Westpac cops record fine in Australia

Andrew Cummings
September 25, 2020

A man talks on his mobile phone in front of a Westpac Bank logo in central Sydney, Australia, October 2, 2015.

Westpac is set to pay a record $1.3 billion penalty to settle a massive lawsuit filed against it by Australia's financial crime watchdog in November a year ago after contravening anti-money laundering laws millions of times.

It will eclipse a 700 million Australian dollar (£387 million) settlement paid by the Commonwealth Bank of Australia, the nation's biggest bank, in 2018 for similar but less extensive reporting failures.

Westpac has admitted to breaking global fund transfer laws 23 million times, leaving the country's financial system exposed to criminal exploitation.

Whether it's money laundering or charging fees to the dead, corporate Australia has a sterling record of going above and beyond.

According to an official release by the country's financial crime watchdog, Westpac failed to report over 19.5 million International Funds Transfer Instructions (IFTIs) amounting to over A$11 billion.

"We are committed to fixing the issues to ensure that these mistakes do not happen again", King said.

Australian regulators pursued legal action against Westpac almost a year ago when they said the bank failed to report millions of instructions for financial transfers in and out of Australia.

Westpac Group CEO Peter King apologised for the bank's failings and said the company is actively addressing the internal issues at play.

Nor did the bank carry out appropriate customer due diligence in relation to suspicious transactions linked to possible child exploitation.

It ends an AUSTRAC investigation that has been plaguing it since November and cost it CEO Brian Hartzer, and prompted long-standing chair Lindsay Maxsted to leave as well.

"This has been my number one priority".

The bank also created an executive position who is directly responsible for improving its ability to address financial crimes.

"Our role is to harden the financial system against serious crime and terrorism financing and this penalty reflects the serious and systemic nature of Westpac's non-compliance".

The fine exceeded the provision of US$900 million (RM3.75 billion) Westpac budgeted earlier this year to cover the expected penalty.

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