ING to fix money laundering and financial crime compliance
Austrac has told the Dutch bank it must appoint external auditors to fix its systems or face the risk of regulatory action and stiff penalties.
ING will bring in external auditors under a plan to fix its anti-money laundering and counter terrorism financing systems in the face of potential regulatory action and stiff penalties.
Austrac on Thursday morning said it had agreed to an enforceable undertaking with ING after the bank self-reported failures to the government’s financial intelligence agency in August 2020.
The undertaking, signed by the two sides, captures two ING banking entities and will see the Australian arm of the international financial giant, based in the Netherlands, commit to an ongoing plan to improve financial crime monitoring and reporting.
The regulator has previously imposed substantial fines on the Commonwealth Bank and Westpac, although neither had voluntarily reported the issues.
ING will be required to submit evidence to Austrac showing its international funds transfer and suspicious matters reporting – as well as transaction monitoring – have improved. The bank is required to appoint external auditors to manage its compliance plan, with a report due to be handed to Austrac by December 2023.
ING first reported the issues to Austrac in August 2020, but the regulator did not begin its investigation until July 2021, identifying concerns in relation to the bank’s anti-money laundering and counter terrorism financing programs.
Austrac chief executive Nicole Rose said the enforceable undertaking signed by ING will ensure the bank directs its efforts towards “future compliance”.
“ING have been fully co-operating with Austrac throughout our regulatory inquiries and have demonstrated an ongoing commitment to addressing concerns about the effectiveness of their AML/CTF systems and controls,” Ms Rose said on Thursday. “It’s important that all businesses enrolled with Austrac have robust systems in place to ensure they meet their AML/CTF obligations and play their part in protecting Australia’s financial system from exploitation by criminals.”
The move to impose the enforceable undertaking stops short of any penalties or remedial directions issued against ING.
Austrac fined CBA $700m after the bank revealed it had failed to report large cash deposits made at its new intelligent ATMs to the regulator over several years.
That matter is now the subject of a class action brought against CBA in the Federal Court, which alleges the bank knew or should have known about deficiencies in its systems for several years.
Ms Rose acknowledged the “significant work already undertaken by ING” to identify and improve AML and CTF programs.
“We look forward to continuing to work with them to ensure they meet their obligations under the AML/CTF Act,” she said.
ING Australia chief executive Melanie Evans said the bank had prioritised a “well-resourced” program to fix compliance since first reporting the issues to Austrac. “Protecting customers, the wider community and the financial system is something we are committed to at ING,” she said.
“Our ongoing commitment is to ensure we meet our obligations to help combat the risks of serious and organised crime.”
Ms Evans took on the role of ING CEO in November 2020 after running ING’s retail bank.
The move against ING comes after Austrac secured an enforceable undertaking from NAB to fix due diligence systems.
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