Westpac reports huge increase in Austrac breaches
Westpac has announced a massive increase in the number of problem financial transactions it failed to report to financial crimes regulator Austrac.
Westpac has sharply increased the number breaches of financial crime reporting rules it has admitted to regulator Austrac.
The issue of threshold transaction report breaches comes as Westpac prepares to pay a penalty for alleged contraventions of financial crimes law.
In May, Westpac revealed it had been late in reporting almost 18,000 threshold transaction reports (TTR) to Austrac. The bank warned then that figure could rise to between 60,000 and 90,000 unreported threshold transaction reports to the regulator.
On Tuesday, Westpac said that following further investigations, it had told Austrac that about 175,000 transactions had not been reported, and that approximately 365,000 TTRs that were reported to Austrac may have contained incomplete or inaccurate information.
Westpac told the ASX: “A significant proportion of the potential reporting issues relate to a range of complex scenarios where the legislation requires Westpac to exercise judgment on how multiple transactions may be aggregated and whether a threshold transaction has actually occurred.
“Accordingly, not all of the above numbers may be breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. Westpac continues to engage with Austrac in relation to these TTR issues, and notes that the numbers above may change.”
Austrac classifies a “threshold transaction” as the transfer of funds of $10,000 or more. It specifies that reporting entities must report these transfers to Austrac in a threshold transaction report within 10 business days.
In November Austrac tool legal action against Westpac over thousands of breaches, including transactions that related to child exploitation rings in Asia.
The initial case alleged 23 million breaches of the law, the bulk of which the bank had admitted. Most of the 23 million breaches related to Westpac not reporting international payment instructions.
The case led Westpac to undertake a more detailed assessment of its past reporting to Austrac. In June the bank increased its estimate of the number of customers potentially involved in child exploitation transactions to 272.
COVID-19 restrictions have meant delays to court action over the matter, with hearings expected to resume in March.
In a separate announcement on Wednesday, Westpac announced it had created a new
group operating office that brought together its group operations and group technology functions, appoint Scott Collary to lead the division.
Mr Collary joins Westpac from Bank of Montreal in Canada where he was chief
information and operations officer.
More to come
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