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

Marco Green
September 24, 2020

Westpac Banking Corp. will pay a record A$1.3 billion ($920 million) fine to settle Australia's biggest breach of anti-money laundering laws.

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 fine exceeded the provision of $900 million Westpac budgeted earlier this year to cover the expected penalty.

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

AUSTRAC alleged Westpac breached anti-money laundering laws 23 million times by failing to properly check thousands of global transactions.

Among the most damaging allegations against Westpac, the regulator accused bank executives of "indifference" to evidence that some worldwide transfers were being used to fund child exploitation.

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.

In reaching the agreement, Westpac admitted to about 76,000 additional breaches on top of the 23 million contraventions in the original suit, the financial crimes agency said in a statement on Thursday (Sept 24). In the immediate aftermath of the suit, intense investor pressure led to Hartzer's resignation and the early retirement of Lindsay Maxsted as chairman.

Australia's second-largest bank has been ordered to pay Austrac $1.3 billion after investigations previous year revealed it had allowed transactions and transfers that funded terrorism and human trafficking.

The country's four biggest banks - CBA, Westpac, National Australia Bank (NAB) and ANZ - were the target of a royal commission that in 2019 exposed rampant malpractice across the sector.

All the banks have reported significant hits to profits as they reimburse hundreds of millions of dollars to wronged customers.

Other reports by Click Lancashire

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