The Commonwealth Bank of Australia (CBA) has reached an agreement with the government’s finance intelligence agency to pay a $700m penalty for serious breaches of anti-money laundering and counter-terrorism financing laws.
If agreed to in Federal court, the sum will mark the largest ever fine in the country’s corporate history, according to the Australian Transaction Reports and Analysis Centre (AUSTRAC). In addition, CBA will also be paying AUSTRAC’s legal costs of $2.5m.
The lender admitted that it failed to carry out appropriate assessment of money laundering and terrorism financing risks to its Intelligent Deposit Machines (IDMs) before October 2017. It also said it failed to complete the introduction of appropriate controls to mitigate and manage those risks prior to April this year.
CBA accepted that it failed to provide 53,506 threshold transaction reports to AUSTRAC on time for cash transactions of $10,000 or more through IDMs from November 2012 to September 2015, and that it failed to report suspicious matters on time, or at all, involving transactions in the tens of millions of dollars.
AUSTRAC also said CBA did not monitor its customers to mitigate and manage risks, even after the bank became aware of suspected money laundering or structuring on CBA accounts.
The admissions have lead CBA CEO Matt Comyn to issue an apology on Monday. “While not deliberate, we fully appreciate the seriousness of the mistakes we made. Our agreement today is a clear acknowledgement of our failures and is an important step towards moving the bank forward.”
Comyn revealed the bank has already spent over $400 million on systems, processes and people relating to anti-money laundering and counter-terrorism financing compliance and will continue to prioritise investment in this area.
“This has real impacts on the everyday lives of Australians and puts the community at risk by increasing opportunities for terrorists to support attacks here and overseas, and enabling organised crime groups to peddle drugs to our families and friends,” said AUSTRAC CEO Nicole Rose.
“We know that businesses are the first line of defence in protecting the community and our financial system from criminal abuse, and it is critical for AML/CTF [anti-money laundering and counter-terrorism financing] compliance and risk management to be embedded in business strategy and practices,” she added.
Related stories:
Lack of transparency in agent selection services
Hundreds of foreign investors must pay ATO $2.7m in fines
