11 Sep 2020
Westpac chief Peter King said the consequences of breaching anti-money laundering laws are so large that the bank can’t guarantee it will be able to continue to provide remittance services for workers in Australia looking to send money home to the Pacific.
Briefing the House of Representatives economics committee on Friday, Mr King also pushed back on a question from chairman Tim Wilson on whether Westpac would consider not selling its businesses in Fiji and Papua New Guinea to a Chinese bank.
This came after The Australian Financial Review this week reported concerns within the government that such a move could provide an opening for China to exert influence in the pacific region.
Mr King said Westpac, which offloaded most of its Pacific operations in 2015, has not “made any decisions on what we are going to do, therefore we haven’t considered options” on potential buyers of the Fiji and PNG operations, he said.
Among the major banks, Westpac is one of the biggest remitters of funds being earned in Australia back to the Pacific.
But heightened scrutiny by AUSTRAC on international money transfers – including a lawsuit relating to non-reporting of funds being sent by alleged paedophiles to Asia – meant it was cautious about providing remittance services and Mr King said genuine customers could be caught up in the cross-fire.
“If we can’t meet the requirements then we will have to stop providing products, that is the clear message: meet the law. The fines are too big if you can’t meet the law. We are looking at those processes internally and we will stop businesses if we can’t meet the law.”
Reserve Bank of New Zealand governor Adrian Orr expressed concern late last year that an unintended consequence of AUSTRAC’s action would be making it harder for legitimate funds to be sent into the Pacific. The challenge was that “a lot of people will not get access to the least-worst option,” he said.
Westpac is still facing a hefty penalty from AUSTRAC for its AML-CTF reporting breaches, which could be as much as $1.5 billion. It has made a provision of $900 million for the matter. Mr King said the bank’s preference was for a court-approved settlement.
By James Eyers and James Frost, The Australian Financial Review, 11 September 2020
Read more at The Australian Financial Review
RiskScreen: Eliminating Financial Crime with Smart Technology
Advance your CPD minutes for this content, by signing up and using the CPD WalletFREE CPD Wallet