Australia's largest bank to pay record penalty over money laundering
Staff Writer |
Commonwealth Bank of Australia (CBA) announced it has entered into an agreement with AUSTRAC, the Australian Government’s financial intelligence agency, to resolve the civil proceedings commenced by AUSTRAC in the Federal Court of Australia.
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The agreement follows Court-ordered mediation between CBA and AUSTRAC and remains subject to Court approval.
CBA will pay a civil penalty of $700 million together with AUSTRAC’s legal costs of $2.5 million.
CBA has admitted further contraventions of Australia’s Anti-Money Laundering and Counter-Terrorism (AML/CTF) Act, beyond those already admitted, including contraventions in risk procedures, reporting, monitoring and customer due-diligence.
AUSTRAC’s civil proceedings are otherwise dismissed.
CBA provided for an estimated penalty of $375 million in the half year ending 31 December 2017 at which time the bank noted the proceedings were complex and ongoing, and the ultimate penalty determined by the Court may be higher or lower than the amount provided for.
CBA will recognise a $700 million provision in its financial statements for the full year ending 30 June 2018 which will be announced on 8 August.
CBA chief executive Officer Matt Comyn said: “This agreement, while it still needs to be approved by the Federal Court, brings certainty to one of the most significant issues we have faced.
“While not deliberate, we fully appreciate the seriousness of the mistakes we made. Our agreement today is a clear acknowledgement of our failures and is an important step towards moving the bank forward. On behalf of Commonwealth Bank, I apologise to the community for letting them down.
“These changes are part of a large and concerted effort to become a better, stronger bank - one that earns the trust of our customers, staff, regulators and shareholders.
“Today is another very important step forward, and continuing to make the changes we need in an open, transparent and timely way is my absolute priority as CBA’s new chief executive.†■