Westpac bank 'breached anti-money laundering laws'

AUSTRAC CEO Nicole Rose

AUSTRAC CEO Nicole Rose

Rose stated Westpac had unsuccessful to hold out "appropriate owing diligence on customers sending income to the Philippines and Southeast Asia for regarded boy or girl exploitation hazards".

"The failure to pass on information about IFTIs to AUSTRAC 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".

Westpac New Zealand is putting distance between itself and allegations of breaches of Australia's anti-money laundering laws by its parent company.

Key Australian financial institution Westpac goes by way of a probably vital high quality proper after at the moment being accused of 23 million breaches of the anti-income laundering and counterterrorism financing act.

Westpac said it was reviewing AUSTRAC's claim, adding it had informed the regulator of its failure to report the payments.

As a result of the turmoil, Westpac Bank's share price fell 3.37 percent and is now valued at 25.66 Australian dollars (17.49 USA dollars) per share as of 15:30 p.m. local time.

AUSTRAC chief executive Nicole Rose said Westpac had engaged in "serious and systemic non-compliance".

Westpac's senior management were specifically warned the bank's low-priced global transactions system could be used to facilitate child exploitation payments, but failed to implement an appropriate detection system for two years, the Australian Transaction Reports and Analysis Centre (Austrac) said in the court filing.

It argues Westpac failed to implement the necessary automated detection procedure on this transaction.

Westpac essential govt Brian Hartzer reported the issues "should in no way have happened and should really have been discovered and rectified sooner".

AUSTRAC's civil penalty orders against Westpac also center on the oversight of its AML/CTF Program. "It is disappointing that we have not met our own standards as well as regulatory expectations and requirements".

"Westpac disclosed issues with its IFTI reporting, has cooperated with AUSTRAC's investigation and has commenced the process of uplifting its AML/CTF controls".

Westpac meanwhile maintained relationships with offshore banks without assessing their business relationships, products, customers or payments, even when those banks disclosed relationships with "high risk or sanctioned countries including Iraq, Lebanon, Ukraine, Zimbabwe, and Democratic Republic of Congo".

"I'm appalled. I'm absolutely appalled", he told reporters in Brisbane.

The Commonwealth Bank (CBA), another major Australian banking institution, previous year faced a theoretical maximum fine of 1 trillion Australian dollars after AUSTRAC found it had failed to report on 53,500 transactions.

The lawsuit sent Westpac shares down 3% by the close, outpacing a broader share market decline of 1.4%, as investors began counting the financial and reputational cost of the lawsuit.

The country's banking sector has also been the subject of a royal commission - Australia's highest form of public inquiry - that earlier this year exposed widespread wrongdoing in the industry.

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