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Westpac facing penalties related to money laundering and counter-terror laws

Westpac is being hounded by Australia’s financial intelligence agency for alleged breaches of money laundering and counter-terror laws.

AUSTRAC chief executive Nicole Rose told reporters this morning the major lender didn’t report nearly more than 19.5 million international funds transfers over five years.

“Westpac failed to pass on information about the origin of international funds transfers and keep records as required,” she said.

The transfers amounted to $11 billion which Ms Rose said resulted in a “significant loss of intelligence” for the financial crimes agency.

RELATED: CBA agrees to pay $700m after breaching anti-money laundering laws

According to the application filed by the agency to the Federal Court of Australia, Westpac allegedly failed to assess ongoing money terrorism financing risks related to the movement of money, pass on information about the source of funds and keep records relating to the origin of some of the international transfers.

AUSTRAC also alleges that part of the more than 23 million contraventions included a failure to carry out due diligence on transactions to the Philippines and South East Asia where child exploitation risks are rife.

“Westpac failed to introduce appropriate detection scenarios to detect known child exploitation typologies, consistent with AUSTRAC guidance and their own risk assessments,” the application said.

Ms Rose said the “serious and systemic noncompliance” flies in the face of laws aimed to protect Australia’s financial system, businesses and the community from criminal exploitation.

“The failure to pass on information about IFTIs (international funds transfer instruction) 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,” she said in the application.

“We have been, and will continue to work with Westpac during these proceedings to strengthen their anti-money laundering and counter-terror financing (AML/CTF) processes and frameworks.

“Westpac disclosed issues with its IFTI reporting, has co-operated with AUSTRAC’s investigation and has commenced the process of uplifting its AML/CTF controls.”

The major lender released a statement this morning confirming the commencement of civil proceedings.

“Westpac has previously disclosed (including in its Full Year 2019 reporting) that it had self-

reported a failure to report a large number of international funds transfer instructions (IFTIs) to AUSTRAC and that AUSTRAC was also investigating a number of other areas relating to

Westpac’s processes, procedures and oversight,” the statement said.

“Westpac is currently reviewing AUSTRAC’s statement of claim and will issue a further statement to the ASX once it has been assessed.”

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