The Federal Court of Australia declared in a statement on Wednesday that the Commonwealth Bank of Australia is to pay “the total sum of $700 million within 28 days of the date of this order.”
AUSTRAC brought charges against the big bank 10 months ago for contraventions of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).
The two parties came to an agreement on 4 June for CBA to pay, pending Federal Court approval, a civil penalty of $700 million as well as AUSTRAC’s legal costs of $2.5 million, representing “the largest ever civil penalty in Australian corporate history”.
The statement from the Federal Court noted that none of the contraventions were “the result of a deliberate intention” to breach the provisions.
“However, the contraventions were serious,” the court document said. “For example, the late threshold transaction reports and the failure to report suspicious matters (on time or at all) have deprived AUSTRAC and law enforcement agencies of intelligence to which they were and are entitled involving movements of several million dollars in cash.
“AUSTRAC and law enforcement agencies were denied timely intelligence on about $625 million in threshold transactions and on several million dollars in suspicious activity.
“The money laundered through the bank’s accounts included the proceeds of drug and firearms importation,” the statement said.
A statement by CBA said the bank “notes the approval by the Federal Court today of the agreement” and reiterated its fine of $700 million.
“AUSTRAC’s civil proceedings are otherwise dismissed,” the statement said.
“CBA will recognise a $700 million expense in its financial statements for the full year ending 30 June 2018, which will be released on 8 August 2018.”
On 5 June, Treasurer Scott Morrison defined the banks conduct as “egregious”.
A report by research house Morningstar the following day acknowledged CBA’s expensive fine but called it “immaterial”.
“Despite the seriousness of the AUSTRAC allegations and fines, we do not think they will significantly impact future profits,” the report said.
