19 Jun 2020
Financial crimes watchdog AUSTRAC has two months to add any new allegations to its blockbuster case against Westpac, as it investigates suspicious transactions from 272 customers who may have been involved in paedophilia.
Federal Court Justice Jonathan Beach ordered the deadline on Wednesday ahead of a potential trial early next year, saying there was a need to draw a line under the claims against the bank so the legal matters could be resolved.
Westpac was last year thrown into turmoil when AUSTRAC accused the bank of more than 23 million breaches of anti-money laundering and counter-terrorism financing (AML/CTF) laws, including failing to properly vet thousands of suspicious payments potentially involving child exploitation.
As AUSTRAC considers expanding its case against the bank, Justice Beach said he agreed with Westpac’s barrister that it was time to finalise aspects of the case against the bank, so that the parties could move to a short trial and a discussion of penalties.
“We do need to guillotine it at some stage,” Justice Beach said, adding that the boundaries of the case needed to be set.
AUSTRAC’s bombshell claim last year threw Westpac into crisis, sparking an executive shake-up and prompting the bank to this year set aside $900 million to cover the record-breaking fine it is likely to face. It has admitted to the vast majority of AUSTRAC’s allegations, including failing to properly vet 12 customers who made transactions fitting the pattern of payments for child exploitation.
However, the two sides have not agreed on a penalty, they disagree on whether Westpac had a compliant AML/CTF program, and last week it emerged AUSTRAC could amend its statement of claim after the bank reported 272 additional customers who made suspicious payments.
AUSTRAC’s barrister, Wendy Harris QC, told the online court hearing the latest reports from Westpac had similarities to the allegations regarding the 12 customers where Westpac had admitted inadequate vetting. “There is a real prospect that the AUSTRAC CEO will complete an investigation and say we need to bring forward some additional allegations,” Ms Harris said.
Westpac’s barrister, John Sheahan, QC said AUSTRAC’s latest claims would require the bank to handover tens of thousands of documents, adding that some of the customers were in a “quite different category” to the 12 people included in the initial case.
“This has to come to an end at some point,” Mr Sheahan said. “We understand the regulator continues to regulate, but there has to come a point where new issues stop being loaded into this existing proceeding.”
Justice Beach ordered AUSTRAC to propose any amendments to its statement of claim to Westpac by mid-August and file an amended statement of claim with the Court by early September. Both parties were working towards a trial in early 2021 on any outstanding points of disagreement, he said.
By Clancy Yeates, The Sydney Morning Herald, 17 June 2020
Read more at The Sydney Morning Herald
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