NAB, CBA Under Money Laundering Probe Yet Again

Richard Marley
June 17, 2021
2 minutes read
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Australia’s CBA and NAB are under regulatory scrutiny for providing correspondent banking services to BSP Financial Group.

CBA, the Commonwealth Bank of Australia, and NAB, National Australia Bank, are facing a money-laundering probe yet again for their compliance with AML (Anti-money Laundering) laws. The scrutiny came as a result of an investigation against one of their partners, which is set to result in sanctions being imposed in Papua New Guinea (PNG).

BSP Financial Group, which trades as the Bank of South Pacific, is facing fines and penalties in PNG for breaching the country’s AML laws.

According to Australian law, any sanctions passed out to the BSP would prove to be problematic for CBA and NAB, both of which are required to perform regular “due diligence assessments” on their “corresponding banks” to ensure they are not involved in money laundering.

Being a correspondent bank of BSP Financial Group, CBA and NAB provide the gateway for the clients of BSP to transfer money in and out of Australia.

The news was confirmed by the Australian Financial Review, where it was revealed that the probe into BSP began in late 2019 by the FASU (Financial Analysis Supervision Unit). At the end of last year, FASU sent out a “show cause notice” to the bank, asking them to justify why they should not be sanctioned for breaching PNG’s AML law.

The sanctions could possibly include heavy fines, enhanced auditing, and enforceable undertaking on top of a formal public warning.

NAB and CBA both denied revealing any more information. Here’s what CBA commented over the matter:

“We have processes and controls in place to ensure we meet all our legal and regulatory obligations.”

NAB also declined to comment on BSP, asserting that they conduct regular due diligence procedures on their customers and take financial crime obligations very seriously. Adding to this, the bank stated:

“We have an important role in monitoring and reporting suspicious activity and keeping Australia’s financial system safe,”

NAB has had a number of money-laundering probes against them. Just last week, AUSTRAC waned the bank get its due diligence procedures in order after their operations appeared to be highly indicative of possible money laundering issues.

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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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The emerging technologies have not only helped businesses to secure their operations but also encouraged fraudsters to use more advanced techniques of exploiting loopholes in systems. The majority of digital service providers like Payoneer, Paypal, Amazon, Walmart, and many others have implemented stringent regulations to verify the documents of their users but traditional methods are not serving the purpose of authenticating the true identities of customers. In the UK alone, consumers lost £1.3 billion in 2021 which is 27% more compared to the previous year. Undoubtedly, it can be established that prevailing document verification measures are not efficient enough to curb sophisticated fraud methods used by criminals. The whole system is in dire need of forensic authentication which is more advanced and has all capacity to counter scammers.

All the digital service providers particularly financial companies, educational institutions, and immigration departments are at high risk of document fraud. The criminals use forged documents to claim funds, admissions to universities, or entry to foreign countries. By implementing standards of forensic forgery detection, all online businesses can secure their onboarding system with very less risks of scams. The forensic authentication of documents involves scientific techniques to verify the identities of users leaving no room for criminals.

How Forensic Document Verification is Carried Out?

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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The prevailing traditional methods of document verification have encouraged criminals to exploit loopholes in systems inflicting financial losses on users. In the recent past, several cases have surfaced where scammers try to manipulate documents resulting in credit card fraud, illegal immigration, fake admissions to international universities, and many others. Let’s have a look at some of the high-profile cases of document fraud in different countries.

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Canada

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Want to know more about forensic forgery analysis of documents for digital businesses?

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NAB, CBA Under Money Laundering Probe Yet Again

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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