Westpac ordered to pay $1.3 billion civil penalty for AML compliance failures

On October 21, 2020, the Australian Transaction Reports and Analysis Centre (AUSTRAC), Australia’s anti-money laundering and terrorism financing regulator, announced that the Federal Court of Australia had accepted the proposed settlement and penalty agreement reached between AUSTRAC and Westpac Banking Corporation, with the court ordering Westpac to pay $1.3 billion in civil penalties for breaching the Anti-Money Laundering and Counter-Terrorism Financing Act of 2006 (AML/CTF Act).  According to AUSTRAC, this is the highest civil penalty ever imposed in Australia’s history, intended to reflect the serious failings of Westpac’s compliance program.

On September 24, 2020, AUSTRAC announced that a proposed settlement and civil penalty agreement had been reached with the bank, after Westpac admitted to breaching the AML/CTF Act on over 23 million occasions.  More specifically, Westpac admitted that it failed to report $11 billion dollars worth of International Fund Transfer Instructions (IFTI) to AUSTRAC between 2013 and 2018, as well as record-keeping failures related to the origin of funds that also exposed other banks in the transfer chain to money laundering risks.  Westpac also admitted failures in its correspondent banking relationships, including deficiencies in monitoring the movement of money between Australia and high risk jurisdictions, and conducting inadequate due diligence on customers with suspicious transactions, some possibly related to child exploitation.

Westpac also issued a statement on October 21, 2020, acknowledging the Federal Court’s approval of its proposed agreement , and agreeing to pay the $1.3 billion penalty to resolve the civil proceedings commenced by AUSTRAC on November 2019.  

AUSTRAC Press Release (October 2020) | AUSTRAC Press Release (September 2020) | AUSTRAC Press Release (November 2019) | Westpac Press Release

 

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