Australia’s Westpac Bank agreed to pay a A$1.3 billion fine on Thursday in a proposed settlement with the Australian Transaction Reports and Analysis Centre (AUSTRAC) for breaching the Anti-Money Laundering and Counter-Terrorism Financing Act of 2006 (AML/CTF Act) by failing to reasonably monitor suspicious transactions associated with possible child exploitation and terrorist networks.
AUSTRAC, the Australian Government’s agency responsible for identifying and enforcing abuses of the country’s financial system, applied for civil penalties against Westpac Bank in November 2019 alleging “systemic non-compliance” with the AML/CTF Act referencing over 23 million instances of the bank’s failure to implement proper monitoring of suspicious transactions flowing to and from areas associated with human trafficking and terrorist networks.
In its initial complaint, AUSTRAC alleged that Westpac failed to report over 19.5 million transfers of funds over a near five year period. Westpac allegedly failed to keep adequate records of the sources of such funds and did not pass on critical information or conduct appropriate due diligence throughout the chain of transfers across multiple banks. AUSTRAC alleged that Westpac’s systemic failures deprived law enforcement agencies of information relating to over A$11 billion in international payments.
“I’m pleased to say Westpac has commenced uplifting its AML/CTF controls and has taken urgent steps to close gaps and strengthen policies, data systems and processes. AUSTRAC will continue to work closely with Westpac to oversee and support this work,” Nicole Rose, AUSTRAC’s Chief Executive Officer, said in a statement.
The proposed settlement has been submitted to the court for approval. The next hearing is scheduled for October 21, 2020 before Justice Barry Rashleigh Beach, under file number NSD1914/2019.