In a recent statement, AUSTRAC said it had closed the enforceable undertaking (EU) with National Australia Bank (NAB) after concluding that the bank had satisfied the obligations under the agreement.
The enforceable undertaken was first established back in April 2022 and was entered into by NAB and four other NAB-related companies to address shortcomings in compliance with Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws.
The EU specifically aimed to address concerns regarding NAB’s customer identification procedures, ongoing customer due diligence and the adoption and maintenance of a compliant AML/CTF program.
An external audit was undertaken by an independent auditor who found that NAB had satisfied the terms of the EU, highlighting the bank’s commitment to transparency, accountability and commitment to sustainable remediation.
The external auditor also made recommendations outside the EU scope to further enhance the bank’s AML/CTF program, including around transaction monitoring and assurance frameworks. NAB has accepted all recommendations.
AUSTRAC chief executive Brendan Thomas said NAB had demonstrated a commitment to ongoing compliance and to tackling the risks and harms posed by serious and organised crime.
“The closure of this EU reflects the progress NAB has made but it still doesn’t give the business a clean bill of health,” Thomas said.
“The EU set NAB on the right path but compliance is not a one-off task – it requires ongoing, incremental change. AUSTRAC expects NAB to continue to improve its systems and processes.”
Thomas said AUSTRAC was pleased that NAB had agreed to take on additional remediation work to improve its AML/CTF program.
“Finalising the EU is not the end of the assurance and integration work required by NAB. Elements of AML programs are interconnected, so deficiencies in one element can affect the effectiveness of another,” he said.
“Now that NAB has uplifted its AML/CTF program and procedures related to customer identification and due diligence, we’d like the business to consider what these changes may mean for the strength of other elements of its program, such as transaction monitoring,” he said.
NAB Chief executive Andrew Irvine said NAB welcomed the finalisation of the EU.
"Through a transparent and constructive process with AUSTRAC and the external auditor, NAB has transformed our approach to managing financial crime," Irvine said.
Irvine confirmed the bank had committed to actioning the further recommendations put forward by the independent auditor.
"We remain focused on the challenges that financial crime presents to our customers and society," he said.
"Banks play a critical role in monitoring and reporting suspicious, and potentially criminal, activity and we will continue to make investments that help to keep our customers, communities and bank safe."
