Westpac to pay $1.3 billion fine to settle money laundering charges with AUSTRAC

Westpac Banking Corporation announced reaching an agreement with the Australian Transaction Reports and Analysis Centre (AUSTRAC for 23 million alleged breaches of anti-money laundering laws. The bank agreed to pay $1.3 billion to settle the charges in the biggest penalty in Australian corporate history.

The agreement is now wedding for the approval of the Federal Court of Australia.

In its statement, AUSTRAC said:

In reaching today’s agreement, Westpac has admitted to contravening the AML/CTF Act on over 23 million occasions, exposing Australia’s financial system to criminal exploitation.

The breaches include failing to properly report over 19.5 million international funds transfer instructions (IFTI) which amounted to more than $11 billion.

Among the breaches is also included suspicious transactions connected to possible child exploitation as well as failure to assess risks of money laundering and terrorism financing.

AUSTRAC’s Chief Executive Officer, Nicole Rose PSM commented:

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.


Rose continued:

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.

In the original statements against Westpac, the Australian watchdog AUSTRAC identified a dozen of customers who made suspicious transactions to the Philippines that were associated with child exploitation activities.

However, a subsequent review showed 250 more customers who made suspicious transactions to the Philippines, other parts of South-East Asia and Mexico. All of these should have been identified much earlier had Westpac implemented a proper monitoring system.

Westpac’s chief executive Peter King said:

We are committed to fixing the issues to ensure that these mistakes do not happen again. This has been my number one priority.

We have also closed down relevant products and reported all relevant historical transactions.

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