Australian Military Bank hit with a direct order
04 May 2021

The financial intelligence regulator issued Australian Military Bank with an enforcement action designed to ensure the bank is compliant with anti-money laundering laws and stop it from being compromised by criminals.

AUSTRAC issued the small Australian bank with 56,000 customers including veterans, serving defence force personnel and their families with a remedial direction on Monday. Remedial directions are one of four enforcement actions available to AUSTRAC and it is the first action of its kind issued since 2015.

Under the remedial direction, Australian Military Bank (AMB) must appoint independent auditors to ensure the regulator’s concerns are addressed and its systems and controls are up to scratch. Australian Military Bank is not subject to any financial penalty.

AUSTRAC wants the bank to revisit its AML-CTF program and deficiencies within its know-your-customer regime and transaction reporting. It also wants AMB to conduct a review of staff training and its handling of “politically exposed persons”.

AUSTRAC CEO Nicole Rose said it was important that AMB addressed the risk that criminals pose to the business and AUSTRAC would move quickly to penalise reporting entities that did not comply with their obligations.

“The Australian Military Bank has demonstrated a commitment to uplifting its AML/CTF controls. It is encouraging that AMB has already started implementing a remediation action plan and this remedial direction will help to ensure AMB meets its compliance and reporting obligations,” Ms Rose said.

“Where these obligations are not met, AUSTRAC will not hesitate to draw on our range of regulatory tools and enforcement powers to maintain public confidence in Australia’s financial system and prevent non-compliance.”

Within the next ten weeks AMB must appoint an auditor and complete a money laundering assessment. It must design, document and implement systems and controls to meet know your customer, transaction monitoring and enhanced customer due diligence requirements.

AMB must review its awareness training with a focus on “beneficial owners and politically exposed persons” and review its obligations relating to the reporting of suspicious matter transactions, threshold transactions and international funds transfer instructions.

By James Frost, The Australian Financial Review, 4 May 2021

Read more at The Australian Financial Review

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