CBA makes money-laundering mea culpa over 53,000 transactions

THE Commonwealth Bank has admitted to more than 53,000 breaches of anti-money-laundering rules following allegations criminals and people with terrorist links used its ATMs to launder cash.

THE Commonwealth Bank has admitted it breached anti-money-laundering laws more than 53,000 times in another crippling blow for the reputation of the Australian banking industry.

The admission comes as the Australian Transaction Reports and Analysis Centre, or Austrac, prepares to hit the nation’s biggest bank with a further 100 allegations of breaching those reporting laws.

An amended statement of claim is expected today.

In a statement quietly ­released late yesterday after the stockmarket closed, the CBA conceded it broke the law by failing to properly monitor transactions carried out through its ATM network.

It follows allegations that criminals and people with suspected links to terrorist organisations capitalised on the bank’s failure to report suspicious transactions to regulators.

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The CBA statement is a response to civil proceedings launched in August by the nation’s dirty-money watchdog, the Australian Transaction Reports and Analysis Centre, or Austrac.

“We continue to fully co-operate with Austrac in relation to our obligations,” the bank said.

It confessed to some of the alleged crimes, but the bank said it contested “a number of allegations”.

The CBA has previously blamed a glitch in a software upgrade to its network of so-called smart ATMs.

In its statement yesterday, it conceded it was late in filing 53,506 “threshold transaction reports” — covering transactions of $10,000 or more — through its deposit-taking ATMs between 2012 and 2015.

“These all resulted from the same systems related error, representing 2.3 per cent of (transaction reports) reported by CBA to Austrac between 2012 and 2015,” it said.

The bank also agreed it did “not adequately adhere to risk assessment requirements for intelligent deposit machines”.

But the CBA, led by outgoing chief executive Ian Narev, said it did not accept this resulted in eight separate contraventions of the law.

It admitted “in whole or in part” to 91 of Austrac’s allegations concerning so-called “suspicious matter reports”, but denied a further 83 of those allegations.

Outgoing CBA chief Ian Narev. Picture Kym Smith

The bank also admitted to 52 of the allegations regarding “ongoing customer due diligence requirements” but denied 19 more.

“We take our anti-money laundering and counter-terrorism financing obligations extremely seriously,” the bank said.

“We deeply regret any failure to comply with these obligations. CBA is accountable for those deficiencies.”

The bank has filed its response to the proceedings launched by Austrac in the Federal Court.

It will also argue it lodged a significant number of reports related to the customers highlighted in Austrac’s allegations, and that this should be considered when the court assesses the harm caused by CBA’s failure to comply with all the relevant legal requirements of those reports.

“During the period of the claim, CBA submitted more than 36,000 suspicious matter reports, including 140 in relation to the syndicates and individuals referred to in Austrac’s claim,” the bank said.

Austrac is expected to file a response to CBA’s defence by March 16. directions hearing is listed for April 2.

The partial mea culpa adds to the pall over the banking ­industry which has been mired in a long and growing list of scandals.

Among them, Westpac is embroiled in a fight against the Australian Securities and ­Investments Commission at the Federal Court over claims traders at the bank tried to rig the key inter-bank lending rate known as the bank bill swap rate.

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WITH AAP