Australian bank Westpac agrees to £720m fine for money laundering

Australia’s second-largest bank has agreed to pay a 1.3 billion Australian dollar (£720 million) fine for breaches of anti-money laundering and counter-terrorism financing laws, the country’s biggest ever civil penalty, a financial crime regulator has said.

The regulator, Austrac, said it had agreed the penalty with Westpac after the bank admitted failing to report 19.5 million international money transfers between November 2013 and September 2018.

If the Federal Court rules the penalty is appropriate, it will become Australia’s biggest civil penalty.

It will eclipse a 700 million Australian dollar (£387 million) settlement paid by the Commonwealth Bank of Australia, the nation’s biggest bank, in 2018 for similar but less extensive reporting failures.

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Austrac chief executive Nicole Rose said the settlement sent a strong message to the industry that the regulator would take action to ensure Australia’s financial system remained strong so it could not be exploited by criminals.

“Our role is to harden the financial system against serious crime and terrorism financing and this penalty reflects the serious and systemic nature of Westpac’s non-compliance,” Ms Rose said.

Westpac chief executive Peter King, who was appointed in April after the allegations were made public, said the bank was committed to ensuring the mistakes were not repeated.

“I would like to apologise sincerely for the bank’s failings,” he said.

Attorney-general Christian Porter said the size of the proposed fine should serve as a wake-up call for the banking industry.