The Commonwealth Bank failed to monitor billions of dollars of transactions in its offshore businesses in the US, Asia and Europe, according to a confidential internal report.
Sky News Business, which obtained the document, says the review showed “non-existent or minimal transaction” monitoring for almost two thirds of the bank’s Institutional Banking and Markets division.
The Commonwealth Bank of Australia is in the Federal Court, accused of breaching the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act over combined cash deposits of $624.7 million.
The civil proceedings follow an investigation by Australia’s financial intelligence and regulatory agency, AUSTRAC, into the use of intelligent deposit machines which, it is claimed, became the outlet of choice for criminal syndicates to shift offshore cash from drug deals.
Corporate regulator ASIC (Australian Securities and Investments Commission) has has also confirmed it is investigating the bank over its conduct in the money laundering scandal.
And the banking regulator, APRA (Australian Prudential Regulation Authority) is investigating governance, culture and accountability at Australia’s biggest company.
According to a report in The Australian newspaper, the internal CBA report found that five of the bank’s businesses had no transaction monitoring in Australia, New York, Singapore, Hong Kong and London.
The newspaper said: “The report was presented by Philippa Watson, the CBA’s executive general manager in charge of security and advisory, Matt Keaney, the general manager of financial crime services, and Matt Kind, group manager of security.”
On the latest report, in a statement today the Commonwealth says the review was a working document of the Institutional Banking and Markets division, proposing technology enhancements, including the automation of tasks done manually.
More than $230 million has been spent so far to strengthen policies and processes related to financial crimes compliance.
“The program (Program of Action) includes investment in systems to enhance transaction monitoring currently performed in Australia and offshore jurisdictions,” the bank said.
“The Commonwealth Bank maintains proactive relationships with all relevant global regulators on these and other matters.”
A committee of the board of directors was set up earlier this month to oversee the bank’s response to AUSTRAC’s statement of claim. The committee members: Mary Padbury, bank chair Catherine Livingstone, Brian Long and Shirish Apte.