Westpac Hit With Record $1.3 Billion Fine For Money Laundering

Westpac Fined Record $1.3 Billion For Money Laundering
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Australia’s Westpac bank has been hit with a record setting $1.3 billion fine after settling allegations with financial regulator AUSTRAC for breaches of money laundering laws. 

The settlement was finalised between Westpac and Austrac after it was alleged the bank breached money laundering laws more than 23 million times. It represents the largest corporate fine ever handed down in Australia, twice the size of the previous record holder of $700 million handed down to the Commonwealth bank. 

The Federal Court is expected to finalise and approve the settlement shortly. 

The Commonwealth bank was found in breach of the same money laundering laws after being found to have facilitated 54,000 questionable transactions. 

The Australian Transactions Reports and Analysis Centre (AUSTRAC) has issued a statement saying the settlement was agreed to by both parties after Westpac breached the Anti-Money Laundering and Counter-Terrorism Acts on more than 23 million transactions. 

According to a report from the ABC “these breaches included a failure to properly report more than $19.5 million international funds transfer instructions (IFTI) amounting to more than $11 billion.” 

Chief Executive of AUSTRAC, Nicole Rose has issued a statement saying that “our role is to harden the financial system against serious crime and terrorism financing and this penalty reflects the serious and systemic nature of Westpac’s non-compliance.” 

“Westpac’s failure to implement effective transaction monitoring programs, and its failure to submit IFTI reports to AUSTRAC and apply enhanced customer due diligence in relation to suspicious transactions, meant AUSTRAC and law enforcement were missing critical intelligence to support police investigations,” Ms Rose continued to explain. 

Chief Executive at Westpac, Peter King has said that the bank is “committed to fixing the issues to ensure that these mistakes do not happen again. This has been my number one priority,” he said. 

King continued to explain that “we have also closed down relevant products and reported all relevant historical transactions.” 

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Earlier this year Westpac announced it had saved $900 million in anticipation of a settlement with AUSTRAC, shortly after its former CEO Brian Hartzer and Chairman Lindsay Maxsted left the bank in the aftermath of the money laundering allegations. 

The events of late 2019 also saw three separate class action lawsuits being launched against Westpac. 

A report from the Sydney Morning Herald says that Westpac’s failure to properly vet transactions eventuated with money being transferred to “customers who paid for child exploitation and live child sex shows in the Philippines and other parts of South East Asia.” 

Attorney-General, Christian Porter has said that Australia’s money laundering laws are serious, and any breach of them should be matched with serious repercussions. 

“While noting the penalty is still subject to the Federal Court’s approval, this should serve as a wake-up call to all financial institutions operating in Australia that the government is serious about maintaining a strong financial system and won’t tolerate non-compliance.” 

Home Affairs Minister Peter Dutton has also commented on the case, stating that the integrity of Australia’s financial system should not be undermined by any institution, regardless of its size. 

“Banks have a responsibility to not let criminal activity go undetected and to protect Australians from serious and organised crime like child exploitation, drug trafficking and fraud.” 

“They should be able to trust their banks and financial services they use daily to have strong systems in place to protect the community from crime. In this case, Westpac breached that trust and let their customers down, ultimately putting Australians at risk.” 

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