Australia's financial crime watchdog has accused Westpac bank of breaching anti-money laundering and counter-terrorism financing laws.
According to the Australian Transaction Reports and Analysis Centre (AUSTRAC), Westpac bank committed 23 million breaches of anti-money laundering and counter-terrorism financing laws that each breach carries a maximum a penalty of A$21 million.
Westpac, Australia's second largest bank, is the second top bank in the country to face huge fines for breaching the laws. Most of the breaches were from the bank's failure to make timely reports on international transfers to Austrac.
According to AUSTRAC, Westpac allegedly failed to properly report over 19.5 million international funds transfers between 2013 and 2018. AUSTRACÂ chief executive Nicole Rose said Westpac's failure to report the transfers properly compromised "the integrity of Australia's financial system" and "hindered its ability to track down the origins of financial transactions, when required to support police investigations".
AUSTRAC said that the transactions amounted to over A$11 billion over a span of six years. Westpac was also allegedly unable to keep records and perform certain due diligence functions with potentially high-risk overseas banks.
AUSTRAC stated: "The risk posed to Westpac was that these high risk or sanctioned countries may have been able to access the Australian payment system through these nested arrangements, unbeknownst to Westpac."
The watchdog also pointed out that there were a small number of transactions on accounts that were potentially linked to "child exploitation risks" and that the bank failed to conduct the necessary automated detection procedures on these transactions.
Westpac chief executive Brian Hartzer said the issues "should have been identified and rectified sooner." He added: "It is disappointing that we have not met our own standards as well as regulatory expectations and requirements."
The bank claimed that it had self-reported the potential breaches to AUSTRAC, and made disclosures previously of the investigation to shareholders in its annual results.
Following reports of the breaches, Westpac's shares fell by 3.3% in Sydney trading.
