The Federal Court of Australia has agreed on the deal struck between the Australian Transaction Reports and Analysis Centre (AUSTRAC) and Westpac, ordering the Australian bank to pay AU$1.3 billion (around $0.92 billion) for its breaches of the 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 and Counter-Terrorism Financing Act 2006 (AML/CTF Act).

The court order came only a month after the two agreed upon the hefty fine. The amount is the highest civil penalty paid by anyone in Australia.

“Financial institutions must ensure they have strong compliance systems, processes and resources in place to protect the Australian community and their businesses from criminals and criminal threats,” AUSTRAC CEO, Nicole Rose PSM said.

“To maintain public confidence in Australia's financial system and prevent future non-compliance, AUSTRAC will not hesitate to take action when these  Obligations  Obligations In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you or will owe you money that is considered an obligation. Different Types of ObligationsBonds, banknotes, and coins are examples of obligations because they assure users that they are accredited with the face value of that item. Obligations play a considerable role in personal finance and should be included in every budget. While every budget is different from one another, individuals can use the Financial Obligation Ratio (FOR) that is published quarterly by the Federal Reserve Board as a good reference point on how to best structure individual budgets. For those in the process of retirement planning, obligations should be scrutinized with a wide scope.These should include typical financial obligations such as mortgage payments and healthcare expenses that may incur. In trading, obligations are dealt in the form of put options and short selling or they may refer to the selling of shares on the next trading day after they were purchased in delivery. When obligations fail to be met and legal proceedings have begun, the severity of the punishment set forth is primarily determined by the terms of the contract although juror and judge intervention may lessen the obligations that must be met to fulfill the contract. In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you or will owe you money that is considered an obligation. Different Types of ObligationsBonds, banknotes, and coins are examples of obligations because they assure users that they are accredited with the face value of that item. Obligations play a considerable role in personal finance and should be included in every budget. While every budget is different from one another, individuals can use the Financial Obligation Ratio (FOR) that is published quarterly by the Federal Reserve Board as a good reference point on how to best structure individual budgets. For those in the process of retirement planning, obligations should be scrutinized with a wide scope.These should include typical financial obligations such as mortgage payments and healthcare expenses that may incur. In trading, obligations are dealt in the form of put options and short selling or they may refer to the selling of shares on the next trading day after they were purchased in delivery. When obligations fail to be met and legal proceedings have begun, the severity of the punishment set forth is primarily determined by the terms of the contract although juror and judge intervention may lessen the obligations that must be met to fulfill the contract. Read this Term are not met. This is aligned with AUSTRAC’s role and community expectations.”

Some Serious Compliance Lapses by the Bank

As Finance Magnates reported earlier, the bank admitted to contravening the AML/CTF Act on more than 23 million occasions, which ranged from failing to report international funds instructions, inadequate record-keeping and customer due diligence, and other breaches.

Additionally, it failed to carry out proper due diligence of the customers with suspicious transactions, which might have associated with child exploitation.

In its announcement, AUSTRAC highlighted that the astronomical amount shows the seriousness of the compliance failures on the part of the bank.

“AUSTRAC is committed to working collaboratively with Westpac and all regulated businesses to support them to understand and meet their obligations to protect Australia’s financial system from criminal threats,” Rose added.