PM ‘appalled’ at Westpac
WESTPAC’S chief executive says he will personally lead the bank’s response into accusations from the financial crime watchdog it persistently breached money-laundering and counter-terror laws.
Brian Hartzer said he was “utterly horrified” by accusations from AUSTRAC that Westpac had no due diligence around payments potentially funding child exploitation in South-East Asia.
In light of the revelations, Prime Minister Scott Morrison has demanded the big banks lift their game, saying he was “absolutely appalled”. AUSTRAC has taken Westpac to court over allegations the bank contravened the laws on more than 23 million occasions.
MORE than $3 billion has been stripped from Westpac’s market value after it was hit with the biggest anti-moneylaundering and counter-terrorism-financing legal case in Australian history.
Westpac shares fell more than 3 per cent yesterday after the Australian Transaction Reports and Analysis Centre alleged the nation’s second biggest bank breached antimoney-laundering and terrorism rules more than 23 million times.
The banking heavyweight allegedly failed to properly monitor and report transfers of $11 billion in funds between Australia and overseas, including locations in South East Asia that are hot spots for child sexual abuse.
Westpac also failed to properly monitor relationships allowing overseas banks to use its payment systems, despite those banks having business relationships with financial institutions in high risk locations, Austrac said in documents lodged with the Federal Court.
Such locations included Iraq, Lebanon, Ukraine, Zimbabwe and the Democratic Republic of Congo, the regulator said.
The bulk of Westpac’s alleged breaches relate to it failing to notify Austrac about international fund transfers made between 2013 and 2018.
Westpac had known since 2013 that its internal systems were not properly monitoring international fund transfers but did not fix them for years, Austrac alleges.
The case puts Westpac on track to receive the biggest fine in Australian corporate history. Last year, the Commonwealth Bank agreed to pay a $700 million fine after breaching anti-money-laundering and counter-terrorism-financing laws 53,506 times.
Among the most shocking claims is that Westpac failed to properly monitor or report a customer it knew had been jailed for child exploitation offences and stop the customer from sending frequent lowvalue payments to the Philippines.
Westpac also allegedly failed to carry out appropriate due diligence on 12 customers whose bank accounts were showing “repeated patterns of frequent low value transactions … that were indicative of child exploitation risks”.
Westpac chief Brian Hartzer said: “I am personally disgusted and appalled by the subject matter of some of these transactions”.
Mr Hartzer said the bank had self-reported the breaches to Austrac.