CBA facing new AUSTRAC launder allegations

The historic case has claimed a CEO triggered a royal commission and threatens huge fines

The historic case has claimed a CEO triggered a royal commission and threatens huge fines

It was alleged by Australia's financial intelligence and regulatory agency in August that CBA had been involved in "serious and systemic non-compliance" with the Act, originally detailing 53,700 alleged breaches, which included failing to hand 53,506 threshold transaction reports (TTRs) for cash transactions over AU$10,000 to Austrac through intelligent deposit machines (IDMs) for nearly three years between November 2012 and September 2015.

Six instances of failing to follow its own procedures to identify, mitigate and manage risk of intelligent deposit machines being used for money laundering or terrorism financing.

AUSTRAC chief executive Nicole Rose said the additional alleged contraventions were identified after civil penalty proceedings were first initiated in August.

AUSTRAC now alleges more than 53,800 contraventions of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

It has admitted to 91 of 174 of AUSTRAC's original allegations that it failed to properly submit suspicious matter reports (SMRs), and will argue that many of those relate to reports that were missing specific transaction details, and should not result in a civil penalty.

It's responsibility (in whole or in part) for 52 allegations concerning ongoing customer due diligence requirements.

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And even after the bank became aware of suspected terrorism financing, money laundering and/or structuring on CBA accounts, in 38 instances it did not appropriately monitor its customers.

The maximum penalty for each alleged contravention in the amended statement of claim is $21 million.

The bank has blamed an error in the process of merging systems which caused automated monitoring which then failed to operate as intended across a total of 778,370 accounts. "We will file an amended defence in due course".

The defence includes an admission that it was late in filing more than 53,500 reports of transactions of $10,000 or more through its intelligent deposit-taking ATMs between 2012 and 2015.

"During 2017 we have stepped up the rigour and intensity of the program and extended it across all aspects of financial crime obligatons and all business units to further strengthen regulatory compliance", the Bank said.

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