Westpac Group has issued an update on its internal investigation of reporting failures relating to financial crime regulator AUSTRAC’s investigation into over 23 million alleged breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act (AML/CTF).
In its 2020 interim financial results presentation, published in May, Westpac reported that it had identified up to 90,000 threshold transactions – the transfer of at least $10,000 in physical currency – that had not been disclosed to AUSTRAC upon the commencement of its investigation.
Westpac also reported that it had identified threshold transaction reports (TTRs) that were filed with incomplete or inaccurate information.
However, in a new update issued on Tuesday (28 July), Westpac has revealed that following further investigation, conducted in response to a notice from AUSTRAC, it has identified approximately 175,000 separate transactions that have not been disclosed to AUSTRAC and approximately 365,000 TTRs, which may have contained incomplete or inaccurate information.
Westpac attributed a “significant proportion” of its reporting failures to a “range of complex scenarios” relating to legislative guidance, which permitted the bank to “exercise judgement on how multiple transactions may be aggregated and whether a threshold transaction has actually occurred”.
As such, Westpac stressed that not all of the newly disclosed threshold transactions may be breaches of its legal obligations, adding that “the numbers above may change”.
AUSTRAC has previously informed Westpac that in light of its new disclosures, it may amend its statement of claim to include further alleged breaches of AML/CTF laws.
Mortgage Business reached out to AUSTRAC for a statement on Westpac’s latest admission but the regulator declined to comment on the matter as it is still before the courts.
In June, Westpac released the results of its investigation into the AML/CTF compliance issues raised by AUSTRAC last year, as well as the full Advisory Panel report into the board’s governance of AML/CTF obligations and the findings of Promontory’s accountability review.
Westpac admitted that it failed to report around 19.5 million IFTIs to AUSTRAC over a six-year period, which it attributed to a mixture of both technological and human error dating back to 2009.
Earlier this month, Westpac also published a reassessment report from global consultancy firm Promontory, which includes findings from a review into the bank’s culture, governance and accountability remediation plan.
The independent review found that key elements of Westpac’s non-financial risk culture are “immature and reactive”.
According to Promontory, Westpac’s “overly complex” risk culture resulted in “confusion around accountability and challenges in execution”.
These shortcomings were found to have been identified by each of the bank’s “three lines of defence”, demonstrating that further change was required to “address identified weaknesses”.
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Charbel Kadib is the news editor on the mortgages titles at Momentum Media.
Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.