AUSTRAC has accepted an enforceable undertaking from National Australia Bank (NAB) to uplift its compliance with Australia's anti-money laundering and counter-terrorism financing (AML/CTF) laws.
The action follows an AUSTRAC enforcement investigation which identified concerns about NAB's AML/CTF program, systems and controls.
AUSTRAC identified non-compliance in targeted compliance assessments, as well as through self-disclosures from NAB. AUSTRAC notified NAB of the formal enforcement investigation into five NAB reporting entities in June 2021, following ongoing regulatory engagement. The entities are National Australia Bank Limited, JBWere Limited, Wealthhub Securities Limited, Medfin Australia Pty Ltd, and AFSH Nominees Pty Ltd.
NAB has undertaken to implement a comprehensive remedial action plan, which will see improvements to its systems, controls and record-keeping, including:
- the NAB designated business group AML/CTF Program
- applicable customer identification procedures
- customer risk assessment and enhanced customer due diligence
- transaction monitoring
- governance and assurance.
AUSTRAC will monitor NAB's progress to ensure that actions are taken within the timeframes, and maintain regular, ongoing discussions with NAB. An independent auditor will report to AUSTRAC annually on progress, with the final report to be provided to AUSTRAC by March 2025.
AUSTRAC formed the view at the start of the investigation that a civil penalty proceeding was not appropriate at that time. AUSTRAC has not identified any information during the investigation to change that view.
AUSTRAC Chief Executive Officer, Nicole Rose, said that the enforceable undertaking aims to ensure that NAB continues with its remediation programs to uplift its compliance and combat the risks of serious and organised crime.
"National Australia Bank has demonstrated a commitment to uplifting its AML/CTF controls, and has undertaken significant work identifying and implementing improvements to its programs.
"NAB has worked collaboratively with AUSTRAC throughout the investigation, and this enforceable undertaking will help to ensure NAB meets its compliance and reporting obligations," Ms Rose said.
AUSTRAC regulates and collaborates with the financial services sector to build resilience, improve risk management and ensure they have appropriate systems in place and to help them identify, track and disrupt criminal exploitation of the financial sector.
"All AUSTRAC regulated businesses have a responsibility to have measures in place to protect the community from serious and organised crime. When these obligations are not met, AUSTRAC will not hesitate to draw on our range of regulatory tools and enforcement powers to maintain public confidence in Australia's financial system," Ms Rose said.
In 2021, AUSTRAC released the Major banks in Australia risk assessment which found the overall money laundering and terrorism financing risk for the industry is 'high'. The report provides information and guidance to support major banks to assess their level of risk, strengthen their controls and report suspicious activity to AUSTRAC.
The enforceable undertaking and accompanying remedial action plan is available on the AUSTRAC website.
AUSTRAC's regulatory approach
AUSTRAC uses a range of regulatory tools and powers to ensure compliance. Interactions are tailored based on the level of risk posed by the entities we regulate and their circumstances, and range from education and collaboration, through to regulatory interventions and enforcement.
AUSTRAC enforcement powers include:
- issuing infringement notices
- issuing remedial directions, which require a reporting entity to take specified action to ensure compliance
- accepting enforceable undertakings detailing the specific actions a reporting entity will commence or cease in order to comply with the AML/CTF Act
- seeking injunctions and/or civil penalty orders in the Federal Court.
AUSTRAC does not provide public commentary on individual reporting entities' compliance.
Details of the consequences of not complying are available on the AUSTRAC website.
About AUSTRAC
AUSTRAC (the Australian Transaction Reports and Analysis Centre) is the Australian Government agency responsible for detecting, deterring and disrupting criminal abuse of the financial system to protect the community from serious and organised crime.
Through strong regulation, and enhanced intelligence capabilities, AUSTRAC collects and analyses financial reports and information to generate financial intelligence.
