Reuters logo
Australian regulator clears other major banks of money laundering breaches
August 18, 2017 / 8:03 AM / in 3 months

Australian regulator clears other major banks of money laundering breaches

SYDNEY (Reuters) - Australia’s money-laundering regulator has found no breaches similar to those of the country’s biggest mortgage lender, Commonwealth Bank of Australia (CBA.AX), at other major banks, after a check of their systems, a top official said on Friday.

Financial intelligence agency AUSTRAC this month launched a civil lawsuit against CBA - Australia’s biggest bank by market value - for “serious and systemic” breaches of money laundering rules.

CBA has said it is preparing a defense, while adding that it would never deliberately undertake action that enables crime.

“We’ve looked at the other banks in particular and we have not identified the same issues with the other banks,” Peter Clark, the agency’s acting chief executive, told parliament, when asked if it was looking at extending its investigation.

“Our focus is on the current matter in front of the court. We are intending to prosecute that fully,” he added.

Australia’s four major banks - CBA, Westpac (WBC.AX), ANZ Banking Group (ANZ.AX) and National Australia Bank (NAB.AX) - are highly profitable and among a handful of highly-rated financial institutions in the world.

AUSTRAC’s unprecedented legal action shook Australia’s financials industry and forced CBA to scrap the bonus of its chief executive, who is set to retire by next June, amid scathing criticism from investors and regulators.

The legal proceedings against CBA are “credit negative”, Fitch Ratings said in a separate announcement on Friday, adding that it expected to be able to better judge the significance of the issues once the bank lodged its legal defense.

“Evidence of widespread failings would be likely to have negative implications for the ratings or outlook even if the bank suggests that these have been fixed or are in the process of being fixed,” Fitch said.

AUSTRAC has alleged that some of the cash transactions made through CBA had potential links to extremism financing. Others involved money-laundering syndicates subject to police investigations.

A drug import and distribution syndicate deposited more than A$21 million ($16.6 million) in cash into 11 CBA accounts between February 2015 and May 2016, according to a court filing.

The bank allowed several of these accounts to operate even after being warned by federal police that they were connected with an investigation into serious offences, AUSTRAC alleged.

($1=1.2623 Australian dollars)

Reporting by Swati Pandey; Additional reporting by Paulina Duran; Editing by Clarence Fernandez

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below