Coun­try’s No. 1 lender ac­cused of fail­ing to re­port sus­pi­cious trans­ac­tions to­talling A$77m

New Straits Times - - Business - SYD­NEY

THE gov­ern­ment yes­ter­day ac­cused the coun­try's big­gest mort­gage lender, Com­mon­wealth Bank of Aus­tralia (Com­mBank), of wide­spread breaches of money-laun­der­ing and counter-ter­ror­ism fi­nanc­ing rules.

Fi­nan­cial in­tel­li­gence agency Austrac said it had ini­ti­ated civil penalty pro­ceed­ings in the Fed­eral Court against Com­mBank for “se­ri­ous and sys­temic non­com­pli­ance”, in the big­gest case of its kind in Aus­tralia and the first against a ma­jor bank.

Com­mBank said in a state­ment it was re­view­ing the al­le­ga­tions and would re­spond “in due course”.

Aus­tralia’s big­gest mort­gage lender failed to re­port sus­pi­cious mat­ters “ei­ther on time or at all in­volv­ing trans­ac­tions to­talling over A$77 mil­lion (RM261.6 mil­lion)”, said Austrac.

The agency al­leged 53,700 con­tra­ven­tions of the Anti-Money Laun­der­ing and Counter-Ter­ror­ism Fi­nanc­ing Act, par­tic­u­larly with re­gards to so-called in­tel­li­gent de­posit ma­chines (IDMs).

The pre­vi­ous big­gest such case came against Aus­tralia’s top book­maker Tab­corp Hold­ings, ear­lier this year, with only 108 al­leged breaches.

Tab­corp paid A$45 mil­lion in fines, the big­gest civil penalty in Aus­tralian cor­po­rate his­tory.

The max­i­mum penalty for con­tra­ven­ing the anti-money laun­der­ing and counter ter­ror­ism fi­nanc­ing law is A$18 mil­lion per breach.

IDMs are a type of au­to­mated teller ma­chine that ac­cepts de­posits by both cash and cheque, and fa­cil­i­tate anony­mous cash de­posits.

There had been sig­nif­i­cant growth in the use of Com­mBank’s IDMs since their roll­out in May 2012, said Austrac.

Cash de­posits in the six months to June last year surged to A$5.8 bil­lion com­pared with A$89 mil­lion in the first six months af­ter Com­mBank in­tro­duced the ma­chines.

Cash was de­posited us­ing fake names with pro­ceeds go­ing to drug im­por­ta­tion syn­di­cates, Austrac al­leges in its fil­ings.

Com­mBank ac­counts were also used for “cuckoo smurf­ing”, a form of money laun­der­ing which in­volves trans­fers be­tween coun­tries with­out the need for money to ac­tu­ally cross in­ter­na­tional bor­ders, Austrac added. Reuters


A man us­ing a Com­mon­wealth Bank au­to­mated teller ma­chine in Syd­ney. The bank has been ac­cused of ‘se­ri­ous and sys­temic non­com­pli­ance’ of anti-money laun­der­ing and counter-ter­ror­ism fi­nanc­ing laws.

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