Australia’s largest bank faces new money laundering charges

SYDNEY: Australia’s financial intelligence agency expanded an anti-money laundering probe into Commonwealth Bank on Thursday to include new claims that it failed to adequately monitor suspected terrorist financiers.

The lender, the country’s largest company by market capitalisation, was already facing a civil case by AUSTRAC in August. It alleged the bank engaged in “serious and systemic non-compliance” of anti-money laundering laws involving thousands of transactions.

In its first response, Commonwealth late on Wednesday admitted 53,506 breaches, saying it was due to a “systems-related error”, but added that it would defend a host of others claims brought against it.

“We contest a number of allegations but admit others, including the allegations relating to the late submission of 53,506 threshold transaction reports (TTRs), which were all caused by the same systems-related error,” it said.

The bank is accused of failing to deliver to AUSTRAC on time reports for cash transactions of Aus$10,000 (US$7,700) or more at ATMs between November 2012 and September 2015, with a total value of Aus$624.7 million.

The financial giant could face a massive fine, with the matter due in court in March.

But the lender said it would defend more than 100 other claims regarding single its alleged failure to disclose suspicious transactions on time, or not at all.

Adding to its woes, AUSTRAC filed a further 100 additional alleged contraventions on Thursday, which were identified since its earlier charges were made.

They include two instances where the bank is accused of failing to inform the regulator of its suspicions relating to the financing of terrorism within the required 24 hours.

It is also accused of not reporting 54 suspicious matters either on time, or at all, in relation to accounts and individuals being investigated by police. “These allegations are very serious and reflect systemic noncompliance over approximately six years,” AUSTRAC chief executive Nicole Rose said.

The initial AUSTRAC case prompted other regulators to launch inquiries into the embattled bank over its handling of the issue and its organisational culture. A class action has also been filed over non-disclosure issues.

The August revelations sparked renewed calls for the government to launch a full investigation into Australia’s finance industry, which has been hit by a series of scandals around financial advice, life insurance and mortgage fraud.

Canberra finally relented last month, saying the probe was needed to restore faith in the massively profitable banking sector.