Australian bank Westpac, the second largest in the country, has reached an agreement to pay a historic fine for violating the money laundering law, including transactions that could be related to child exploitation.
The fine, which must receive the approval by the Federal Court, amount to AU$ 1.3 billion, announced this Thursday the bank itself and the Australian Transaction Reports and Analysis Centre (AUSTRAC) in separate statements.
“I would like to sincerely apologize for the bank’s failures. We are committed to resolving the issues so that we do not make these mistakes again. This has been my number one priority,” said the bank’s CEO Peter King.
The chief executive said that he has made “significant investments” to strengthen control systems and recruited 200 experts in financial crimes to detect and prevent “suspicious transactions” from now on.
Austrac, the government financial watchdog agency, recalled that this is the largest fine paid in Australia and Westbank violated the anti-money laundering law on more than 23 million occasions, including “suspicious transactions possibly related to child exploitation”.
The bank has acknowledged that it failed to inform Australian regulators of more than 19.5 million international transactions valued at 11 billion Australian dollars between 2013 and 2018.
In addition, the entity was not transparent about the origin of some of the international transfers nor did it carry out controls to assess risks, according to the agency.
Austrac chief executive Nicole Rose said “this fine reflects Westpac’s serious and systematic lack of diligence” and that the bank’s negligence hampered police investigations by security forces due to the lack of information. Rose pointed out that the high number of violations over the years was unacceptable and that it could have been prevented with the proper controls.
In November last year, Austrac denounced the bank in Federal Court for numerous irregularities, including transactions carried out with the Philippines and other Southeast Asian countries “potentially linked to child exploitation.”
On December 2, then-Westpac CEO Brian Hartzer resigned from his post after the board of directors accepted the “seriousness” of the issues reported.