National Australia Bank Facing Money Laundering Probe

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National Australia Bank (NAB) said Monday (June 7) it is under investigation for breaches of the country’s money laundering and counter-terrorism laws.

According to a Reuters report, the announcement triggered concerns about fines and higher compliance costs and caused shares in the bank to fall 2.6 percent.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) said the problems at NAB stemmed from “potential serious and ongoing non-compliance” with customer identification procedures, customer due diligence and other compliance rules.

“AUSTRAC’s concerns emanate from historical and contemporary compliance assessments,” the agency said in a letter to NAB 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.”

AUSTRAC said the investigation will be turned over to its enforcement team, but added that it hasn’t decided whether to take enforcement action and is not considering civil penalties. This is the result of the work NAB has done so far, although AUSTRAC said its view could change.

“NAB has an important role in monitoring and reporting suspicious activity and keeping Australia’s financial system, our bank and our customers safe,” the bank’s CEO Ross McEwan said in a statement. “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.”

In the past three years, AUSTRAC has issued $1.5 billion in penalties to two other major Australian lenders — Commonwealth Bank and Westpac Banking Corp. — for violating anti-money laundering rules, U.S. News said.

When the COVID-19 pandemic erupted last year, regulators began warning financial institutions of a rising threat of money laundering.

Some of those threats involved launderers using stimulus payments and relief funds to hide illegal earnings, while others targeted the increased use of unregulated FinTech apps to move money without the government’s knowledge, as previously reported.




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