Westpac agrees to ‘largest-ever civil penalty in Australian history’
Australian banking and financial services giant Westpac has reached an agreement with AUSTRAC to pay $1.3 billion for breaching anti-money laundering and counter-terrorism financing laws.
In an agreed statement of facts being lodged with the Federal Court Thursday morning, Westpac has admitted to over 23 million breaches, including a failure to report international funds transfers greater than $11 billion.
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If approved, the agreed penalty of $1.3 billion between Westpac and financial intelligence and regulatory agency AUSTRAC would represent the “largest-ever civil penalty awarded in Australian history”, Attorney-General Christian Porter said in a statement.
The settlement will be tax-deductible.
The new record would come close to doubling the previous benchmark of $700 million, paid by the Commonwealth Bank, in 2018.
Speaking on Thursday morning, Mr Porter said that the proposed penalty reflected the “significant and systematic” nature of compliance failures on the part of Westpac.
“While noting the penalty is still subject to the Federal Court’s approval, this should serve as a wake-up call to all financial institutions operating in Australia that the government is serious about maintaining a strong financial system and won’t tolerate serious non-compliance,” he said.
Minister for Home Affairs Peter Dutton added that the agreement shows that the government is serious about ensuring the integrity of Australia’s financial system while also protecting the community from crime.
“Banks have a responsibility to not let criminal activity go undetected and to protect Australians from serious and organised crime like child exploitation, drug trafficking and fraud,” he argued.
“They should be able to trust their banks and financial services they use daily to have strong systems in place to protect the community from crime. In this case, Westpac breached that trust and let their customers down, ultimately putting Australians at risk.”
In a statement, Westpac Group CEO Peter King apologised “sincerely” for the bank’s failings.
“We are committed to fixing the issues to ensure that these mistakes do not happen again. This has been my number one priority. We have also closed down relevant products and reported all relevant historical transactions,” he said.
“This agreement is an important step in the court process. It provides more certainty to all our stakeholders as we continue to implement the measures in our response plan and complete the implementation of recommendations from the reviews that have been conducted.”