Commonwealth Bank is in major damage control after being accused of more than 53,000 breaches of laws put in place to combat money laundering and the financing of terrorism.
The federal government’s financial intelligence unit AUSTRAC (Australian Transaction Reports and Analysis Centre) on Thursday launched civil penalty proceedings in the Federal Court, accusing CBA of systemic failure to comply with anti-money laundering and counter-terrorism financing laws.
Why is this such a big deal?
It is understood CBA faces a maximum penalty of $18 million for each of the 53,700 contraventions, if found guilty.
As Andrew Robertson noted via ABC News, that’s “a trillion dollars, a thousand billion. About seven times Commonwealth Bank’s market value.”
“If it comes to that,” he wrote, “it simply won’t be able to pay.”
What are AUSTRAC’s allegations against CBA?
The accusations follow an AUSTRAC investigation into the bank’s use of intelligent deposit machines – ATMs that accept up to $20,000 per cash transaction.
AUSTRAC claims CBA failed to assess the money laundering and terrorism financing risk of intelligent deposit machines before they were rolled out in 2012, and only took its first steps to assess the risks in mid-2015.
The bank also allegedly failed to provide on time reports of more than 53,500 transactions through IDMs of $10,000 or more, totalling $625 million.
AUSTRAC has also accused CBA of failing to report suspicious matters involving $77 million worth of transactions, either on time or at all.
"Even after CBA became aware of suspected money laundering or structuring on CBA accounts, it did not monitor its customers to mitigate and manage money laundering/terrorism financing risk," AUSTRAC said in a statement.