Formal Warning Issued to Westpac Over AML Failures, RBNZ Discloses

Richard Marley
August 11, 2021
2 minutes read
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The bank underreported 8000 corporate transactions made overseas between July 2018 and February 2019, RBNZ reported.

The Reserve Bank of New Zealand (RBNZ), has issued a formal warning to Westpac’s New Zealand branch for failing to report transactions as required under AML/ CFT laws of the country.

According to the AML/CFT law, all reporting entities have been mandated to report prescribed transactions (including international wire transfers of AUD 1,000 or more) to the Police’s Financial Intelligence Unit.

However, Westpac’s transaction reporting system was designed in such a way that 8000 international corporate transactions were left unreported between July 2018 and February 2019. “This formal warning reflects the importance of the prescribed transaction reporting regime in building an intelligence picture across New Zealand’s financial system, and reiterates the seriousness with which we view non-compliance with the AML/CFT Act,” stated Geoff Bascand, RBNZ’s deputy governor.

Following the formal warning, Westpac must carry out necessary tasks to maintain compliance with AML/CFT laws, including a review of its procedures, policies and controls for reporting prescribed transactions for the identification and improvement of any gaps, ensuring all reportable transactions are detected and reported in the future.

In the event Westpac fails to meet the set standards in the future, civil or criminal enforcement action may be taken, the RBNZ said.

New Zealand’s central bank formally warned Westpac for failing to report certain transactions as required under anti-money laundering legislation https://t.co/oSisZUfimx

— Bloomberg (@business) August 11, 2021

The findings have surfaced as a result of a survey conducted by RBNZ on New Zealand’s registered bank’s correspondent banking, prescribed transaction reporting, and transaction monitoring.

In November 2019, AUSTRAC alleged that Westpac had failed to stay compliant with AML laws on over 23 million occasions. As a result, Westpac was forced to pay a penalty worth AUD 1.3 billion and remediated its compliance failings. The survey was launched in the wake of these events and has revealed how Westpac has once again failed to meet AML compliance standards.

Other than failing to report prescribed transactions, the survey found Westpac had satisfactory procedures and controls in place. RBNZ has also announced plans to make an on-site visit to further inspect the effectiveness of the bank’s policies and procedures.

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ASIC Expands its Team to Enhance Cryptocurrency Regulations
Australia’s financial regulator has enhanced the size of its crypto team. The crypto regulatory measures include their application for financial services licenses and show that specific crypto platforms have particular liquidity in reserve.

After shifting popular blockchain from a proof-of-work (PoW) to a proof-of-stake (PoS) system, ASIC, Australia’s financial regulator, has increased the size of its crypto team.

U.S. Security and Exchange Commission Chairman Gary Gensler stated that PoS-based tokens might be classified as securities.

The decision of ASIC to keep PoS tokens for example Ethereum, Cardano and Solana under its remit will further clarify the situation and enable crypto regulations to be more effective. To cope with the latest regulatory reforms, the crypto exchange must either delist the tokens or start complying with robust crypto laws.

Such moves may force a few crypto firms to manage their operating models. Even the largest stablecoin of the crypto market, Tether, has been caught in a controversy created over the failure of holding enough dollar reserves to back the stablecoin.

The crypto regulatory measures include their application for financial services licenses and show that these platforms have particular liquidity in reserve.

The final decision by the regulator has not been issued yet. Greg Yanco, the executive director for marketers, said that ASIC won’t be a “cheerleader for crypto assets.”

SEC Newgate carried out research the last November. It showed that 44% of Australian retail investors reported holding crypto. Out of these investors, only 20% viewed crypto as high-risk.

The chairperson of ASIC responded and said that the regulators were “concerned that there are limited protections for crypto-asset investments given they have become increasingly mainstream and are heavily advertised and promoted. There is a strong case for regulating crypto-assets to better protect investors.”

According to Yanco, until the last year, cryptocurrency was not such a high priority. Still, due to the decline of cryptocurrency in the previous few years and investors wiped out around the globe, ASIC expanded its team. It made crypto one of its “core strategic projects.”

Suggested Read: Regulatory Authorities to File a New Bill to Secure the Citizens from Cyber Criminal Activities

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Forensic document verification involves incorporation of scientific rules in examining the authenticity of records. There are experts in this field who carry out all the operations using specialized methods. Nowadays, the use of forensics is rising, especially in courts where no document is accepted without authentication. By using several techniques like handwriting identification, ultraviolet light sources, microscopes, photography, and infrared imaging in the laboratories, a document is verified. All the major jurisdictions have formed dedicated institutions which overlook the process of document verification. The American Board of Forensic Document Examiners (ABFDE) is the primary authoritative body responsible for monitoring forensic operations in the US, and any person carrying out these activities anywhere in the country must be a member of this board.

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Formal Warning Issued to Westpac Over AML Failures, RBNZ Discloses

Forensic Document Verification – A New Standard

How Forensic Document Verification is Carried Out?

High-Profile Crime Cases of Document Fraud

Gang Arrested for Printing Fake Documents in Greece

Criminal Network Busted for Distributing Fake Documents

Regulatory Authorities Monitoring Document Fraud

Canada

Australia

Document Forgery Forensic Authentication – Ensuring KYC Compliance

What Shufti Pro Offers?

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Let’s prove your customer’s

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