Commonwealth Bank of Australia (CBA) has agreed to pay a fine of A$700m ($533.9m) to resolve allegations of violating anti-money laundering (AML) and counter-terrorism financing (CTF) rules.

As part of the settlement, CBA will also pay AUSTRAC’s legal costs of A$2.5m. The settlement is subject to court approval.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

The charges were brought by the Australian Transaction Reports and Analysis Centre (AUSTRAC) in August last year. The financial intelligence agency accused the bank of flouting Anti-Money Laundering and Counter-Terrorism Financing Act over 53,700 times, mainly associated with intelligent deposit machines (IDMs) and filed a civil suit against the bank.

The regulator also charged the bank of failing to make an anti-money-laundering risk assessment before launching the ATMs in 2012.

Soon after the allegations, CBA CEO Ian Narev announced plans to step down from his role, while the Australian Prudential Regulation Authority (APRA) launched an inquiry into CBA’s governance.

AUSTRAC CEO Nicole Rose said: “We know that businesses are the first line of defence in protecting the community and our financial system from criminal abuse, and it is critical for AML/CTF compliance and risk management to be embedded in business strategy and practices. I hope this result alerts the financial sector to the consequences of poor compliance, and reinforces that businesses need to take their obligations seriously.”

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

CBA admitted to breaching the AML/CTF Act on 53,750 occasions. The bank said that it failed to properly assess money laundering and terrorism financing risks of its IDMs before October 2017 and also admitted to the late filing of 53,506 transactions reports for transactions of $10,000 or more through its IDMs from November 2012 to September 2015.

It said that it failed to monitor transactions on 778,370 accounts for three years and also failed to report suspicious matters on time or at all for transactions in the tens of millions of dollars.

CBA CEO Matt Comyn said: “While not deliberate, we fully appreciate the seriousness of the mistakes we made. Our agreement today is a clear acknowledgement of our failures and is an important step towards moving the bank forward. On behalf of Commonwealth Bank, I apologise to the community for letting them down.

“Banks have a critical role to play in combating financial crime and protecting the integrity of the financial system. In reaching this position, we have also agreed with AUSTRAC that we will work closely together based on an open and constructive approach.”