Westpac Issues Update on Threshold Transaction Reporting Issues

Source: Regulation Asia Editors, Regulation Asia 2020-07-29

Westpac says it failed to report about 175,000 transactions to AUSTRAC as required, and may have filed 365,000 TTRs incorrectly.

Westpac has issued an update on reporting issues uncovered in its internal investigations, which were disclosed in the bank’s interim financial results in May.

In the interim results, Westpac indicated that it had identified deficiencies in certain systems and controls relevant to its obligation to file TTRs (threshold transaction reports) with AUSTRAC for cash transactions over AUD 10,000. At the time, the bank estimated the deficiencies resulted in incomplete or inaccurate TTRs being filed, and failures to report an estimated 60,000 to 90,000 TTRs.

Following further investigations and in response to a notice from AUSTRAC, Westpac has provided AUSTRAC with updated information relating to these TTR issues, which are now said to include about 175,000 transactions that were not reported to AUSTRAC and 365,000 TTRs that may have been reported incorrectly.

“A significant proportion of the potential reporting issues relate to a range of complex scenarios where the legislation requires Westpac to exercise judgement on how multiple transactions may be aggregated and whether a threshold transaction has actually occurred,” Westpac said, adding that not all of the reporting failures may constitute breaches of AML/CTF laws.

“Westpac continues to engage with AUSTRAC in relation to these TTR issues, and notes that the numbers above may change.”

AUSTRAC’s original statement of claim against Westpac in November alleged over 23 million contraventions of the AML/CTF Act, including late reporting of 17,870 TTRs and issues with incomplete or inaccurate information in some TTRs filed.

The regulator has been considering amending its statement of claim to include allegations arising from its investigations into the TTR issues uncovered in Westpac’s internal probe. In June, the Federal Court gave AUSTRAC until 14 August to file an amended statement of claim.

The next case management meeting scheduled for 18 September.

Westpac has already admitted to a bulk of the alleged breaches in the original claim, set aside AUD 900 million for an expected fine from AUSTRAC, and begun implementing a remediation and response plan to address its AML/CTF problems.

It has also recently unveiled a group-wide plan to strengthen its management of non-financial risk, simplify its business operations, and drive clearer accountability and decision making.

Westpac

TTR

AUSTRAC

Westpac Issues Update on Threshold Transaction Reporting Issues

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