TIA welcomes AUSTRAC investigation into allegations of Westpac involvement in money laundering

22 November 2019

Transparency International Australia (TIA) commends AUSTRAC, Australia’s financial intelligence agency, for investigating and legally pursuing all cases of alleged breaches of the Anti-Money Laundering and Counter-Terrorism-Financing Act (AML/CTF).


AUSTRAC’s investigation into Westpac’s alleged breaches of anti-money laundering laws is exactly what Australians expect the AML/CTF regulator to do.” Said Serena Lillywhite, CEO of Transparency International Australia.


“Under the leadership of AUSTRAC CEO, Nicole Rose, it appears the regulator is stepping up its responsibility to investigate and expose non-compliance with anti-money laundering laws. This is a positive step given both community concern and the findings of the Hayne Royal Commission that corporate regulators have been too soft in holding companies to account.


“AUSTRAC’s investigation and the reported scale of the violation of the Act –23 million separate breaches, involving $11 billion in transactions, including facilitating possible child exploitation in South-East Asia through financial transactions–should sound the alarm for all banks.


“The Westpac case, if proven, and following hot on the heels of similar AML breaches by CBA in 2017, indicates it is no longer appropriate for banks to simply report, but not act. “The case again highlights how serious and systemic non-compliance leaves our financial system wide open to being exploited by criminals, with often devastating impacts on the victims of criminal activity.


“The AM/CTF Act exists to stop criminals profiting from their crimes. When criminals are able to clean and collect their dirty money, they can escape justice for years. Lax banks and other financial institutions have too often enabled them to profit from their crimes, perpetuating exploitation, abuse and injustice.

“Money laundering appears far too easy in Australia. Financial institutions need to work harder at identifying who is making the transactions, where funds have come from, and who will benefit from the transactions. The principle of ‘know your customer’ should be obvious,

and reporting of suspicious transactions is required by law, but closing accounts must be the next step.


“All banks need to exercise much better due diligence across all transnational transactions. The international financial system needs to be better connected and better share information. At a minimum, banks should know the origin of funds, what countries and institutions funds pass through, and who is the ultimate beneficiary of financial transactions.


“The Westpac case, if proven, highlights the risk of illicit financial transactions, often the proceeds of crime, being laundered through Australia and other major financial markets. It highlights the speed, and apparent ease, with which suspicious transactions and the transfer of funds can occur with anonymity.


“The Westpac case will be investigated as a civil rather than criminal case, with the potential for hefty fines. The public has a right to know why criminal charges are not pursed when laws are broken by the banks.”


Note: Westpac is a member of Transparency International Australia. TIA is engaging directly with the bank to encourage the strengthening of their internal systems and controls, and compliance with AML laws and the criminal code.