Our 'failures' hindered police enforcement of major crime, CBA boss admits

Written on the 20 November 2018

Our 'failures' hindered police enforcement of major crime, CBA boss admits

Police and law enforcement authorities were unable to disrupt money laundering by drug and firearm syndicates because of Commonwealth Bank's "failures", according to CBA CEO Matt Comyn.

At the banking royal commission on Tuesday, Comyn made the dramatic admission that the contraventions were extremely serious.

CBA paid a $700 million civil penalty, the largest in Australian corporate history, to settle the anti-money laundering and counter-terrorism financing case brought by AUSTRAC in June.

"Certainly our failures contributed to the inability to provide law enforcement with necessary intelligence that would have led to earlier prosecutions," Comyn says.

"And, of course, there could have been other matters as well because we didn't appropriately manage all of the risks associated with our (anti-money laundering) obligations."

Comyn agreed with senior counsel assisting the commission, Rowena Orr QC, that those failures would have hindered efforts to disrupt money laundering by drug syndicates, firearms importation syndicates and distribution syndicates.

Comyn says the bank had made substantial progress over the last 12 months in dealing with anti-money laundering and counter-terrorism financing (AML/CTF) but the bank's framework continues to be deficient in key areas.

"I'm very confident that we've substantially improved, and demonstrably, the control environment to protect the financial integrity and of course the Australian citizens," Comyn says.

"There is work to continue doing.

"I suspect there will never be a day while I'm in this role that I ever say that I'm fully satisfied with it, where we're dealing with all our AML/CTF risks because it will be one of those risks that continues to evolve."

AUSTRAC, which is the federal government's financial crime agency, found that CBA failed to notify it of more than 53,000 transactions at its network of so-called 'intelligent' automated cash deposit machines (IDMs), with a total transaction value of $624 million.

The scandal led to Ian Narev's departure as chief executive and he was replaced in April by Matt Comyn, who initially said the bank did not deliberately breach the law by failing to provide the regulator with timely notification of potentially suspicious transactions.

Rowena Orr said the IDMs pose a high international money laundering and terrorism financing risk because money can be deposited anonymously at any time at hundreds of locations and then be immediately available for transfer.

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