The Commonwealth Bank could face enforcement action from US regulators over its alleged failure to comply with anti-money laundering laws, lawyers have said.
The troubled bank is already facing investigations from the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC), as well as civil penalty proceedings from the Australian Transaction Reports and Analysis Centre (AUSTRAC) and a potential shareholder class action.
The investigations are focused on the bank’s alleged non-compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. AUSTRAC claims that CBA failed to report many suspiciously large cash deposits made through its smart ATMs.
In addition, US lawyers have indicated that CBA could face regulatory action from abroad.
Fairfax reported yesterday that Edward Wilson Jr, a partner at Venable in Washington DC, told Thomson Reuters the American financial intelligence unit FinCEN would already be considering the case.
“FinCEN is already interested in this case,” Mr Wilson said.
“CBA has US branches and deals in US dollars. For both reasons, CBA will be required to comply with American AML [anti-money laundering] laws.”
Mr Wilson said the bank’s New York branch holds a US banking licence and could face regulatory action from the Office of the Comptroller of the Currency.
Sven Stumbauer, managing director of AlixPartners in New York and a specialist in anti-money laundering law, told Thomson Reuters that CBA would be looking at disclosing its issues to US regulators, as this can lead to more lenient treatment than if the regulators themselves uncover the issues.
The bank also operates in New Zealand and major Asian jurisdictions including Hong Kong, Japan and Singapore, which may expose it to regulatory action from these countries.
The Hong Kong monetary authority is known to be investigating CBA’s conduct.