Austrac, Australia’s financial crime control agency, has alleged that the Commonwealth Bank of Australia had delayed or failed to report more than 50,000 cases of suspicious transactions of cash deposited through its automated cash deposit machines. Automated machines and banks seem to be the favorite methods of drugs rings to launder money.
Case against CommBank
Australia has stringent laws on anti-money laundering and counter-terrorism financing, which impose monitoring obligations on designated services, including financial institutions, bullion traders and gambling services. It is alleged that CommBank had delayed or failed to report over 50,000 suspicious transactions, totaling up to almost AUD$77 mln involving automated cash deposit machines.
Austrac’s acting CEO Peter Clark said in a statement:
“By failing to have sound AML/CTF systems and controls in place, businesses are at risk of being misused for criminal purposes. AUSTRAC's goal is to have a financial sector that is vigilant and capable of responding, including through innovation, to threats of criminal exploitation."
The penalties for breach of reporting obligations under the Australian anti-money laundering law are steep – up to AUD$8 mln per breach. Tabcorp Holdings, Australia’s largest bookmaker, had a case with 108 alleged breaches filed against it and paid AUD$45 mln in fines to settle it.
Banks engulfed by scandals
Banks have been engulfed by scandals in the recent past, ranging from facilitating tax evasion, fixing Libor rate, misselling products, etc. The perception that undue risks taken by bankers contributed to the global financial crisis is also one of the reasons for the unfavorable public opinion about banks. The banking sector has however survived these scandals and has become an important arm of governments’ intelligence gathering. Huge regulatory fines and penalties are a tool used by governments to ensure that banks take this role seriously.
Bitcoin – a tool
Bitcoin provides pseudonymity to its users, with users being able to hide behind a Bitcoin address. Other cryptocurrencies like Monero and Dash have improved on its privacy features. However, these are just tools, like the Internet and can be used by ordinary people as well as criminals. As these drug rings have shown, you don’t need to be tech savvy and use Bitcoin to launder money; good old cash and ATMs can be sufficient.