It's not only Westpac. What's behind the biggest fine in Australian corporate history
- Written by Thomas Clarke, Professor, UTS Business, University of Technology Sydney
Westpac is to pay A$1.3 billion, by far Australia’s biggest-ever corporate fine for breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act.
The 93-page statement of agreed facts and admissions prepared by Westpac and the Australian Transaction Reports and Analysis Centre (AUSTRAC) says Westpac contravened the Act more than 23 million times exposing Australia’s financial system to criminal exploitation.
It failed to pass on information to authorities about the origin of international funds transfers, and failed to pass on information to other banks in the transfer chain who needed to manage their own money laundering and terrorism financing risks.
“Westpac failed to identify activity potentially indicative of child exploitation risks by failing to implement appropriate transaction monitoring detection scenarios,” the agreed statement says.
“Three of the customers the subject of these proceedings had prior convictions relating to child exploitation offences.”
“One of these customers has been arrested in relation to further child exploitation offences since the commencement of these proceedings.
Westpac and AUSTRAC, Agreed Statement of Facts and Admissions
In reaching the agreement, Westpac also admitted to 76,000 additional contraventions relating to information that came to light after AUSTRAC launched proceedings last year, some which also relate to "failures to reasonably monitor customers for transactions related to possible child exploitation”.
The action triggered the departures of Westpac chief executive Brian Hartzer and chairman Lindsay Maxsted late last year.
Read more:
How Westpac is alleged to have broken anti-money laundering laws 23 million times
The A$1.3 billion fine dwarfs the Commonwealth Bank’s A$700 million settlement with AUSTRAC for serious breaches of anti-money laundering and counter-terrorism financing laws in 2018.
The Westpac debacle is far from an isolated instance of international banks demonstrating indifference to their potential involvement in organised crime.
Documents released by the International Consortium of Investigative Journalists on Monday show that major banks around the world conducted US$2 trillion of suspicious transactions in the eight years between 1999-2017.
Australian banks on the international stage
Of a limited sample of transactions assessed, Australian banks received US$3.8 million of suspicious funds and sent out $167.9 million.
Authors: Thomas Clarke, Professor, UTS Business, University of Technology Sydney





