Westpac has been accused of poor oversight of its anti-money laundering and terrorism financing obligations, which has resulted in 23 million breaches of the anti-money laundering and counter-terrorism financing act.
Australian anti-money laundering regulator AUSTRAC has applied Federal Court of Australia for civil penalties on Westpac, which it says has failed to adequately monitor transactions that could be linked to child exploitation in Asia, the «Sydney Morning Herald» reported on Wednesday.
According to the regulator, the bank contravened the act on 23 million occasions and failed to report more than 19.5 million international funds transfer instructions to it between November 2013 and September 2018. The repeated, low-value transactions to countries in Southeast Asia like the Philippines could mean the bank was processing transactions by known paedophiles, but the bank did not set up an automated detection system until 2018.
AUSTRAC chief executive Nicole Rose described the bank's actions as «serious and systemic,» while Australian Prime Minister Scott Morrison said it was «appalling and distressing.»
«Ad-Hoc Approach»
According to the regulator's statement, Westpac failed to properly resource the AML-CTF function, invest in appropriate IT systems and automated solutions and rectify known compliance issues in a timely manner.
«They have occurred because Westpac adopted an ad hoc approach to ML/TF [money laundering/terrorism financing] risk management and compliance,» AUSTRAC said in a statement submitted to the court.
Another Australian «Big 4» bank, Commonwealth Bank was involved in a similar case in 2017, with the bank paying $700 million for failing to report 53.506 transactions.
