Commonwealth Bank of Australia (CBA) has settled its proceedings with the Australian Transaction Reports and Analysis Centre (AUSTRAC), the financial intelligence agency set up to monitor trade-based financial crime.

In a statement released to the Australian Stock Exchange, CBA said it would pay A$702.5 million (US$541.5 million) to settle the matter that involved serious breaches of anti-money laundering and counter-financing of terrorism (AML/CFT) regulations.

The settlement figure is almost double the bank’s earliest estimates of $375 million, which reflects the increasing number of contraventions of AML/CFT regulations found during AUSTRAC’s inquiries.

Bank failures

For a period of three years, AUSTRAC found that 778,370 accounts were not monitored in accordance Australian AML/CFT laws.

The bank also failed to carry out a proper assessment of the money laundering risks presented by its ATM network.

Record penalty

CBA was late filing 53,506 suspicious matter reports for sums of A$10,000 or more worth A$625 million and failed to report additional transactions worth tens of millions of dollars on time or at all.

The bank did not monitor customer accounts even after it became aware of suspected money laundering.

The settlement, if approved by the Federal Court, will be the largest civil penalty in Australian history.

Categories: Trade Based Financial crimes News