Westpac, Australia’s second-largest bank, violated money laundering laws 23 million times and could be fined AUD21 million (US$15.7 million) per breach.
Westpac Banking Corp, the second-largest bank in Australia, currently faces multiple accusations. One of them is pertaining to the biggest breach of terrorism financing and money laundering laws in history. According to reports, the bank failed to detect over $7.5 billion in cross-border transactions, in addition to infringing money laundering laws 23 million times.
According to reports, each act of transgression might receive a $15.7 million (21 million AUD) fine.
Australian Banks Need to Improve Their Business Practices
The news comes as a surprise. Westpac has always been among the banks that are known for its reputable security and safety. However, Australia’s banks have started getting embroiled in one scandal after another in recent years, effectively losing reputation along the way.
This is not only the case. Only a year ago, Australia’s largest lender, known as Commonwealth Bank of Australia, got accused of 53,800 money laundering contraventions. The matter was settled for AUD 700 million, excluding the legal costs themselves. While this was Australia’s largest corporate civil penalty to date, it could have gone significantly higher than the quoted figure, reaching even AUD 1 trillion.
As for Westpac, the bank allegedly self-reported to Austrac (Australian Transaction Reports and Analysis Centre), which then filed a statement of claim against it. Westpac CEO, Brian Hartzer, openly agreed with the statements, admitting that the bank should have done better,
Accusations Against Westpac Keep Piling Up
Austrac reported that infractions occurred between 2013 and 2019. They were possible due to Westpac’s adoption of an ad-hoc approach to money laundering and terrorist financing risk management and compliance. The bank even failed to manage known child-exploitation risks, allowing customers who served jail time for child exploitation to open accounts.
Westpac already saw a 3.3% drop in shares, and it recently reported its first annual profit drop in four years. Hartzer commented on the bank’s situation, insisting that the bank invested in improving the managing of financial crime risks. Some of the new precautions include improving automatic detection systems.
Meanwhile, New Zealand’s central bank is investigating the claims as well, trying to determine whether they are relevant to the bank’s New Zealand subsidiary.
What do you think about the Westpac AML breach? Let us know your thoughts in the comments below.
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