4 June 2018

Australia’s Commonwealth Bank has agreed to pay a fine of $530 million for breeching anti-money laundering laws. This will be the largest civil penalty in Australian corporate history, if the courts approve the fine. The bank would also cover A$2.5m in legal fees accrued by investigators.

“The money laundered through the CBA accounts included the proceeds of drug and firearms importation and distribution syndicates – predominantly involving methamphetamine,” the court document said.

The error arose because the bank’s deposit machines could accept up to A$20,000 in cash at a time anonymously if the person depositing was not a Commonwealth customer. The system was not set to report such deposits exceeding the legal threshold of A$10,000.

The Bank said the breaches were due to a coding error, which meant the machines failed to automatically report the transactions. The authorities also said that the bank’s risk procedures and due diligence were not up to scratch. The scandal triggered an executive shake-up at the bank and CEO Ian Narev was ousted and was replaced by Matt Comyn.

The bank failed to report 53,000 such suspect transactions. In May, the bank also admitted to losing the bank records of almost 20 million people.