The government’s financial intelligence and regulatory body outlined that the additional alleged contraventions were identified after the civil penalty proceedings were instituted through AUSTRAC’s ongoing investigation into CBA.
“These allegations are very serious and reflect systemic non-compliance over approximately six years,” AUSTRAC CEO Nicole Rose said.
AUSTRAC now alleges over 53,800 contraventions of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF).
It added: “The maximum penalty for an individual contravention alleged in the amended statement of claim is up to $21 million.”
As such, if CBA is found guilty and charged the maximum penalty for each of the 53,800 breaches, it could be fined more than $1.1 trillion.
The additional allegations are:
- CBA failed to report two suspicious matters within 24 hours of forming a suspicion relating to the financing of terrorism.
- CBA failed to report 54 suspicious matters either on time or at all in relation to accounts and individuals that were the subject of two further law enforcement operations.
- Even after CBA became aware of suspected terrorism financing, money laundering and/or structuring on CBA accounts, in 38 instances it “did not appropriately monitor its customers to mitigate and manage money laundering and terrorism financing (ML/TF) risk”, including the ongoing ML/TF risks of doing business with those customers.
- In six instances additional to those in the original statement of claim, CBA did not comply with the requirements of its own AML/CTF program to identify, mitigate and manage the ML/TF risks associated with intelligent deposit machines (IDMs).
Ms Rose said that AUSTRAC is continuing to work with CBA to help strengthen its AML/CTF processes. She added that CBA is also collaborating with AUSTRAC in its private/public sector partnership, the Fintel Alliance and AUSTRAC’s Smarter Regulation initiative.
“As Australia’s AML/CTF regulator, we work with our 14,000 reporting entities to strengthen their AML/CTF programs and work to prevent future non-compliance, as well as collaborating on improving Australia’s AML/CTF architecture,” Ms Rose said. “This is integral to protecting the community from serious and organised crime and terrorism.”
In a statement to the ASX, CBA said that it would “review the amended statement of claim and update the market as appropriate”, adding that it will file an updated defence “in due course”.
The bank lodged its initial defence last week, admitting to some claims but refuting others.
CBA said that it had commenced a program in 2015 to “significantly upgrade” its compliance operations with regards to anti-money laundering and counter-terrorism financing regulation, and the program had continued in the last 12 months.
“During 2017, we have stepped up the rigour and intensity of the program and extended it across all aspects of financial crime obligations and all business units to further strengthen regulatory compliance,” the bank said.
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.