Friday, 04 August 2017 06:02

CBA on the hook over money-laundering charges Featured

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Automated cash-deposit machines are being blamed for the Commonwealth Bank allegedly violating Australian anti-money laundering and counter-terrorism financing laws.

A total of more than $77 million was said to have been laundered, according to the monitoring agency AUSTRAC which has taken the CBA to Federal Court in a civil case over the alleged offences.

AUSTRAC claims that CBA contravened the laws more than 53,700 times. Any transaction over $10,000 is supposed to be reported within 10 days.

money laundering

The maximum penalty for contravening the law is $18 million per breach.

AUSTRAC's summary of its allegations:

  • "CBA did not comply with its own anti money-laundering and counter-terrorism financing programme, because it did not carry out any assessment of the money laundering and terrorism financing risk of intelligent deposit machines before their rollout in 2012. CBA took no steps to assess the risk until mid-2015 - three years after they were introduced.
  • "For three years, CBA did not comply with the requirements of its programme relating to monitoring transactions on 778,370 accounts.
  • "CBA failed to give 53,506 threshold transaction reports to AUSTRAC on time for cash transactions of $10,000 or more through IDMs from November 2012 to September 2015.
  • "These late threshold transaction reports represent approximately 95% of the threshold transactions that occurred through the bank’s intelligent deposit machines from November 2012 to September 2015 and had a total value of around $624.7 million.
  • "AUSTRAC alleges that the bank failed to report suspicious matters either on time or at all involving transactions totalling over $77 million.
  • "Even after CBA became aware of suspected money laundering or structuring on CBA accounts, it did not monitor its customers to mitigate and manage the risk, including the ongoing risks of doing business with those customers."

AUSTRAC acting chief executive Peter Clark said: ""By failing to have sound anti money-laundering and counter-terrorism financing systems and controls in place, businesses are at risk of being misused for criminal purposes.

"AUSTRAC's goal is to have a financial sector that is vigilant and capable of responding, including through innovation, to threats of criminal exploitation.

"We believe this can be achieved by working collaboratively with and supporting industry. We will continue to work in this way with our industry partners who also share this aim and demonstrate a strong commitment to it."

CBA said in a statement it was reviewing the allegations and would respond "in due course".

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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