CBA cops $700m fine

Record penalty ‘appropriate’, says judge

COMMONWEALTH Bank’s record-breaking $700 million penalty for breaches of antimoney laundering and counter-terrorism financing laws has been approved by the Federal Court of Australia.

Justice David Yates said the mammoth fine reflected the bank’s recognition of its “failure to serve and fulfil” its obligations under the antimoney laundering Act.

It would also serve to deter other companies from the same conduct, Justice Yates said.

He said CBA recognised its behaviour deprived the nation’s dirty-money watchdog and other law agencies of intelligence to which they were entitled, which impacted the safety and wellbeing of the Australian community.

The $700 million fine represents the largest penalty in Australian corporate history, stemming from a settlement between CBA and the Australian Transaction Reports and Analysis Centre (Austrac) after the bank admitted to breaching the law 53,750 times.

Justice Yates said he took into account the absence of past misconduct by the CBA, the size of the lender, the actions of the bank’s board and senior management, the bank’s actions to overhaul its compliance in the wake of the charges, the “willingness” of the bank to agree to the “substantial penalty”, and its “contrition and remorse”.

“I am satisfied that the sum of $700 million is an appropriate penalty,” Justice Yates said.

The legal action, launched by Austrac in August last year, triggered an overhaul of the bank, including the resignation of chief executive Ian Narev, and a board clean-out.

CBA’s intelligent deposit machines, rolled out in 2012, failed to send Austrac thousands of legally required reports of money being laundered through the ATMs by criminal syndicates and terrorist financiers.

In a statement of agreed facts, CBA admitted that if it had listened to Austrac and limited the access criminal syndicates had to its machines, it could have disrupted gun runners and drug gangs importing and distributing methamphetamine.

The bank also failed to notify Austrac of six transactions that were made by five potential terrorist financiers.