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Drug money ‘a complete surprise’ to CBA

Drug money ‘a complete surprise’ to CBA

James Mitchell
— 1 minute read

CBA boss Matt Comyn has admitted that the bank was “congratulating” itself on its success, spending “hundreds of millions of dollars” and completely unaware that criminal syndicates were using it to launder cash.

During his appearance in the witness box at the royal commission on Tuesday, Mr Comyn was grilled over CBA’s breaches of the anti-money laundering and counter-terrorism financing (AML/CTF) laws.

The breaches enabled criminal syndicates to launder their illegal profits from weapons and narcotics trafficking. CBA agreed to pay a $700 million penalty earlier this year – the largest ever civil penalty in Australian corporate history.

As the royal commission heard on Tuesday, most of the contraventions were linked to CBAs introduction and oversight of intelligent deposit machines, or IDMs, which were introduced in 2012. The bank only introduced daily limits to its IDMs, which allow customers to deposit cash directly into bank accounts, in November 2017.

Counsel assisting Rowena Orr put it to Mr Comyn that if CBA had introduced the daily limits earlier, it would have disrupted money laundering activity through the IDMs by drug syndicates.

“Yes, I wouldn’t – I wouldn’t limit the causal connection to the daily limit,” Mr Comyn replied.

“But certainly our failures contributed to the inability to provide law enforcement with necessary intelligence that would – intelligence that would have led to earlier prosecutions, and, of course, there could have been other matters as well because we didn’t appropriately manage all of the risks associated with our AML/CTF obligations.”

In his statement to the royal commission, which was cited by Ms Orr, the CBA chief said that the overarching failure in respect of the contraventions was that CBA did not sufficiently understand or meet its obligations under the legislation.

“Why didn’t CBA sufficiently understand its obligations under the legislation?” Ms Orr asked.

“There was a very poor understanding at an individual obligation level about exactly what was required,” Mr Comyn said.

“There’s not a satisfactory answer as to why, but in my view, having spent a lot of time on this particular matter, I don’t think it’s clear that we actually understood exactly what was required. How could we ever fall into that sort of sense of complacency? I’ve asked myself that question many times.

“One of the reasons was we were, during that period of time – and, of course, this is no excuse – spending hundreds of millions of dollars. It’s another example of where I think there was complacency where we were insular, we were congratulating ourselves about the – the information that we were providing, because at all times during that time we were providing extensive information to AUSTRAC but we were getting commendations – there was a widely held view that we were actually doing a good job, which we clearly were not.”

Mr Comyn told the royal commission that when the statement of claim was filed on 3 August 2017, a number of the failings that were included within it were “a complete surprise to many people and everyone in the organisation”.

The CBA boss acknowledged that the bank’s failures had serious consequences. He conceded that the failures meant that law enforcement could not disrupt money laundering through your IDMs by drug syndicates, firearms importation syndicates and distribution syndicates. He accepted that CBAs actions or inactions limited the ability of law enforcement to fight financial crime.

“I’ve seen the impact and the harm that our failures did result on to Australians,” Mr Comyn said.

 

Drug money ‘a complete surprise’ to CBA
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