Westpac – one of Australia’s big four banks – has admitted to breaching the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 more than 23 million times.
In a statement released by the Australian financial crime watchdog, the Australian Transaction Reports and Analysis Centre (AUSTRAC), the breaches are said to include more than 19.5 million international funds transfer instructions (IFTI) with a value of over $11 billion (between 2013 and 2019), plus suspicious transactions associated with possible child exploitation and a failure to assess the risks of money laundering and terrorism financing.
In a record-breaking deal reached with AUSTRAC, Westpac has agreed to pay a penalty of $1.3 billion, the biggest in Australian corporate history and almost double the $700 million fine copped by Commonwealth Bank for around 54,000 money laundering breaches in 2017.
In a statement released by AUSTRAC, Chief Executive, Nicole Rose, said, “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.”
Westpac has apologised for its failings and have pledged to tighten their compliance processes to ensure the crimes won’t be repeated.
Treasurer Josh Frydenberg is in support of the penalty, and says “Westpac are obviously taking steps to ensure it doesn’t happen again, but it’s also a message to all other financial institutions that AUSTRAC will take action where necessary to ensure that the law is complied with.”
How organisations can comply with money laundering legislation?
The aim of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 is to prevent money laundering and the financing of terrorism. It does this by imposing a range of obligations on the financial sector (among others) including verifying information that confirms a customer’s identity and financial history when providing services. This is otherwise known as ‘Know Your Client’, or KYC.
While KYC protects an organisation from risk, it also protects the wider community by ensuring financial institutions aren’t facilitating (often unknowingly) criminal activity and/or terrorism.
To remain compliant, and protect themselves and the community from risk, financial institutions must run thorough due diligence on all their clients. They can do this by running a package of background checks.
Most useful to comply with KYC are anti-money laundering (AML), bankruptcy and financial regulatory check, however credit default, credit history and business interests checks can also be added to get a complete picture of the people you do business with.
To ensure every box is ticked, CVCheck offers a tailored suite of finance checks that include bankruptcy, AML, business interest, financial regulatory, credit default, and police or criminal record checks.
For more information, speak to a CVCheck background screening expert today.
Image source: Australian Broadcast Corporation.