CBA responds to breach of money laundering laws

14 December 2017

The Commonwealth Bank of Australia (CBA) has confirmed its accountability for more than 53,000 beaches of money laundering and counter-terrorism laws in a defence case provided to the Australian Transaction Reports and Analysis Centre (AUSTRAC), but continues speaking out in defence of its conduct.

CBA filed its defence in relation to the allegations with AUSTRAC yesterday, with the money laundering regulator set to up the ante with more allegations today related to the bank’s submission of 53,506 threshold transaction reports (TTRs).

The breach of statutory laws brought to light by AUSTRAC earlier this year has exposed CBA to the possibility of multi-million dollar fines, more than 100 of which it is set to defend itself from in March next year.

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The bank has blamed an error in the process of merging systems which caused automated monitoring which then failed to operate as intended across a total of 778,370 accounts.                                                                                 

“We contest a number of allegations but admit others, including the allegations relating to the late submission of 53,506 threshold transaction report,” the bank said in a statement.

“If an amended claim is served on us, we expect the court would set a timetable for CBA to file an amended defence.”

Within its statement released yesterday, the CBA confirmed the following:

  • It did not adequately adhere to risk assessment requirements for Intelligent Deposit Machines (IDMs) - but does not accept that this amounted to eight separate contraventions.
  • It’s responsibility (in whole or in part) for 52 allegations concerning ongoing customer due diligence requirements.
  • The bank was late in filing 53,506 TTRs, which all resulted from the same systems-related error, representing 2.3 per cent of TTRs reported by CBA to AUSTRAC between 2012 and 2015;
  • Fault (in whole or in part) for 91 allegations concerning suspicious matter reports (SMRs).

In defence, the same statement confirmed the bank denied a further 83 allegations in relation to SMRs, and 19 in relation to due diligence requirements.

CBA also faces shareholder class action, as well as an Australian Prudential Regulation Authority (APRA) review into risk culture protocol. 

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