National Australia Bank Faces Money Laundering Probe
- Share prices of the bank dipped after the news of the investigation went public.
National Australia Bank (NAB) is facing a probe by the Australian financial crimes agency for some serious and ongoing breaches of anti-money laundering and counter-terrorism laws, the lender revealed on Monday.
The Australian Transaction Reports and Analysis Centre, better known as AUSTRAC, moved against the bank as a part of its wider campaign against organized crime and said that there were ‘areas of serious concern’ in the part of the lender’s business that needed to be investigated.
Additionally, the agency elaborated that potential lapses were in ‘customer identification procedures’, ‘ongoing customer due diligence’, and ‘compliance with Part A of a joint AML/CTF program’.
The investigation has been handed over to the agency’s enforcement team. However, no decision has been made for further enforcement actions or civil penalties on the lender.
“AUSTRAC’s concerns emanate from historical and contemporary compliance assessments,” the agency wrote in a letter sent to the lender last week. “In particular, the seriousness of self-disclosed matters presented to AUSTRAC over a prolonged period combined with the accompanying closure rates is concerning.”
Lenders Must Comply
The Australian agency had been vigilant towards the local financial institutions. It slapped fines of AUD 2 billion (around $1.5 billion) on Commonwealth Bank and Westpac Banking Corp over the last few years for breaches in anti-Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laundered through financial institutions each year.This is not entirely surprising given the structure of the financial services industry and the nature of products and services offered by its participants.An ecosystem that involves the management, control, and processing of finances is inherently vulnerable to abuse by money launderers.Money Laundering ExplainedThe act of laundering is committed in circumstances in which an individual or entity is engaged in an arrangement that involves the proceeds of crime. These arrangements include a wide range of business relationships, i.e. banking, fiduciary and investment management.However, the degree of knowledge or suspicion will depend upon the specific offense but will usually be present where the person providing the arrangement, service or product knows, suspects or has reasonable grounds to suspect that the property involved in the arrangement represents the proceeds of crime. In some cases, the offence may also be committed where a person knows or suspects that the person with whom he or she is dealing is engaged in or has benefited from criminal conduct.One of the primary criticisms against cryptocurrencies has been their propensity for money laundering. Their anonymous nature and unregulated network structure make them ideally suited for money launders. Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laundered through financial institutions each year.This is not entirely surprising given the structure of the financial services industry and the nature of products and services offered by its participants.An ecosystem that involves the management, control, and processing of finances is inherently vulnerable to abuse by money launderers.Money Laundering ExplainedThe act of laundering is committed in circumstances in which an individual or entity is engaged in an arrangement that involves the proceeds of crime. These arrangements include a wide range of business relationships, i.e. banking, fiduciary and investment management.However, the degree of knowledge or suspicion will depend upon the specific offense but will usually be present where the person providing the arrangement, service or product knows, suspects or has reasonable grounds to suspect that the property involved in the arrangement represents the proceeds of crime. In some cases, the offence may also be committed where a person knows or suspects that the person with whom he or she is dealing is engaged in or has benefited from criminal conduct.One of the primary criticisms against cryptocurrencies has been their propensity for money laundering. Their anonymous nature and unregulated network structure make them ideally suited for money launders. Read this Term rules.
The impact of the latest investigation can be seen on the markets as the share prices of NAD, which is the country’s third-largest lender by market capitalization, fell by 3.16 percent on Monday’s trading hours.
“We are very aware that we need to further improve our performance in relation to these matters. We have been working to improve and clearly have more to do.”
Though the regulator is not considering financial penalties yet, the investigation can lead to higher compliance costs, according to JPMorgan analysts.
National Australia Bank (NAB) is facing a probe by the Australian financial crimes agency for some serious and ongoing breaches of anti-money laundering and counter-terrorism laws, the lender revealed on Monday.
The Australian Transaction Reports and Analysis Centre, better known as AUSTRAC, moved against the bank as a part of its wider campaign against organized crime and said that there were ‘areas of serious concern’ in the part of the lender’s business that needed to be investigated.
Additionally, the agency elaborated that potential lapses were in ‘customer identification procedures’, ‘ongoing customer due diligence’, and ‘compliance with Part A of a joint AML/CTF program’.
The investigation has been handed over to the agency’s enforcement team. However, no decision has been made for further enforcement actions or civil penalties on the lender.
“AUSTRAC’s concerns emanate from historical and contemporary compliance assessments,” the agency wrote in a letter sent to the lender last week. “In particular, the seriousness of self-disclosed matters presented to AUSTRAC over a prolonged period combined with the accompanying closure rates is concerning.”
Lenders Must Comply
The Australian agency had been vigilant towards the local financial institutions. It slapped fines of AUD 2 billion (around $1.5 billion) on Commonwealth Bank and Westpac Banking Corp over the last few years for breaches in anti-Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laundered through financial institutions each year.This is not entirely surprising given the structure of the financial services industry and the nature of products and services offered by its participants.An ecosystem that involves the management, control, and processing of finances is inherently vulnerable to abuse by money launderers.Money Laundering ExplainedThe act of laundering is committed in circumstances in which an individual or entity is engaged in an arrangement that involves the proceeds of crime. These arrangements include a wide range of business relationships, i.e. banking, fiduciary and investment management.However, the degree of knowledge or suspicion will depend upon the specific offense but will usually be present where the person providing the arrangement, service or product knows, suspects or has reasonable grounds to suspect that the property involved in the arrangement represents the proceeds of crime. In some cases, the offence may also be committed where a person knows or suspects that the person with whom he or she is dealing is engaged in or has benefited from criminal conduct.One of the primary criticisms against cryptocurrencies has been their propensity for money laundering. Their anonymous nature and unregulated network structure make them ideally suited for money launders. Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laundered through financial institutions each year.This is not entirely surprising given the structure of the financial services industry and the nature of products and services offered by its participants.An ecosystem that involves the management, control, and processing of finances is inherently vulnerable to abuse by money launderers.Money Laundering ExplainedThe act of laundering is committed in circumstances in which an individual or entity is engaged in an arrangement that involves the proceeds of crime. These arrangements include a wide range of business relationships, i.e. banking, fiduciary and investment management.However, the degree of knowledge or suspicion will depend upon the specific offense but will usually be present where the person providing the arrangement, service or product knows, suspects or has reasonable grounds to suspect that the property involved in the arrangement represents the proceeds of crime. In some cases, the offence may also be committed where a person knows or suspects that the person with whom he or she is dealing is engaged in or has benefited from criminal conduct.One of the primary criticisms against cryptocurrencies has been their propensity for money laundering. Their anonymous nature and unregulated network structure make them ideally suited for money launders. Read this Term rules.
The impact of the latest investigation can be seen on the markets as the share prices of NAD, which is the country’s third-largest lender by market capitalization, fell by 3.16 percent on Monday’s trading hours.
“We are very aware that we need to further improve our performance in relation to these matters. We have been working to improve and clearly have more to do.”
Though the regulator is not considering financial penalties yet, the investigation can lead to higher compliance costs, according to JPMorgan analysts.