Commonwealth Bank of Australia has offered to pay a $700m (£400m; $530m) fine for breaking anti-money laundering and counter-terror financing laws, and if a court approves it, the penalty will be the largest civil one in Australian corporate history. The bank announced the offer on Monday, June 4, 2018.
The case centers on 53,000 suspect transactions the bank did not promptly report to authorities. Austrac, Australia’s financial intelligence agency, had accused the lender of “serious and systemic” breaches the year before. According to Austrac, the bank missed its deadlines for reporting transactions above the legal threshold of A$10,000.
Commonwealth Bank blamed a coding error, which meant its machines did not report the transactions automatically. In addition to the fine, the country’s largest lender will pay A$2.5m in legal fees run up by investigators.
Chief executive Matt Comyn said: “While not deliberate, we fully appreciate the seriousness of the mistakes we made.”
The two sides settled after court-ordered mediation. Both now go back to the Federal Court of Australia to ask for formal approval.
Austrac chief executive Nicole Rose said the agreement shows such breaches will not be tolerated. She said this kind of corporate behaviour “has real impacts on the everyday lives of Australians and puts the community at risk by increasing opportunities for terrorists to support attacks here and overseas, and enabling organised crime groups to peddle drugs to our families and friends.”
The bank is also under investigation over whether it properly told shareholders about all potential liabilities from the case. The settlement lands as Australia’s financial sector faces a national inquiry into misconduct. Prime Minister Malcolm Turnbull set up a royal commission in December after a series of scandals over the past decade.
