Westpac says money laundering and counter-terrorism breaches may be 450,000 more than suspected
Westpac says an internal investigation has discovered it may have breached anti-money laundering and counter-terrorism finance laws on up to 450,000 occasions more than it previously thought.
The investigation was ordered in response to a money-laundering and child-exploitation scandal at the bank that resulted in legal action against it by the regulator and the resignation of its chief executive and chairman.
Austrac, the regulator, has told Westpac it may add any new breaches discovered by the investigation to the existing 23m breaches over which it is already litigating.
Westpac has already admitted breaching the law in the case, part of which revolves around customers who were sending money to the Philippines in a way consistent with paying for child exploitation.
The newly discovered potential breaches relate to a different reporting rule requiring banks to tell Austrac about any transaction in excess of $10,000.
In May Westpac said it had failed to report between 60,000 and 90,000 such transactions.
But on Tuesday it said that after further investigation, and a demand from Austrac for more information, it now believed that number could be as high as 175,000.
Separately, it said it had given Austrac about 365,000 reports about transactions above $10,000 that “may have contained incomplete or inaccurate information”.
It is believed this number relates to reports where multiple transactions were made in short succession totalling more than $10,000.
Under the rules every such transaction must be reported.
“A significant proportion of the potential reporting issues relate to a range of complex scenarios where the legislation requires Westpac to exercise judgment on how multiple transactions may be aggregated and whether a threshold transaction has actually occurred,” the bank told the stock exchange.
“Accordingly, not all of the above numbers may be breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act.”
Westpac’s chief executive, Brian Hartzer, and chairman, Lindsay Maxsted, announced their resignations in November after Austrac filed its lawsuit against the bank in the federal court.