Austrac promises enforcement action won’t end with Westpac

Financial crime regulator Austrac says the record $1.3bn fine it secured against Westpac won’t be the end of action against major companies.

Austrac CEO Nicole Rose says the organisation will continue to pursue action against large corporations. Picture: AFP

AUSTRAC chief executive Nicole Rose has warned corporate Australia she will take on more large entities failing to meet anti-money laundering standards after Westpac’s $1.3bn settlement.

Westpac announced on Thursday it had agreed to pay a huge $1.3bn fine, dwarfing Commonwealth Bank’s $700m settlement with Austrac in 2017, over its failure to identify money laundering risks which benefited terrorists and peodophile rings.

When asked in Canberra if AUSTRAC - the anti-financial crime agency - would take on more big cases, Ms Rose replied, “Yes.”

“More absolutely needs to be done through our 15,000 entities. there are varying, different maturities through our entities,” she said in Canberra.

“We’re ramping up our guidance and education this year to ensure that they are well aware of their requirements.

“But I have to say since the Commonwealth Bank action, we’ve seen an increase in suspicious transaction reporting. So businesses are starting to take this very seriously.”

In its statement on the proposed settlement with Westpac, Austrac said the bank’s failures had impeded law enforcement.

Westpac’s conduct means opportunities have been lost to disrupt possible unlawful activity, including child exploitation, money laundering, terrorism financing and tax offences,” Austrac said.

“Westpac failed to identify activity potentially indicative of child exploitation risks by failing to implement appropriate transaction monitoring detection scenarios.”

Delays by Westpac in lodging reports may also have hindered tax enforcement action by the ATO.

Federal Attorney General Christian Porter labelled Westpac’s settlement as “an acceptance of the fact that these represent some of the greatest failures of a corporate entity in Australia’s history to abide by Australian law.”

Speaking to reporters on Thursday, Mr Porter said the bank’s 23 million breaches of anti-money laundering laws through the failure to report international money transfers - some directly linked to child exploitation - exposed the Australian community to illegal activity.

“The failures on Westpac’s behalf have also exposed Australia’s financial system, and therefore our community, to serious crimes including tax offences, money laundering and potentially terrorism financing,” he said.

Mr Porter said that the settlement, which is the largest corporate penalty imposed in Australian history, was adequate and not tax-deductible.

“I might note also for the benefit of everyone present that the penalty is non tax- deductible, which ensures that Australian taxpayers don’t end up picking up the bill in any way, shape, or form,” Mr Porter said, adding that the penalty should also serve as a warning to other financial institutions.

“It should also, in the government’s view, be a wake-up call to every other

financial institution, that these laws are therefore a very important reason of protecting the Australian public.

“They are laws which are meant to be observed and obeyed strictly.”