Commonwealth Bank says ‘coding error’ explains alleged money-laundering breaches
SYDNEY: The Commonwealth Bank of Australia (CBA) said on Monday a software “coding error” was responsible for the “vast majority” of the anti-money laundering law breaches it was accused of last week.
The Australian government last week accused the country’s biggest mortgage lender of widespread breaches of money-laundering and counter-terrorism financing rules, sending the bank’s shares sliding.
The issue centres on the use of automatic teller machines that accept deposits instantly by both cash and cheque, facilitating anonymous deposits, and whether the bank failed to identify, monitor and report transfers over US$10,000, the limit in Australia.
Financial intelligence agency AUSTRAC said the bank made 53,700 contraventions of the anti-money laundering and counter-terrorism financing Act, particularly with regards to so-called intelligent deposit machines, or IDMs, rolled out in 2012.
CBA is defending against the charges.
The bank said on Monday that a software update installed late in 2012 caused a “coding error” which meant the machines did not create required transaction reports, called threshold transaction reports (TTRs). The error went unnoticed until 2015, the bank said.
“Within a month of discovering it, we notified AUSTRAC, delivered the missing TTRs and fixed the coding issue,” CBA said in a statement.
“The vast majority of the reporting failures alleged in the statement of claim (approximately 53,000) relate specifically to this coding error. We recognise that there are other serious allegations in the claim unrelated to the TTRs.” — Reuters