Australia's Westpac Bank Hit With $920 Million Money Laundering Penalty
Westpac, one of Australia's largest banks, will pay a record-breaking $920 million penalty for allowing money laundering and terrorism financing. Employees responsible for laws to be broken 23 million times will not be prosecuted.
The fine was brought by AUSTRAC, the country's financial crime regulator. The company readily agreed to pay it while CEO Peter King offered an apology for “the bank's failings.”
"We are committed to fixing these issues to ensure that these mistakes do not happen again. This has been my number one priority,” said King, reported CNN.
If the fine is approved by an Australian court, it would be the largest corporate penalty in the country's history, beating the 700-million Australian dollar ($493 million) fine levied on the Commonwealth Bank in 2018 for the same crimes.
The bank a year ago said it had failed to report details for financial transactions in and out of the country, with AUSTRAC at the time saying Westpac failed to do due diligence on transfers to the Philippines and other parts of Southeast Asia "that have known financial indicators relating to potential child exploitation."
The regulator said it identified payments made to suspected operators in the Phillipines, with Australian media tying the bank to cases that included an alleged case of pedophilia.
"The notion that any child has been hurt as a result of any failings by Westpac is deeply distressing and we are truly sorry," said former Chairman Lindsay Maxsted last year, the scandal forcing him and former CEO Brian Hartzer to resign.
King said the bank has changed how it monitors transactions and hired a financial crime squad employing hundreds of people. He did not offer an explanation why similar measures had not been taken before.
The penalty reflects the "serious and systemic nature" of Westpac's non-compliance, AUSTRAC said in a statement.
"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.
AUSTRAC said there were also a small number of payments on accounts that were potentially linked to "child exploitation risks,” the BBC said.
"The failure to pass on information... 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," Rose said when the story first broke.