As announced by the Attorney-General and Minister Dutton, I am pleased to confirm that AUSTRAC and Westpac 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. Subject to the Federal Court’s findings, both AUSTRAC and Westpac agree that this agreement reflects the seriousness and magnitude of compliance failings by Westpac.
This agreement is an encouraging step forward. If the Federal Court determines that the penalty proposed is appropriate and makes an order accordingly, it will represent the largest civil penalty in Australian history.
In this agreement, Westpac has acknowledged there were failures to appropriately assess and monitor risks associated with the movement of money into and out of Australia through correspondent banking relationships.
Westpac has agreed there were failures to report to AUSTRAC over 19.5 million International Funds Transfer Instructions over nearly five years for transfers both into and out of Australia amounting to over $11 billion dollars.
Westpac has agreed there were failures to keep records 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 those banks needed to manage their own AML/CTF risks.
Westpac has also agreed there were failures to carry out appropriate customer due diligence in relation to suspicious transactions.
These compliance failings by Westpac exposed our community to the risk of criminals seeking to exploit our financial system.
I’m pleased to say Westpac has commenced uplifting its AML/CTF controls and has taken urgent steps to close gaps and strengthen policies, data systems and processes. AUSTRAC will continue to work closely with Westpac to oversee and support this work.
Throughout these legal proceedings, Westpac has also remained committed to working together with AUSTRAC and our government and industry partners through the Fintel Alliance to identify and disrupt crime and terrorism.
Accordingly, I would like to thank Peter King for his strong leadership and I look forward to working with him and his new team in their efforts to strengthen their business against financial crime.
I would like to express my gratitude to AUSTRAC’s team of legal advisers for their hard work.
Lastly, I want to thank the people of AUSTRAC for their tireless efforts and the commitment that they show every day to protect our community from those who seek to do us harm.
Nicole Rose PSM