Australian court flags trial of Westpac in 2021 over financial crime allegations
A trial of Westpac Banking Corp over accusations of systemic
breaches of money laundering laws that enabled illegal payments between known
child sex offenders could take place in the first half of 2021, an Australian
court said on Wednesday.
The country’s second-largest lender and the financial crimes
watchdog, AUSTRAC, have failed to agree on a set of facts, setting the stage
for a trial that could start early next year, before the court can approve any
fine for the bank.
“It seems like the section 81/section 85 question is
something that may have to proceed to a trial of liability,” judge Jonathan
Beach said in a Melbourne court, referring to legal requirements to maintain an
appropriate anti-money laundering and counter-terrorism financing program.
“The other contraventions seem to be agreed in substance by
Westpac.”
In a bombshell lawsuit in November, AUSTRAC sued Westpac for
23 million alleged breaches of anti-money laundering laws, including payments
between known child exploiters.
Earlier this month, the regulator said it was investigating
new issues reported by Westpac, including suspicious matters related to
potential child exploitation and issues involving 272 customers, a process that
has delayed proceedings, the court heard on Wednesday.
“The scale of those reports and the substance of those
reports has already raised concerns which ... AUSTRAC needs to work through,”
AUSTRAC lawyer Wendy Harris told the court.
“So there is a real prospect that the AUSTRAC CEO will
complete an investigation and say we need to put forward some additional
allegations.”
The investigation of the new matters would involve tens of
thousands of documents, such as customers’ statements of accounts, some of
which would need to be produced manually, Westpac’s lawyer said.
The first liability hearing is expected to take place in the
first quarter of 2021, Beach said.
The hearing was adjourned until Sept. 18, a date by which
the court expects AUSTRAC to have lodged any new allegations, and Westpac to
have tabled its defence.
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