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- Westpac (WBC) appeared in court on Monday for the first hearing of November’s AUSTRAC allegations
- The bank has been accused of 23 million anti-money laundering and counter-terrorism financing law breaches
- Westpac said it is crafting a Statement of Agreed Facts with AUSTRAC
- This means it will admit to several of the legal issues
- As such, the case has been adjourned until February or March next year
- Westpac is down 0.41 per cent in early afternoon trade, selling shares for $24.25 each
Westpac (WBC) appeared in court on Monday for the first hearing of its hefty anti-money launder and counter-terrorism finances allegations.
The nation’s oldest bank came under fire from AUSTRAC in November for an alleged 23 million breaches of the laws. After yesterday’s court session, it seems the banking giant is ready to bite the bullet and face the brunt of its penalties head-on.
The bank said in an announcement to the ASX last night it is busy forming a Statement of Agreed Facts with AUSTRAC.
Essentially, this will be a list of issues Westpac will not dispute — meaning there is no presumption of innocence and no evidence needed to be brought against the bank before it can be judged for the misconduct.
The issues up for discussion include Westpac’s lack of oversight in overseas transactions, with the most serious cases relating to the bank’s failure to properly vet payments to the Philippines linked to child pornography and abuse.
While the bank is likely to put up a fight regarding some of the claims — such as whether upper or middle management should cop the majority of the blame for the child exploitation charges — Westpac said it is determined to resolve the issues with AUSTRAC.
In light of crafting the Statement of Agreed Facts, the court has adjourned the case until a February or March hearing in 2020. In fact, according to a report by The Australian, AUSTRAC’s barrister said there is a “good chance” any issues unresolved in the Statement will be agreed by February.
Of course, this means much of the case will be settled outside of the public eye.
Nevertheless, the agreement will pave the way for what is likely to be a heavy penalty for Westpac.
Given the maximum penalty for each breach is worth between $17 million and $21 million, the sheer volume of breaches by the big bank means the maximum penalty is a potential $483 trillion.
However, the real figure is likely to be much lower and sit around the billion-dollar mark; a significant downgrade from the maximum, but still the largest penalty ever issued in Australian corporate history.
In the interim, Westpac said it has already made several changes to its transaction monitoring and will keep reviewing its processes.
“Westpac is implementing its Response Plan and is determined to lift its standards and ensure its anti-money laundering and other financial crime processes meet its obligations,” today’s announcement read.
Still, the bank remains in hot water with looming legal action from the Australian Securities and Investment Commission (ASIC) and the Australian Prudential Regulation Authority (APRA), as well as a series of class actions.
Westpac is down 0.41 per cent in early afternoon trade, selling shares for $24.25 each.
