Commonwealth Bank accused of breaching anti-money laundering and counter-terrorism financing laws

The logo of the Commonwealth Bank of Australia (CBA) is displayed outside a branch in Sydney, Australia on March 21, 2016.
The logo of the Commonwealth Bank of Australia (CBA) is displayed outside a branch in Sydney, Australia on March 21, 2016. PHOTO: REUTERS

SYDNEY (AFP) - Australia's biggest bank was taken to court on Thursday (Aug 3) by the country's financial intelligence agency, and accused of "serious and systemic non-compliance" of anti-money laundering and counter-terrorism financing laws.

Austrac said it was taking civil action against the Commonwealth Bank in the Federal Court for allegedly breaching the laws 53,700 times, particularly in relation to its cash deposit machines.

The financial giant could face a massive fine if found guilty.

Gambling giant Tabcorp in March was slapped with a A$45 million (S$48.5 million) penalty - the largest civil fine in Australian corporate history - by the Federal Court for 108 breaches of the same laws.

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"By failing to have sound anti-money laundering and counter-terrorism financing systems and controls in place, businesses are at risk of being misused for criminal purposes," austrac acting chief Peter Clark said in a statement.

"Austrac's goal is to have a financial sector that is vigilant and capable of responding, including through innovation, to threats of criminal exploitation."

The bank is accused of failing to deliver to Austrac on time 53,506 reports for cash transactions of A$10,000 or more at the machines between November 2012 and September 2015, with a total value of A$624.7 million.

The bank also failed to report suspicious transactions on time, or at all, that totalled A$77 million, and did not monitor customers or manage the risk even after becoming aware of suspected money laundering, the agency claimed.

The bank, Australia's biggest company by market capitalisation, said in a statement it had been in discussions with Austrac "for an extended period and has cooperated fully with their requests".

"On an annual basis, we report over four million transactions to Austrac in an effort to identify and combat any suspicious activity as quickly and efficiently as we can," it said, adding that "we have worked to continuously improve our compliance".

"We are reviewing the nature of the proceedings and will have more to say on the specific claims in due course." Commonwealth Bank shares slipped 0.37 per cent to A$83.92 in afternoon trade in Sydney.