Australian bank agrees to USD919M fine for money laundering

CANBERRA, Australia (AP) — Westpac, Australia’s second-largest bank, agreed to pay a USD919 million fine for breaches of anti-money laundering and counter-terrorism financing laws, the largest ever civil penalty in Australia, a financial crime regulator said yesterday.

The regulator, AUSTRAC, said it agreed with Westpac to the penalty after the bank admitted failing to report 19.5 million international money transfers worth over USD7 billion between November 2013 and September 2018.

If the Federal Court rules the penalty is appropriate, it will become Australia’s biggest civil penalty.

It will eclipse USD495 million settlement paid by the Commonwealth Bank of Australia, the nation’s biggest bank, in 2018 for similar but less extensive reporting failures.

AUSTRAC Chief Executive Nicole Rose said the settlement sent a strong message to industry that the regulator would take action to ensure Australia’s financial system remained strong so it could not be exploited by criminals.

People walk past a Westpac bank branch in Sydney. PHOTO: AP

“Our role is to harden the financial system against serious crime and terrorism financing and this penalty reflects the serious and systemic nature of Westpac’s non-compliance,” Rose said in a statement.

Westpac Chief Executive Peter King, who was appointed in April after the allegations were made public, said the bank was committed to ensuring the mistakes were not repeated.

“I would like to apologise sincerely for the bank’s failings,” King said in a statement.

Attorney-General Christian Porter said the size of the proposed fine should serve as a wake-up call for the banking industry.