money-laundering abuse could nail Westpac with up to $14 million in fines (A$21 million) for every breach — a potential $322 trillion (A$423 trillion) total.

“These contraventions are the result of systemic failures in its control environment, indifference by senior management and inadequate oversight by the Board,” AUSTRAC said in the court filing.

Westpac reported the breaches to AUSTRAC and shuttered the service that allowed customers and affiliate overseas banks to process payments from Australia.

“Like everyone who has read the statement of claim, I am personally disgusted and appalled,” Westpac CEO Brian Hartzer said on a call with reporters. He added that the bank “should have done better.”

Last year, the Commonwealth Bank of Australia paid a record A$700 million in fines after allowing 53,750 payments that violated similar protocols.

“Serious and systemic non-compliance leaves our financial system open to being exploited by criminals,” Nicole Rose, chief executive for AUSTRAC, told the news outlet Xinhuanet.com.

“The failure to pass on information about international funds transfer instructions to AUSTRAC undermines the integrity of Australia’s financial system and hinders AUSTRAC’s ability to track down the origins of financial transactions when required to support police investigations,” Rose added.

Hartzer said in a statement that the bank realizes the serious nature of the issues at hand and will help regulators work to stop financial crime.

“It is a fairly damning indictment about some of the processes and procedures they have had in place,” Australian Prime Minister Scott Morrison told the news outlet. “They have just got to lift their game.”

Money laundering has always troubled financial institutions, but today’s digital banking system creates additional complexities as fraudsters around the world take advantage of financial technologies.