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CEO statement: CBA matter

As announced by the Minister for Home Affairs, I am pleased to confirm that AUSTRAC and CBA have reached an agreement, in which CBA has admitted to 53,750 breaches of the AML/CTF Act and has agreed to pay a financial penalty of $700 million dollars.

I want to stress this is not the end of the matter. This proposed outcome between AUSTRAC and CBA must still be agreed by the Federal Court. However, both AUSTRAC and CBA believe this outcome reflects the seriousness and magnitude of compliance failings by CBA.

If this agreement is accepted by the Federal Court of Australia, this will be the largest civil penalty ever ordered in Australia.

CBA has agreed that there were failures related to its Intelligent Deposit Machines, failures with management of risks around its IDMs and failures to provide timely threshold transaction reports and suspicious matter reports. CBA also admitted failures around appropriate monitoring of customers and accounts. 

CBA’s compliance failings translated into serious and organised criminals exploiting the financial sector to launder the illicit proceeds of their criminal activities, including proceeds from the sale of illicit drugs in the community.

This case shows the very real nature of how organised criminals can exploit the financial sector when reporting entities fail to adhere to their AML/CTF obligations.

Organised crime puts the financial sector and the community at risk of harm and undermines the trust Australians put in our financial institutions.

This is something that AUSTRAC cannot – and will not – tolerate. This was the impetus behind launching these proceedings.

It is the responsibility of financial institutions, their boards and senior management to ensure the organisation they oversee takes its AML/CTF obligations seriously, and that there is an organisational culture that supports this.

These legal obligations reflect a community expectation that the government and industry will work together to protect the community from criminal groups and individuals who might use our institutions to support their illegal enterprises and cause harm.

CBA has commenced a plan to rebuild its compliance program. AUSTRAC will work closely with CBA to oversee and support this work.

I hope CBA becomes an example of not just complying with its obligations, but will be at the forefront of future efforts to combat financial crime and terrorism financing.

Throughout these legal proceedings, CBA has remained committed to working together with AUSTRAC and our government and industry partners through the Fintel Alliance to disrupt crime and terrorism. I hope to see this commitment continue and increase.

I would like to thank our law enforcement partners, the Australian Federal Police, the New South Wales Police Force and Western Australia Police, all of who contributed extensively to AUSTRAC’s investigation.

I also want to express my gratitude to the Australian Government Solicitors and Counsel for their hard work, in particular Sonja Marsic and Simon White SC.

I also want to extend my sincere thanks to AUSTRAC Deputy CEO, Mr Peter Clark who took the decision to launch these proceedings.

Lastly, I want to thank all the staff of AUSTRAC for their dedication in achieving this successful outcome, and their tireless efforts to protect our community from those who seek to do us harm.

Thank you.

Nicole Rose PSM
AUSTRAC CEO

Last modified: 04/06/2018 15:09