CBA admits some failings in money laundering case

Bank files defence in Federal Court case

The Commonwealth Bank of Australia has admitted to some failures of its anti-money laundering measures but will challenge a number of claims in court proceedings brought against it by AUSTRAC.

AUSTRAC earlier this year launched civil proceedings against the bank over what it has described as “serious and systemic non-compliance” with Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

CBA yesterday filed its defence, which includes an admission that it was late in filing more than 53,000 threshold transaction reports (TTRs) with AUSTRAC.

The delayed TTRs relate to the Intelligent Deposit Machines (IDMs) rolled out by the bank in May 2012. The IDMs allow cash to be deposited: Up to 200 notes can be deposited at a time, and unlimited deposits per day are permitted.

“CBA’s automated process identified cash deposits by searching for certain transaction codes and then reported cash transactions of $10,000 or more,” states the concise statement in response CBA has lodged with the Federal Court.

“In November 2012, in order to correct an error message that was appearing on customer statements, a new transaction code was applied in respect of some cash deposits through IDMs. However, the automated TTR reporting process was not updated to search for that new transaction code.”

The problem wasn’t fixed until September 2015.

CBA acknowledged that the failure to generate and lodge 53,506 TTRs represented a contravention of anti-money laundering legislation.

However, the bank said it would defend some of the claims made by AUSTRAC in relation to suspicious matter reports and CBA’s ongoing customer due diligence program.

“We continue to fully cooperate with AUSTRAC in relation to our obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act) and respect its role as a regulator,” the bank said in a statement.

“The nature of the regime involves continuous liaison and collaboration with the regulator as risks are identified. As such we are in an ongoing process of sharing information with the regulator.”

The bank had until 15 December to file its defence in the case, which will be heard in 2018.

AUSTRAC today said it had filed an amended statement of claim after identifying an additional 100 breaches by CBA.

“These allegations are very serious and reflect systemic non-compliance over approximately six years,” AUSTRAC CEO Nicole Rose said in a statement.

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