The Anti-Money-Laundering Question
FinTelegram has already stated in numerous reports that financial services providers (banks, e-money institutions or payment processors) are liable under civil and criminal law if they facilitate criminal businesses such as investment scams, sex trafficking, or child abuse with their services. Anyone who supports individuals and legal entities in processing illegally earned money commits money laundering.
To prevent this, there are Anti-Money-Laundering (AML) and Know-Your-Customer (KYC) guidelines. In recent years, financial service providers and payment processors have either disregarded these AML/KYC guidelines or have grossly negligently circumvented them or helped their criminal clients to circumvent them.
Observance of the AML/KYC regulations is meant to protect our society from terrorists and criminals. The danger posed to the stability of the financial markets and society by, for example, the booming cybercrime cannot be overestimated. AML/KYC is vital to protect our society and its taxpayers.
Westpac facing hundreds of millions in fines
As reported by OCCRP, Westpac, Australia’s second-biggest bank, is facing hundreds of millions of dollars in fines for disregarding the AML/KYC guidelines. The bank has already set up a provision of AUS$900 million (US$570 million). Westpac said the actual penalty “may be materially higher or lower than the [$900 million] provision.” The Westpac case could surpass the current record AUS$700 million (US $443 million) civil penalty that AUSTRAC levied against Commonwealth Bank of Australia in June 2018. The CEO’s of Westpac and Commonwealth Bank of Australia had to resign.
Westpac is facing accusations from the Australian Transaction Reports and Analysis Centre’ (AUSTRAC) that it facilitated 23 million violations of anti-money laundering and counter-terrorism regulations. According to OCCRP, some of the transactions processed are believed to have been payments to known child sex offenders in South East Asia.
According to Westpac, the breaches were the result of a bug in the bank’s system. Consequently, the bank said that it may have to invest up to AUS$130 million (US$82 million) to improve its financial crime response measures.
Westpac is not the only big bank in Australia involved in AML/KYC troubles. In December 2019, HSBC Australia informed AUSTRAC of several cross-border forex transactions that may have breached anti-money laundering rules.
However, the situation with financial service providers who intentionally or grossly negligently violate AML/KYC gets worse with careless regulators. In recent years, regulators under various regulatory regimes, such as Germany, Austria, Lithuania, Estonia or Bulgaria, have been rather reluctant to respond properly to AML/KYC violations and related complaints. This is changing, though.
FinTelegram und die European Funds Recovery Initiative (EFRI) arbeiten hart daran, das Bewusstsein für AML/KYC zur Bekämpfung der Cyberkriminalität zu stärken. In den letzten Monaten hat die EFRI bei den Behörden entsprechende Geldwäschebeschwerden eingereicht, um Gelder für Opfer von Cyberkriminalität zurückzugewinnen. Dem Geld zu folgen ist der einzige effiziente Weg, Cyberkriminelle aufzudecken und ihre illegalen Erlöse zu finden.