PRIME Minister Scott Morrison has demanded the major banks lift their game on money laundering and terror financing laws, saying he’s appalled by allegations levelled at Westpac.
The financial intelligence watchdog has alleged Westpac broke the law 23 million times by not reporting 19.5 million international fund transfers.
AUSTRAC chief executive Nicole Rose said the transactions amounted to more than $11 billion over nearly five years.
Mr Morrison said the investigation showed the government’s cop on the beat was doing its job.
“I’m appalled. I’m absolutely appalled,” he told reporters in Brisbane on Wednesday.
“They’ve just got to lift their game on this stuff.”
Ms Rose said Westpac failed to pass on information about the origin of international funds transfers and keep required records.
She said the bank also failed to do customer due diligence on high-risk transactions to the Philippines and Southeast Asia with potential child exploitation risks.
“AUSTRAC alleges that Westpac’s oversight of its corresponding banking services was deficient, and that its oversight of its anti-money laundering and counter-terrorism financing program was also deficient.”
National Australia Bank last week admitted it faces a huge fine for multiple possible breaches of counter terrorism and anti-money laundering laws.
Commonwealth Bank was fined a record $700 million in 2018 for serious breaches of the same laws.
Mr Morrison said despite the controversies, the banks needed to continue supporting home buyers and small businesses.
“All of this is not a leave pass to pull up the drawbridge in terms of the credit extension into the Australian economy,” he said.
Westpac says it self-reported the failure to report a large number of international funds transfer instructions to AUSTRAC.
“AUSTRAC was also investigating a number of other areas relating to Westpac’s processes, procedures and oversight,” the company said in a statement.
“Westpac is currently reviewing AUSTRAC’s statement of claim and will issue a further statement to the ASX once it has been assessed.”
Any penalties will be decided in court, with civil proceedings now underway.
Ms Rose said the failures resulted in serious and systemic breaches of anti-money laundering and counter-terrorism financing laws.
“This resulted in a significant loss of intelligence to AUSTRAC and our national security and law enforcement partners,” Ms Rose said.
She said business were the first line of defence to protect the financial system from criminal abuse.
“This is an important reminder to all financial services businesses to be vigilant about money-laundering and counter-terrorism financing risks and understand their obligations.”