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APRA drops big 4 money laundering case

  • March 15 2021
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APRA drops big 4 money laundering case

By Cameron Micallef
March 15 2021

APRA has followed ASIC in closing its investigation into Westpac over the AUSTRAC scandal, which led to the largest corporate fine in Australian history. 

APRA drops big 4 money laundering case

APRA drops big 4 money laundering case

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  • March 15 2021
  • Share

APRA has followed ASIC in closing its investigation into Westpac over the AUSTRAC scandal, which led to the largest corporate fine in Australian history. 

APRA drops big 4 money laundering case

The prudential regulator says Westpac Banking Corp’s anti-money laundering failings did not amount to a breach of the Banking Executive Accountability Regime (BEAR) or the Banking Act and has closed its investigation, nearly three months after ASIC ceased its investigation. 

APRA commenced its investigation in 2019 to examine prudential concerns arising from allegations that Westpac had breached anti-money laundering and counter-terrorism laws.  

In 2019, it was revealed that Westpac failed to report millions of money transfers to AUSTRAC, including those which could be linked to child abuses overseas, resulting in a $1.3 billion fine in September last year.

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The scandal saw a cleanout of Westpac’s executives, with then CEO Brian Hartzer and chairman Lindsay Maxsted leaving the bank.

Having “carefully considered” the result of ASIC’s investigation – to which it had delegated certain enforcement powers – APRA has closed its investigation.

Despite the investigation ending, APRA said it will keep in place an additional $1 billion capital “add-on” until the big four bank completes an independent review into its governance.

“Westpac remains subject to a court enforceable undertaking, while the $1 billion operational risk capital add-on, reflecting the bank’s ‘heightened operational risk profile’, will remain in place until Westpac completes its remediation,” APRA deputy chair John Lonsdale said.

Mr Lonsdale said although the investigation has not found evidence of breaches of the Banking Act or the BEAR, APRA remains determined to ensure Westpac rectifies its risk governance weaknesses effectively and sustainably. 

“Under the enforceable undertaking, Westpac has clearly defined executive and board accountabilities for the implementation of its integrated risk governance remediation plan. APRA will be holding Westpac to account for the delivery of the required improvements,” Mr Lonsdale said.

APRA drops big 4 money laundering case
APRA drops big 4 money laundering case
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About the author

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Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

author image
Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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