Westpac has unearthed more transaction reporting failures, disclosing in yesterday’s March- half financial report that as many as 90,000 threshold transaction reports have not been reported to Austrac.
Last November, Austrac applied to the Federal Court for civil penalty orders against Westpac after finding that there was systemic non-compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act.
Austrac alleged that Westpac contravened the Act on more than 23 million occasions.
Austrac’s most damning accusation was that the bank failed to carry out appropriate due diligence on transactions to the Philippines and South East Asia that had known financial indicators relating to potential child exploitation risks.
Westpac self-reported its failure to report a large number of international funds transfer instructions, acknowledging that “these issues should never have occurred”. The bank’s board issued an apology.
Yesterday, the bank reported that in addition to the AML/CTF response plan and the financial crime improvements following the commencement of the Austrac proceedings, it is working on a multi-year program of work that is required to rectify its management of financial crime risks, sanctions, anti-bribery and other reporting standards.
The bank said it is continuing to implement a number of improvements to its AML/CTF program, governance, policies, systems and controls, including in relation to the issues identified in Austrac’s statement of claim.
Remediation work covers areas such as customer identification, customer and payment screening, risk assessments, ensuring appropriate controls over information relevant to the “tipping off” provisions and enhanced customer due diligence.
The bank said: “As part of these efforts, Westpac has identified deficiencies in certain systems and controls relevant to its obligation to file threshold transaction reports.
“This has, over a number of years, resulted in instances where the group has failed to report TTRs, as well as instances where the group filed TTRs with incomplete or inaccurate information.”
A threshold transaction is the transfer of physical currency of A$10,000 or more (or the foreign currency equivalent) as part of a designated services. A reporting entity must report these transfers to Austrac.
The bank has self-reported these deficiencies to Austrac and is keeping Austrac apprised of the status of its investigations.
To date, the remediation has involved the late reporting of 17,780 TTRs to Austrac. Additionally, there are multiple TTR reporting scenarios which, based on the preliminary analysis undertaken to date, could amount to an estimated 60,000 to 90,000 TTRs that have not been reported to Austrac.
The bank’s March half financial report includes a $900 million provision in relation to Austrac’s claim and $130 million for costs associated with its response plan.