SYDNEY: A second major Australian bank has flagged “weaknesses” in its anti-money laundering controls, months after the financial intelligence agency took the country’s largest firm to court over alleged breaches of the laws.
AUSTRAC filed a civil case against Australia’s biggest bank, the Commonwealth, in August for alleged “serious and systemic non-compliance” over what it said were 50,000 instances of misconduct.
The case sparked renewed calls for a royal commission to investigate the big banks, and led the Commonwealth Bank — the nation’s largest company by market capitalisation — to announce that chief executive Ian Narev would retire next year.
The National Australia Bank (NAB) said in its annual report published Tuesday that it was strengthening anti-
money laundering and counter-terrorism financing programmes.
NAB added that it was “currently investigating and remediating a number of identified issues”, including “certain weaknesses” with the implementation of consumer identification requirements that impact transaction monitoring.
It warned the “outcomes… are uncertain”.
“It is possible that, as the work progresses, further issues may be identified and additional strengthening may be required,” the bank said.
Shares in NAB edged 0.33 percent lower to Aus$29.84 in mid-day trade in Sydney Thursday.
NAB’s chief risk officer, David Gall, said the bank took its anti-money laundering obligations “extremely seriously” and it did not have compliance issues with AUSTRAC.
“We have anti-money laundering policies and processes in place, and if we find weaknesses in these, we work hard to strengthen and fix them immediately,” he said in a statement late Wednesday.
CBA is facing an open class action claiming that the bank neglected its disclosure obligations as a listed company and hurt shareholders who bought its stock, in relation to the allegations raised in the AUSTRAC case.
Other Australian regulators also launched inquiries into CBA over its handling of the alleged breaches and its organisational culture.
The bank is accused of failing to deliver to AUSTRAC on time thousands of reports of cash transactions totalling Aus$624.7 million (US$475 million).
Some of the allegations included suspected members of a crime syndicate using fake names and IDs to make separate cash deposits to CBA accounts that totalled millions of dollars, according to AUSTRAC’s 583-page statement of claim.