CBA to pay $700 million fine for breaching anti-money laundering, counter-terror financing laws

4 June 2018

CBA to pay $700 million fine for breaching anti-money laundering, counter-terror financing laws

The Commonwealth Bank will pay a $700 million fine for breaching anti-money laundering and counter-terror financing laws.

It comes after the financial intelligence agency AUSTRAC accused the bank in 2017 of serious and systemic breaches of the laws.

According to a statement made by AUSTRAC, CBA has admitted to the late filing of 53,506 reports on transactions above $10,000 made through its intelligent deposit machines (IDMs), and that 149 suspicious matter reports were either filed late or not at all.

The bank has also admitted it did not conduct checks on 80 suspicious customers and failed to properly monitor transactions on a number of accounts between October 2012 and October 2015.

AUSTRAC’s investigation also revealed 14 occasions where CBA failed to adequately assess risks relating to its IDMs.

The agreement requires the approval of the Federal Court, but AUSTRAC says the agreement is a warning to other banks.

“I hope this result alerts the financial sector to the consequences of poor compliance, and reinforces that businesses need to take their obligations seriously,” AUSTRAC chief executive Nicole Rose said.

“We will continue to work collaboratively with CBA as it progresses this work, and I am encouraged by the manner in which CBA has handled these negotiations. We want compliance to be voluntary, and even taken on with enthusiasm, however we will not shy away from using our enforcement powers where necessary.”

The Commonwealth Bank’s CEO Matt Comyn said the bank acknowledges the gravity of the breaches, saying in a statement:

“While not deliberate, we fully appreciate the seriousness of the mistakes we made.

“Our agreement today is a clear acknowledgement of our failures and is an important step towards moving the bank forward. On behalf of Commonwealth Bank, I apologise to the community for letting them down.

“We are committed to build on the significant changes made in recent years as part of a comprehensive program to improve operational risk management and compliance at the bank.

“To date we have spent over $400 million on systems, processes and people relating to AML/CTF (anti-money laundering/counter-terrorism financing) compliance and will continue to prioritise investment in this area.”