Borrow
23 million money laundering woes bite big 4 bank
Australian anti-terrorism regulator AUSTRAC is seeking civil penalty orders against one of the big four banks for more than 23 million alleged breaches of the anti-money laundering laws.
23 million money laundering woes bite big 4 bank
Australian anti-terrorism regulator AUSTRAC is seeking civil penalty orders against one of the big four banks for more than 23 million alleged breaches of the anti-money laundering laws.
AUSTRAC reported that it has applied to the Federal Court of Australia for civil penalty orders against Westpac Banking Corp.
According to the anti-money laundering and terrorism financing regulator, the civil penalty orders relate to systemic non-compliance of the bank with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).
It alleged that Westpac’s oversight of the banking and designated services provided through its correspondent banking relationships was deficient.
AUSTRAC also alleged that the bank’s oversight of its own program intended to identify, mitigate and manage the money laundering and terrorism financing risks of its designated services was also deficient.
AUSTRAC’s CEO, Nicole Rose, noted that the decision to commence civil penalty proceedings was made following a detailed investigation into Westpac’s non-compliance.
She said “these AML/CTF laws are in place to protect Australia’s financial system, businesses and the community from criminal exploitation”.
Serious and systemic non-compliance leaves our financial system open to being exploited by criminals, the CEO emphasised.
According to AUSTRAC, Westpac has failed to:
1. Appropriately assess and monitor the ongoing money laundering and terrorism financing risks associated with the movement of money into and out of Australia through correspondent banking relationships.
2. Report more than 19.5 million international funds transfer instructions (IFTIs) to AUSTRAC over nearly five years for transfers both into and out of Australia.
3. Pass on information about the source of funds to other banks in the transfer chain, which AUSTRAC said “deprived the other banks of information they needed to understand the source of funds to manage their own AML/CTF risks”.
4. Keep records relating to the origin of some international funds transfers.
5. Carry out appropriate customer due diligence on transactions to the Philippines and south-east Asia that AUSTRAC said “have known financial indicators relating to potential child exploitation risks”.
Westpac is alleged to have failed to introduce appropriate detection scenarios to detect known child exploitation typologies consistent with AUSTRAC guidance as well as their own risk assessments.
“The failure to pass on information about IFTIs to AUSTRAC undermines the integrity of Australia’s financial system and hinders AUSTRAC’s ability to track down the origins of financial transactions, when required to support police investigations,” Ms Rose indicated.
She explained that the regulator has been working, and will continue to work, with Westpac during these proceedings to strengthen their AML/CTF processes and frameworks.
“Westpac disclosed issues with its IFTI reporting, has cooperated with AUSTRAC’s investigation, and has commenced the process of uplifting its AML/CTF controls.”
Westpac acknowledged the statement of claim, outlining that it has “previously disclosed that it had self-reported a failure to report a large number of international funds transfer instructions to AUSTRAC, and that AUSTRAC was also investigating a number of other areas relating to Westpac’s processes, procedures and oversight”.
It indicated it will issue further comments after assessment of the claim.
RELATED ARTICLES
About the author
About the author
Banking
Banks urged to embrace existing payment technologies over AI hype
In the rapidly evolving landscape of financial technology, the focus has increasingly shifted towards artificial intelligence (AI) as the next frontier for innovation. However, Ian Boyd, General ...Read more
Banking
EMEA banks enjoy profit growth amid revenue challenges in 2025
In a year marked by economic turbulence and geopolitical uncertainties, the largest banks across Europe, the Middle East, and Africa (EMEA) have reported a paradoxical trend: shrinking or stagnant ...Read more
Banking
Australian major banks demonstrate resilience amid economic uncertainty
In the face of economic headwinds, Australia's major banks have reported robust half-year results, showcasing their resilience amid rising uncertainty. According to KPMG’s Australian Major Banks Half ...Read more
Banking
RBA's new ruling on card surcharges sparks debate among businesses and banks
In a significant move aimed at enhancing transparency and fairness in the Australian payments landscape, the Reserve Bank of Australia (RBA) has announced the removal of surcharging on debit, prepaid, ...Read more
Banking
Australian SMBs lose two business weeks annually to late payments, report finds
In a startling revelation, the latest report by GoCardless, a global bank payment company, highlights the crippling impact of late payments on small and medium businesses (SMBs) across AustraliaRead more
Banking
Brighten’s reverse‑mortgage bet: why a niche product could be non‑banks’ next profit engine
Brighten has created a dedicated reverse‑mortgage leadership post, signalling a strategic push into equity release as Australia’s demographic curve tilts older and wealth concentrates in housingRead more
Banking
Why banks are moving at different speeds after the RBA hike — and how to turn timing into advantage
The Reserve Bank’s latest cash rate move has triggered an uneven response from lenders — a pattern that reveals more about funding structures, risk appetites and systems readiness than headline ...Read more
Banking
ANZ’s company-borrower mortgage clampdown: a risk reset with wide spillovers for SMEs, investors and non-banks
ANZ has tightened credit settings for home loans where the borrowing entity is a company — a narrow policy change with broad commercial consequences. It signals a shift in risk appetite across ...Read more
Banking
Banks urged to embrace existing payment technologies over AI hype
In the rapidly evolving landscape of financial technology, the focus has increasingly shifted towards artificial intelligence (AI) as the next frontier for innovation. However, Ian Boyd, General ...Read more
Banking
EMEA banks enjoy profit growth amid revenue challenges in 2025
In a year marked by economic turbulence and geopolitical uncertainties, the largest banks across Europe, the Middle East, and Africa (EMEA) have reported a paradoxical trend: shrinking or stagnant ...Read more
Banking
Australian major banks demonstrate resilience amid economic uncertainty
In the face of economic headwinds, Australia's major banks have reported robust half-year results, showcasing their resilience amid rising uncertainty. According to KPMG’s Australian Major Banks Half ...Read more
Banking
RBA's new ruling on card surcharges sparks debate among businesses and banks
In a significant move aimed at enhancing transparency and fairness in the Australian payments landscape, the Reserve Bank of Australia (RBA) has announced the removal of surcharging on debit, prepaid, ...Read more
Banking
Australian SMBs lose two business weeks annually to late payments, report finds
In a startling revelation, the latest report by GoCardless, a global bank payment company, highlights the crippling impact of late payments on small and medium businesses (SMBs) across AustraliaRead more
Banking
Brighten’s reverse‑mortgage bet: why a niche product could be non‑banks’ next profit engine
Brighten has created a dedicated reverse‑mortgage leadership post, signalling a strategic push into equity release as Australia’s demographic curve tilts older and wealth concentrates in housingRead more
Banking
Why banks are moving at different speeds after the RBA hike — and how to turn timing into advantage
The Reserve Bank’s latest cash rate move has triggered an uneven response from lenders — a pattern that reveals more about funding structures, risk appetites and systems readiness than headline ...Read more
Banking
ANZ’s company-borrower mortgage clampdown: a risk reset with wide spillovers for SMEs, investors and non-banks
ANZ has tightened credit settings for home loans where the borrowing entity is a company — a narrow policy change with broad commercial consequences. It signals a shift in risk appetite across ...Read more
