Westpac Appears in Court Over Accusations of 23 Million AML Breaches

Published On December 12, 2019

12 December 2019: On 9 December, Australia’s No.2 Westpac Banking Corp appeared in court amid accusations of 23 million breaches of anti-money laundering laws. 

The case was brought by the Australian Transaction Reports and Analysis Centre (AUSTRAC) on 20 November, who accused Westpac of mammoth breaches of anti-money laundering laws. It alleges that the bank ignored red flags and consistently enabled payments from convicted child sex offenders and high-risk countries over a period of many years. It is said that oversights within Westpac gave way to deep and systematic non-compliance. AUSTRAC is reported to be seeking A$21 million for every transaction that Westpac failed to adequately monitor or report. 

Since the scandal erupted, Westpac chief executive, Brian Hartzer, has stepped down from the firm. Moreover, it has offered to refund people who bought new shares in the weeks prior to the lawsuit unfolding. In an attempt to explain the move, a Westpac spokesperson said, “following discussions with ASIC, Westpac will provide a withdrawal option for (investors) who applied for shares under the Share Purchase Plan prior to the AUSTRAC announcement.” 

During the hearing, Chief Justice James Allsop suggested that any penalty Westpac might receive could be influenced by the role of its senior management in the money-laundering scandal. He commented that “the question of the relationship of executives, non-executive directors, senior management…might well be at the centre of the debate about relief.”

The Federal Court adjourned proceedings, with the next hearing scheduled for late-February.