- Agreement reached between AUSTRAC and the Commonwealth Bank of Australia for $700mn penalty, to resolve proceedings relating to breaches of AML/CTF law.
- Parties will jointly approach Federal Court, seeking orders to confirm settlement.
- Anticipate that a hearing on the penalty, will be scheduled in the coming months.
- If agreed by Court, it will represent largest ever civil penalty in corporate history.
- AUSTRAC enforcement action against CBA followed exhaustive investigations into CBA’s AML/CTF compliance, risk management, eg its intelligent deposit machines.
- The CBA has admitted that it contravened the AML/CTF Act on 53,750 occasions.
- CBA failed to conduct assessment of the AML/CTF risk of IDMs, prior to Oct. 2017.
- Failed to complete the introduction of appropriate IDM controls prior to Apr. 2018.
- Did not provide 53,506 threshold transaction reports on time, for transactions of
$10,000 or more through IDMs from Nov. 2012 to Sep. 2015, with value of $625mn.
- For period of 3 years, did not comply with the requirements of AML/CTF program.
- Failed to report suspicious matters on time, or at all, involving large transactions.
- Even after it became aware of suspected money laundering or structuring on CBA
accounts, it did not monitor its customers to mitigate and manage the ML/TF risk.
AUSTRAC CEO Comments
- AUSTRAC's CEO Nicole Rose said outcome would send a strong message to industry.
- Message that serious non-compliance with the AML/CTF Act will not be tolerated.
- Business is the first line of defence in protecting the community and the financial
system from abuse, critical that compliance and risk management are embedded.
- Hoped result will alert the financial sector to the consequence of poor compliance.
- AUSTRAC will work collaboratively with and support the industry to deter criminal
activity, and welcomed CBA’s decision to commence work on a Program of Action.