A record-breaking penalty of almost $1 billion will be paid by Westpac, one of Australia’s largest banks. The charge against the bank is that if has systematically allowed money laundering on its watch.
An agreement for a 1.3 billion Australian dollar ($920 million) fine had been reached by it with AUSTRAC, a regulator in Australia that fights financial crime, the company announced on Thursday. As a part of the agreement, Westpac also admitted to have broken the anti-money laundering and terrorism financing laws for more than 23 million times.
“I would like to apologise sincerely for the bank’s failings,” CEO Peter King said in a statement. “We are committed to fixing these issues to ensure that these mistakes do not happen again. This has been my number one priority.”
This would become the largest corporate penalty in the history of Australia if the fine is approved by an Australian court.
The Commonwealth Bank of Australia was slapped with a 700 million Australian dollar ($493 million) fine in 2018 following the admission of the bank about it failure to tick to laws meant to prevent money laundering and financing of terrorism.
The news of the fine brought down share of Westpac in Sydney.
About a year ago, Westpac had had admitted about its failure to report millions of instructions for financial transfers in and out of Australia and legal action against the bank was initiated by Australian regulators soon after.
At that time, the banking regulator of Australia had said that there as negligence on the part of Westpac to comply to its duty of due diligence on transactions to the Philippines and other parts of Southeast Asia “that have known financial indicators relating to potential child exploitation.”
In addition to hiring hundreds of people responsible for looking out for financial crime, the company has also implemented changes to how it monitors transactions, King said.
An executive position with the direct responsibility to improve the bank’s ability to address financial crimes has also been create by the bank. .
After the allegations against the bank came to the forefront, its then CEO Brian Hartzer was forced to resign last November.
Moreover the amount of the fine agreed to by the bank is significantly larger than what the bank had set aside as expenses for the scandal. A possible penalty of 900 million Australian dollars ($634 million) had previously been estimated by the bank, it said in its announcement on Thursday.
The penalty reflects the “serious and systemic nature” of Westpac’s non-compliance, AUSTRAC said in a statement Thursday.
“We have been, and will continue to work collaboratively with Westpac and all businesses we regulate to support them to meet their compliance and reporting obligations to ensure this doesn’t happen again in the future,” said AUSTRAC chief executive Nicole Rose.
(Adapted from CNN.com)