In Chief Executive Officer of the Australian Transaction Reports and Analysis Centre v Commonwealth Bank of Australia Limited [2018] FCA 930 the Federal Court of Australia declared that CBA had contravened provisions of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (which the Bank admitted) and ordered that it pay a pecuniary penalty in the total sum of AUD $700 million together with legal costs. Background.

Justice Yates noted that the statement of agreed facts and admissions is a very detailed document and amongst other things:

“It recognises and identifies the serious and systematic failures by the Bank to observe and fulfil its important obligations under the Act, whose objects include addressing the need to combat money laundering and the financing of terrorism; promoting public confidence in the Australian financial system through the enactment and implementation of controls and powers to detect, deter and disrupt money laundering, the financing of terrorism and other serious crimes; and fulfilling Australia’s international obligations in that regard so as to affect beneficially Australia’s obligations with foreign countries and international organisations….

none of the contraventions was the result of a deliberate intention on the part of the Bank to breach the relevant provisions. However, the contraventions were serious, for the reasons explained in the statement of agreed facts and admissions. 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.”

Justice Yates also considered:

• the absence of past similar conduct;
• the Bank’s size and financial position;
• specific and general deterrence;
• the period of the contravening conduct;
• the conduct of the Bank’s board and senior management;
• the likelihood and nature of the loss or damage caused by the Bank’s conduct;
• corrective measures undertaken by the Bank;
• the Bank’s co-operation with AUSTRAC in the conduct of this proceeding, including its willingness to make admissions at the first available opportunity, its willingness to respond to document and information requests without the need for court applications, and its agreement to a substantial total penalty without the need for a complex and lengthy contested hearing, which has resulted in considerable savings in cost for AUSTRAC and the broader Australian community; and
• the Bank’s contrition and remorse by acknowledging the seriousness of its contraventions, and undertaking significant steps to address the underlying deficiencies that led to the contraventions.

He concluded:

“I accept further that, rather than imposing multiple penalties, it is appropriate that a single penalty be imposed that represents the totality of the contravening conduct. I am satisfied that the sum of $700 million is an appropriate single penalty. It marks the Court’s strong disapproval of the Bank’s conduct. I am satisfied that a penalty of this amount will be sufficient to achieve the object of specific deterrence. It will also strongly deter others from contravening the Act.”