CBA hits back on AUSTRAC allegations
Commonwealth Bank has rejected fresh allegations over breaches of money laundering and anti-terrorism funding laws.
Financial intelligence agency AUSTRAC last year made a string of allegations against the bank, including that it processed transactions involving a known terrorist.
AUSTRAC slammed CBA with accusations that its so-called intelligent deposit machines (IDMs) were used regularly by “drug mules” and criminal gangs.
The CBA lodged a response in the Federal Court to the most recent batch of allegations late last week.
“In our amended defence in the AUSTRAC matter, we deny the majority of the 100 additional allegations,” CBA said in a statement issued to the ASX.
The bank denies all but 11 of the additional 100 claims made by AUSTRAC.
The CBA accepted fewer than 100 of the 230 “suspicious matter reporting” (SMR) allegations made by AUSTRAC.
One of the fresh SMR allegations related to attempts by a customer to transfer money to his brother in Lebanon who been convicted on terrorism charges.
AUSTRAC alleged that the CBA knew of the potential breach on June 26 last year, but did not put a stop on the account concerned until well into August.
AUSTRAC also alleged the CBA acted too slowly on a money laundering operation through ATMs and IDMs by a crime gang in NSW.
“The money mules made structured cash deposits into the CommBank accounts identified … to launder the funds of the drug and firearms syndicate,” AUSTRAC alleged in its December court filing.
The bank said it takes its anti-money laundering and counter-terrorism financing (AML/CTF) obligations seriously.
“During the period covered by AUSTRAC's claim and to the end of 2017, we submitted more than 19 million reports to AUSTRAC, including over 4 million last year alone,” the bank said.
“During the same period we submitted more than 40,000 suspicious matter reports.
“We also fulfilled more than 20,000 requests for assistance from law enforcement agencies last year.”
The bank spent over $400 million on financial compliance systems to counter financial crime over the past eight years, it said, and had hundreds of personnel dedicated to detecting and disrupting financial crime.
The bank also repeated its argument that an additional 53,500 late threshold transaction reports should be treated as one contravention by the Federal Court.
It conceded that it did not adequately adhere to risk assessment requirements for intelligent deposit machines (IDMs), but does not agree with AUSTRAC's statement that it amounted to 14 separate contraventions.
Experts say the disagreement raises the possibility of the action now going to trial.
The bank has already moved to free up $375 million for an expected penalty to alleged contraventions of the AML/CTF laws.
Additionally, the bank has rejected all the allegations made in an investor class action launched by legal firm Maurice Blackburn.
“In our defence of the class action matter, we categorically deny all allegations of liability,” the bank said.
“We consider that we have complied with our continuous disclosure obligations at all times.
“There was no price sensitive information about the matters raised in the AUSTRAC proceeding that required disclosure.”