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CBA/AUSTRAC case may not go to court

The legal case between the Commonwealth Bank and AUSTRAC regarding breaches of money laundering and counter-terrorism laws will be referred to mediation rather than being dealt with in court.

According to orders made by the Federal Court of Australia this week, the matter relating to the major bank’s alleged breaches of the anti-money laundering/counter-terrorism funding (AML/CTF) regime will be referred to mediation. 

The Australian Transaction Reports and Analysis Centre (AUSTRAC) last year initiated civil penalty proceedings in the Federal Court against the Commonwealth Bank of Australia (CBA) for “serious and systemic non-compliance” with anti-money laundering and counter-terrorism laws. 

It is alleged that the bank breached AML/CTF on a plethora of occasions — with CBA having admitted 11 of the allegations already, including the late reporting of 53,506 threshold transaction reports. 

If the bank were to be charged the maximum penalty for each of the breaches, it could be fined more than $1 trillion. 

However, CBA has argued that the breaches should be considered a “single course of conduct”.

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While CBA has admitted some breaches, it has rejected 89 of 100 additional charges laid at its feet by AUSTRAC in December.

The Federal Court has given orders that AUSTRAC file and serve any reply to the amended defence by 6 April 2018 and set a timetable for evidence in the proceedings should the mediation be unsuccessful.

The mediation is expected to occur no later than 25 May 2018, with a further case management hearing to be held on 7 December 2018. 

[Related: CBA denies new AUSTRAC allegations]

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>According to orders made by the Federal Court of Australia this week, the matter relating to the major bank’s alleged breaches of the anti-money laundering/counter-terrorism funding (AML/CTF) regime will be referred to mediation. 

The Australian Transaction Reports and Analysis Centre (AUSTRAC) last year initiated civil penalty proceedings in the Federal Court against the Commonwealth Bank of Australia (CBA) for “serious and systemic non-compliance” with anti-money laundering and counter-terrorism laws. 

It is alleged that the bank breached AML/CTF on a plethora of occasions — with CBA having admitted 11 of the allegations already, including the late reporting of 53,506 threshold transaction reports. 

If the bank were to be charged the maximum penalty for each of the breaches, it could be fined more than $1 trillion. 

However, CBA has argued that the breaches should be considered a “single course of conduct”.

While CBA has admitted some breaches, it has rejected 89 of 100 additional charges laid at its feet by AUSTRAC in December.

The Federal Court has given orders that AUSTRAC file and serve any reply to the amended defence by 6 April 2018 and set a timetable for evidence in the proceedings should the mediation be unsuccessful.

The mediation is expected to occur no later than 25 May 2018, with a further case management hearing to be held on 7 December 2018. 

[Related: CBA denies new AUSTRAC allegations]

CBA/AUSTRAC case may not go to court
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Annie Kane

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. 

Contact Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

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