Commonwealth Bank have come to an agreement with AUSTRAC to pay a $700 million penalty relating to serious breaches of anti-money laundering and counter-terrorism financing laws.
Both CBA and AUSTRAC will approach the Federal Court seeking orders to this effect, and if agreed upon, this will be the largest ever civil penalty in Australian corporate history.
In a statement released today, AUSTRAC said that CBA had accepted that:
- “It failed to carry out an appropriate assessment of the money laundering and terrorism financing (ML/TF) risks of its IDMs[intelligent deposit machines] prior to October 2017;
- It failed to complete the introduction of appropriate controls to mitigate and manage the ML/TF risks of IDMs prior to April 2018;
- It failed to provide 53,506 threshold transaction reports to AUSTRAC on time for cash transactions of $10,000 or more through IDMs from November 2012 to September 2015, having a total value of about $625 million;
- For a period of three years, it did not comply with the requirements of its AML/CTF program relating to monitoring transactions on 778,370 accounts;
- It failed to report suspicious matters on time, or at all, involving transactions in the tens of millions of dollars; and
- Even after it became aware of suspected money laundering or structuring on CBA accounts, it did not monitor its customers to mitigate and manage ML/TF risk, including the ongoing ML/TF risks of doing business with those customers.”
AUSTRAC’s CEO, Nicole Rose, said this outcome “sends a strong message to industry that serious non-compliance with the AML/CTF Act will not be tolerated”.
“As we have seen in this case, criminals will exploit poor business practices to launder the proceeds of their crimes.
“This has real impacts on the everyday lives of Australians and puts the community at risk by increasing opportunities for terrorists to support attacks here and overseas, and enabling organised crime groups to peddle drugs to our families and friends.
“We know that businesses are the first line of defence in protecting the community and our financial system from criminal abuse, and it is critical for AML/CTF compliance and risk management to be embedded in business strategy and practices.
“I hope this result alerts the financial sector to the consequences of poor compliance, and reinforces that businesses need to take their obligations seriously,” said Ms Rose.