Westpac admits money-laundering breaches
Westpac has admitted to millions of breaches of anti-money
laundering and counter-terrorism laws in a filing in Federal Court, but denied
accusations it enabled illegal payments between known child sex offenders.
In its defence filing, Australia's second largest bank on
Friday admitted it had failed to correctly report various international
transfers of funds as required by law, adding that it accepted the gravity of
the issues raised by the regulator AUSTRAC.
The Sydney-based lender has already set aside $900 million
for an expected fine from the case.
"Westpac and AUSTRAC continue to engage constructively
and are discussing a Statement of Agreed Facts and Admissions," the lender
said in the separate statement released to the media.
The statement said Westpac had admitted to record-keeping
failures and inadequate customer due diligence, as well as breaches of certain
correspondent banking obligations.
Last November, AUSTRAC filed a civil lawsuit accusing the
bank of presiding over 23 million payments that violated anti-money laundering
protocols, including payments by Australians to child pornography purveyors in
the Philippines.
In the 57-page document filed with the court, Westpac denied
AUSTRAC'S accusation that it failed to identify activity indicative of child
exploitation risks.
It said its monitoring programme complied with the law and
noted that it had implemented detection systems to monitor "heightened
child exploitation risks associated with low-value payments" to the
Philippines through its low-value money transfer product LitePay.
Westpac also admits that between 2013 to 2018, it failed to
report to AUSTRAC 19,428,039 international transfer reports within 10 business
days, as required by law.
It denies however, that it failed to carry out transaction
risk assessments but admits those were not sufficient to identify reasonable
risks including that banking services it provided through banks in other
countries might "inadvertently or otherwise" involve or facilitate
money laundering or financing of terrorism.
It also admitted its risk rating systems ignored when its
counterparty banks operated in jurisdictions "subject to trade or
financial sanctions", the document shows.
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