The board of CBA released a statement yesterday addressing AUSTRAC’s civil case alleging 53,000 contraventions of the AML/CTF legislation regarding the bank’s ‘intelligent deposit machines’ (IDMs), which allowed criminal syndicates to launder money overseas.
The statement, released in conjunction with the bank’s announcement of a full-year $9.88 billion profit, said CBA “promptly fixed” the coding error relating to the threshold transaction reporting (TTR) by the IDMs when it became aware of it in 2015.
The CBA board also said it had “changed senior leadership in key roles overseeing financial crimes compliance”, recruited 50 financial crime compliance professionals and invested $40 million in new technology since 2015.
CBA chair Catherine Livingstone has also established a “dedicated sub-committee” of four directors that will “oversee the response to AUSTRAC’s statement of claim and the ongoing execution of the program of action”.
Ms Livingstone said the CBA board will take an “active role in addressing any further management accountability for the alleged actions of omissions”.
Answering questions at a results presentation yesterday, CBA chief executive Ian Narev referenced the “changes” in senior leadership but refused to confirm if anyone at the bank had been fired as a result of the compliance breaches.
Mr Narev said that when the IDMs were first rolled out in May 2012, they provided the TTRs as required by AUSTRAC.
“The first catalyst for this range of issues which are now the subject of the [AUSTRAC] claim was a report from [the regulator] that we had not submitted two TTRs in August 2015,” Mr Narev said.
“Previous to that … some branch people had noticed some activity which was very quickly looked at as well, and in August 2015 AUSTRAC told us they had seen two TTRs not provided.
“We then took that away, did our own work, and gave an answer not on the two but volunteered to AUSTRAC that in fact 51,000 had not been submitted, immediately fixed the problem, and then three or four weeks later retrospectively submitted all the threshold transactions that should have been submitted.”
The board of CBA announced on Tuesday it was cutting the bonuses for Ian Narev and his executive team to zero for the 2016-17 financial year.
Mr Narev refused to say if he had offered his resignation to CBA chair Catherine Livingstone, saying conversations between the two would remain private.
