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CBA denies the ‘majority’ of Amended Allegations

Tuesday 27 February 2018

Last week Friday, the Commonwealth Bank of Australia (CBA) denied the ‘majority’ of the 100 additional allegations made by the Australian Transaction Reports and Analysis Centre (AUSTRAC).
“In our defence of the class action matter, we categorically deny all allegations of liability,” CBA indicated in their statement.

The bank, which had recently set aside $375 million for penalties for alleged AML/CTF failures, said they denied 89 of the allegations and only partially admitted the remaining 11 allegations.

While the member of the big four agreed they were late in filing 53,506 Threshold Transaction Reports (TTRs), it maintained that this should be treated as a single course of conduct.

According to the CBA, it has complied with their continuous disclosure obligations ‘at all times’, and denied there was any price sensitive information.
“We agree that we did not adequately adhere to risk assessment requirements for Intelligent Deposit Machines (IDMs)—but do not accept that this amounted to 14 separate contraventions,” CBA indicated, in their statement.
Of the 230 alleged contraventions being brought by AUSTRAC for suspicious matter reporting (SMR), CBA only acknowledged that they made ‘errors’ in 98 of those instances. In addition, the bank denies 132 of those allegations.
“We admit to 56 (in whole or in part) but deny a further 53 allegations concerning ongoing customer due diligence Requirements,” CBA said.

Partner and regulator?
 Last year saw the launch of the Fintel Alliance, and a major push from regulators towards becoming both partner and regulator to the industries they regulate. This would mean a move away from the traditionally adversarial relationship to a more collaborative effort to help protect the Australian financial system from being used as a thoroughfare for dirty money and terrorist financing.
Yet the CBA statement hints at a possible breakdown in the historical relationship between the bank and the financial intelligence unit (FIU).
CBA said:
CBA has historically had a good relationship with AUSTRAC, with which it collaborates extensively including through the Fintel Alliance and the AUSTRAC private/public sector partnership. AUSTRAC has acknowledged CBA’s contribution in this field, including by inviting the executive in charge of CBA’s financial crime prevention team as the Australian financial services delegate to participate at the Joint Experts Meeting of the inter-governmental Financial Action Task Force in Moscow in April 2017.
The first indication the CBA had that the financial intelligence unit would bring action against them was when the proceedings were filed with the Federal Court on 3 August. 
“CBA takes its continuous disclosure obligations seriously and will continue to vigorously defend the claim,” CBA said.