Austrac and Westpac have announced that they have reached an agreement in which Westpac has admitted to over 23 million breaches of the AML/CTF Act and has agreed to pay a civil penalty of 1.3 billion dollars.

The Federal Court will now determine whether an order for the proposed penalty is appropriate.

The parties have lodged a 93 page agreed statement of facts with the Federal Court. Background.

In summary, Westpac admitted that it failed to:

• Properly report over 19.5 million International Funds Transfer Instructions (IFTIs) amounting to over $11 billion dollars to AUSTRAC.
• Pass on information relating to the origin of some of these international funds transfers, and to pass on information about the source of funds to other banks in the transfer chain.
• Keep records relating to the origin of some of these international funds transfers.
• Appropriately assess and monitor the risks associated with the movement of money into and out of Australia through its correspondent banking relationships, including with known higher risk jurisdictions.
• Carry out appropriate customer due diligence in relation to suspicious transactions associated with possible child exploitation.

In reaching the agreement, Westpac has also admitted to approximately 76,000 additional contraventions which expand the original statement of claim. These new contraventions relate to information that came to light after the civil penalty action was launched and relate to additional IFTI reporting failures, failures to reasonably monitor customers for transactions related to possible child exploitation, and two further failures to assess the money laundering and terrorism financing risks associated with correspondent banking relationships.

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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.