Austrac stands ground in CBA case

Financial intelligence agency Austrac is sticking with legal arguments that are part of its case that Commonwealth Bank repeatedly breached anti-money laundering laws, despite the bank’s rebuttals.

Austrac late last week filed its response to CBA’s amended defence, the latest development in the agency’s high-profile claim that CBA failed to properly monitor and report suspicious cash transactions through its ATM network.

Austrac launched its initial explosive case against the bank in August before adding 100 further alleged breaches in December, including one case involving suspicious transactions by a convicted terrorist.

In February, CBA denied 89 of these extra claims. It also argued that there were fewer contraventions of the anti-money laundering laws than had been alleged by Austrac.

Many of the technical legal points being debated relate to CBA’s alleged failure to provide Austrac with “suspicious matter reports” (SMRs), and whether the bank properly conducted due diligence on customers.

Austrac’s latest filing reiterates its previous position, by arguing that various failures by CBA to provide all the relevant information in SMRs were indeed contraventions of the law.

Austrac also pointed to five bank accounts opened by CBA between 2009 and 2014, which Austrac alleged were “specifically generated for the purpose of laundering money”. Austrac maintained that CBA contravened the law in these cases because CBA held suspicions the accounts were being used to launder money, but failed to tell Austrac about this suspicion.

The latest development in the Austrac saga comes as CBA appears to be edging towards a settlement, after it last month said it would enter into mediation talks with Austrac, in response to orders from the Federal Court.

The talks, which could pave the way for a settlement, are to occur before May 25, and will run alongside the court process.

The bank set aside $375 million in its latest financial results to cover fines it may face from the scandal, though some analysts have predicted CBA may end up being slapped with a higher penalty than this.

The Canberra Times | April 9, 2018
http://www.canberratimes.com.au/business/banking-and-finance/austrac-stands-ground-in-cba-case-20180409-p4z8l3.html