Federal Court of Australia approves Westpac and AUSTRAC agreement
The Federal Court of Australia today approved the agreement between Westpac and the Australian Transaction Reports and Analysis Centre (AUSTRAC) which will see Westpac pay a $1.3 billion penalty for its breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).
The penalty imposed is the highest civil penalty in Australian history, reflecting the seriousness of compliance failings by Westpac.
Westpac continues to partner with AUSTRAC to assist AUSTRAC and law enforcement agencies to stop financial crime, including as a member of AUSTRAC’s private-public partnership the Fintel Alliance.
In September 2020, Westpac and AUSTRAC agreed to a $1.3 billion proposed penalty over Westpac’s breaches of the AML/CTF Act. Westpac has admitted to contravening the AML/CTF Act on over 23 million occasions, exposing Australia’s financial system to criminal exploitation.
In summary, Westpac admitted that it failed to:
- Properly report over 19.5 million International Funds Transfer Instructions (IFTIs) amounting to over $11 billion 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, which these banks needed to manage their own ML/TF risks.
- 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.