By PAUL O’DONOGHUE, Senior Correspondent
NEW Zealand’s ASB Bank, a subsidiary of Australia’s Commonwealth Bank, faces a $6.7 million ($3.9 million) fine over multiple ‘serious’ AML breaches.
The Reserve Bank of New Zealand, the country’s central bank, has filed civi High Court proceedings against ASB. The failures date back to 2019.
The Australian-owned lender has admitted liability for seven breaches of the AML Act. The bank and the regulator have jointly recommended a NZ$6.73 million penalty. The High Court will decide the final amount.
The AML issues included failures to conduct adequate customer due diligence and delays in reporting suspicious activity. The bank also failed to maintain an effective compliance programme.
Angus McGregor, acting Assistant Governor of Financial Stabilit at the Reserve Bank, said the action should act as a warning to the wider sector.
“The AML/CFT Act has been in place for well over a decade now. The Reserve Bank expects banks to have the systems and resources in place to be fully compliant with these requirements,” McGregor said.
“Banks who do not comply increase risk for New Zealanders and our financial system,” McGregor said.
ASB Bank AML issues
ASB chief executive Vittoria Shortt apologized for the failures.
“Our transaction monitoring and customer due diligence systems and processes had shortcomings, and we did not act fast enough to resolve these. We didn’t get this right and I apologise for that,” she said in a statement.
She said ASB cleared all backlogs of transaction monitoring alerts by February 2024. The bank has since expanded teams and invested in technology. These steps aim to strengthen its AML/CFT capability.
The Reserve Bank added: “It is not alleged that ASB was involved in money laundering or the financing of terrorism.
“As this matter is now before the High Court, the Reserve Bank will not be making any further comment.”
We hope you enjoyed reading this article
If you would like unlimited access to AML Intelligence premium articles, newsletter delivered twice a week, access to our Global Bank Fines and Penalties database, free access to Boardroom Series events and much more, select one of our subscription options and become a subscriber!
