Ahead of its March half year results release later this week, National Australia Bank said on Monday that it had entered into an Enforceable Undertaking (EU) with the financial intelligence agency AUSTRAC after an investigation confirmed flaws in the bank’s compliance with money laundering laws.
The undertaking will hold NAB to improving systems, controls and record-keeping across its anti-money laundering program, including customer identification, customer risk assessment and due diligence, transaction monitoring and governance.
NAB said in Monday’s statement that it will be assessing the likely costs of delivering the requirements of the EU and will provide an update when the interim results are released on Thursday, May 5.
Unlike similar actions against the Commonwealth and Westpac, there’s no fine or financial penalty imposed by AUSTRAC (The Australian Transaction Reports and Analysis Centre) on NAB.
The agency started launched a formal investigation into NAB in June last year, where it determined financial penalties were not being considered and on Monday, the regulator confirmed this position had not changed.
AUSTRAC though will monitor NAB’s progress to ensure actions are taken within the required timeframe and maintain ongoing discussions between the regulator and bank.
An independent auditor will report to AUSTRAC annually NAB’s progress in improving its performance in this area.
A final report will be provided by March 2025 to the agency by NAB.
AUSTRAC chief executive Nicole Rose said the undertaking aims to ensure NAB complies with laws and combats the risk of serious and organised crime.
“National Australia Bank has demonstrated a commitment to uplifting its [anti-money laundering, counter-terrorism financing] controls, and has undertaken significant work identifying and implementing improvements to its programs,” Rose said in a statement on Monday.
“NAB has worked collaboratively with AUSTRAC throughout the investigation, and this enforceable undertaking will help to ensure NAB meets its compliance and reporting obligations.”
NAB CEO Ross McEwan said in a separate statement: “We take our AML/CTF obligations very seriously. We acknowledge the concerns that led to AUSTRAC’s investigation. We will continue to work closely with AUSTRAC as we deliver the agreed further actions.
“We recognise it has taken us longer to fix the concerns raised than it should have. We welcome AUSTRAC’s acknowledgement that NAB has undertaken significant work to date – and we accept that there is more to do.
