The Commonwealth Bank of Australia, one of the country’s biggest banks, has been accused of breaching anti-money laundering and counter terrorism finance laws by the Australian government.
The country’s financial intelligence agency, Austrac, has accused CommBank of “serious and systematic non-compliance” and of exposing Australia to “serious and ongoing financial crime.”
Timeline for Australia
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In one of the biggest cases of its kind, the agency has brought civil proceedings against the bank.
What has CommBank been accused of?
Austrac has been investigating CommBank’s use of intelligence deposit machines, which can facilitate anonymous cash deposits. The agency has said that these machines are being used by crime syndicates to shift offshore cash from drug deals.
Cash amounting to a limit of AUS$20,000 can be deposited at any one time and there are no limits to how many deposits can be made a day.
However, deposits over $10,000 must be reported to the Australian authorities, something Austrac is saying CommBank failed to do so.
As well, Austrac has alleged that the accounts were being used for something called “cuckoo smurfing”, a form of money laundering which involves transfers between countries without the need for money to actually cross international borders.
The figures at the centre of the case are staggering – here are some of the big ones to know
1. In the first six months after CommBank introduced the intelligent deposit machines in May 2012, deposits amounted to $89m.
2. Four years later, in the first six months to June 2016, this figure grew to $5.8bn.
3. CommBank has reportedly failed to report 53,506 cash transactions of $10,000 or more over a three-year period.
4. This amounts to a total value of $624.7m.
5. One crime syndicate is thought to have deposited $27.2m from drug sales in one account at CommBank – the majority of which was immediately transferred offshore.
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6. As well, the bank is also accused of failing to report suspicious matters on time or at all, on transactions totaling more than $77m.
7. However, CommBank says it has spent more than $230m on anti-laundering compliance and reporting processes and systems.
8. It says its reports over 4m transactions to Austrac annually to combat suspicious activity.
9. The maximum penalty for money laundering in Australia is $18m per breach.
What is CommBank’s response?
According to a statement by CommBank, the bank has been in discussions with Austrac for an “extended period and have cooperated fully with their requests.”
The bank said:
“Money laundering undermines the integrity of our financial system and impacts the Australian community’s safety and wellbeing. We will always work alongside law enforcement, intelligence agencies and government authorities to identify, disrupt and prevent this type of activity.
“We are reviewing the nature of the proceedings and will have more to say on the specific claims in due course.”