Westpac will pay a civil penalty of $1.3 billion – $404 million more than its $900 million provision – to settle the AUSTRAC matter. As part of its agreement with AUSTRAC, Westpac has also admitted to additional contraventions of AML/CTF legislation and will pay the regulator's $3.75 million in legal costs.
“I would like to apologise sincerely for the bank’s failings,” said CEO Peter King.
“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.”
Westpac admitted it had failed to report over 19.5 million international funds transfer instructions (IFTIs), amounting to more than $11 billion; pass on information about the origin of some of those fund transfers; appropriately assess and monitor risks associated with correspondent banking relationships; and carry out appropriate customer due diligence in relation to suspicious transactions associated with possible child exploitation.
“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,” said AUSTRAC CEO Nicole Rose.
“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.”
