Westpac under more AUSTRAC investigation

Westpac recently filed its defence to claims by the Australian Transaction Reports and Analysis Centre (AUSTRAC) that it had breached the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act in more than 23 million instances.

The bank filed its defence in response to AUSTRAC’s statement of claim on 15 May, admitting to the non-reporting of International Funds Transfer Instructions (IFTIs) and associated tracing information failures, record-keeping failures, ongoing customer due diligence failures, and failures regarding correspondent banking obligations. It also accepted the gravity of the claims.

In its latest update to the ASX, Westpac said it has continued an internal review of its processes, and as part of that, has self-reported to AUSTRAC issues regarding its obligations to file threshold transaction reports (TTR). This was previously disclosed in Westpac’s first half 2020 results announcement.

Furthermore, Westpac reported additional suspicious matter reports in relation to potential child exploitation filed as part of Westpac’s lookback in its response to AUSTRAC’s claims.

AUSTRAC has informed Westpac that it is further investigating these matters, notifying Westpac that it may amend its statement of claim to include allegations arising from these investigations.

AUSTRAC has requested further information from Westpac on these matters, including in relation to the TTR issues and 272 customers.

Many of these customers were the subject of the suspicious matter reports previously filed as part of the lookback.

There is a further case management hearing on 17 June.

The big four bank recently released the results of its investigation into the AML/CTF compliance issues raised by AUSTRAC last year, as well as the full Advisory Panel report into the board’s governance of AML/CTF obligations and the findings of Promontory’s accountability review.

Westpac admitted that it failed to report around 19.5 million IFTIs to AUSTRAC over a six-year period, which it attributed to a mixture of both technological and human error dating back to 2009.

[Related: Westpac sets aside $900m for AUSTRAC proceedings]

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.