SYDNEY, March 23 — Australia's Commonwealth Bank plans to enter mediation with the country's financial intelligence agency over a major anti-money laundering civil case that could be hugely costly for the lender.
The nation's biggest bank was taken to the Federal Court in August for “serious and systemic non-compliance” of anti-money laundering laws more than 53,000 times, with watchdog Austrac filing 100 other claims in December.
CBA said late yesterday that at the request of both parties, orders were made in the Federal Court “for the matter to be referred to mediation,” which has to take place before May 25.
The bank has admitted to the late submission of thousands of reports to Austrac, blaming a “systems-related error," but has said the breaches “should be treated as a single course of conduct.”
CBA also denied most of the additional Austrac claims in an amended defence in February, but has put aside A$375 million (RM1.13 billion) to pay for potential penalties.
The court ordered that Austrac file its reply to CBA's amended defence by April 6 and set a timetable for evidence in the proceedings in case the mediation is unsuccessful.
Commonwealth has endured a rocky few months since the Austrac case was lodged, with other regulators launching inquiries over its handling of the alleged breaches and its organisational culture.
Chief executive Ian Narev was a casualty of the fallout, announcing he will retire this year.
Meanwhile, the corporate watchdog Asic has taken the bank to court over alleged rigging of the benchmark interest rate, which is used to set the price of domestic financial products such as bonds and loans.
Alongside Australia's three other major lenders — National Australia Bank, Westpac and ANZ — CBA is also under scrutiny in a royal commission looking into misconduct in the finance industry.
The inquiry, which started last month, was set up by the government after public anger over a string of scandals in the massively profitable sector. — AFP