Australia's Westpac to pay record fine for money-laundering

  • Australia's Westpac to pay record fine for money-laundering

Australia's Westpac to pay record fine for money-laundering

Westpac has been forced to cough up more than a billion dollars in penalties to the financial crimes watchdog for making 23 million financial law breaches in 2019.

The fine, the largest levied against an Australian company, is more than the A$900 million Westpac had set aside for a potential penalty, and nearly double the A$700 million that rival Commonwealth Bank of Australia paid to settle its own money-laundering breaches in 2018.

The regulator, AUSTRAC, said it had agreed with Westpac to the penalty after the bank admitted failing to report 19.5 million global money transfers worth more than $7 billion between November 2013 and September 2018.

Westpac set aside $900 million in its 2020 half-year results in anticipation of a fine.

The settlement brings to an end an nearly yearlong saga for Australia's second-biggest bank, after it was accused of more than 23 million breaches of money-laundering laws, including failing to detect payments linked to child abuse.

AUSTRAC said the bank had been aware of heightened risks associated with frequent small payments destined for Southeast Asia since 2013 and had been "specifically briefed" on the risks with respect to one of its money transfer channels in June 2016.

Westpac chief executive Peter King said the bank was apologetic for its failings relating to the historical transactions, which were not flagged as suspicious at the time.

The company chairman, Lindsay Maxsted, also stepped down.

"We are determined to continually lift our financial crime standards, comply with our obligations and uphold our customer, community and regulatory expectations", he said in a statement.

It will eclipse an AU$700 million ($495 million) settlement paid by the Commonwealth Bank of Australia, the nations biggest bank, in 2018 for similar but less extensive reporting failures.

The agreement comes with the global financial industry again falling under the spotlight after a cache of leaked documents showed years of transactions handled by the world's largest banks linked to money laundering, corruption and fraud.

It found banks had charged fees to dead people and to others for no services at all, used aggressive sales tactics and provided poor advice that led to significant financial upheaval for clients.