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CBA Files Money-Laundering Defence

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The Commonwealth Bank has admitted to a number of the breaches of anti-money laundering and counter-terrorism financing laws, but also says it will be contesting other charges filed by Austrac, the Federal financial intelligence agency.

The bank Wednesday evening filed its response to the civil proceedings launched by Austrac in the Federal Court, earlier this Year.

The CBA’s defence includes an admission that it was late in filing more than 53,500 reports of transactions of $10,000 or more through its deposit-taking ATMs between 2012 and 2015.

CBA said those reports were late due to one systems-related error, and will argue those contraventions should be treated as one course of conduct - it has argued previously that line previously.

In its defence CBA said it "admits that it failed to comply with its Joint Program and contravened s 82(1) of the Act in two respects. First, by failing to conduct an assessment of the inherent ML/TF risk in respect of IOMs prior to July 2015, and secondly by failing to introduce daily limits on cash deposits through IDMs to CBA branded cards connected with a personal account by January 2016.”

"CBA also admits that at various times between about 20October2012 and 12 October 2015, due to an error in the process of merging data from two systems, its account level automated transaction monitoring did not operate as intended in respect of 778,370 accounts. CBA admits that this deficiency in its a.utomated transaction monitoring over that period constituted a contravention of s 82(1) of the Act.

The bank also admits it failed to meet risk assessment requirements for its deposit-taking ATMs, which were rolled out from 2012, including that it should have introduced daily limits on cash deposits by early 2016. Daily limits were finally introduced in November of this year.

The CBS said in its statement that it won’t fight Austrac on 91 allegations that it failed to detect suspicious deposits made through its ATMs and it will also admit to 52 claims that it did not properly monitor customers.

But the bank warned that it will challenge more than 100 other allegations brought by Austrac.

Austrac has claimed that drug gangs laundered millions of dollars through CBA’s intelligent deposit machines, which were capable of accepting up to $20,000 in a single deposit.

And the CBA also revealed last night that Austrac would be claiming more breaches of the law by filing an amended statement of claim against the bank.

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

"Any penalty imposed by the Court as a result of the mistakes we have made will be determined in accordance with established penalty principles. For example, the Court may consider whether any contraventions arise out of the same course of conduct and will assess the appropriate penalty for that conduct accordingly, as it recently did in the Tabcorp decision,” The CBA said in last night’s statement.

“CBA’s submissions at trial will also highlight steps that we have taken since 2015 as part of our Program of Action to strengthen and improve our financial crimes compliance.” it added.

View More Articles By Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.



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