Austrac coming for NAB

According to Banking Day:

Ross McEwan, NAB’s new CEO, is in a hurry.

NAB has admitted to a litany of breakdowns in systems and governance relating to money laundering and terrorism financing.

Reported by The Australian newspaper on Saturday, the leak looks like an effort to preview what may well be an imminent statement of claim from Austrac over AML breaches.

According to internal NAB logs, system failures affected almost 150,000 customer records that were not properly screened and rated for money-laundering and terrorism-financing risk because the records were not readily available in its compliance monitoring system, the newspaper reports.

NAB also told Austrac it had incorrectly risk-rated 5000 customer profiles, resulting in lower than required due diligence being completed on 1690 customer profiles.

The Australian also revealed that according to NAB’s internal breach registers, “for a month in 2013 NAB failed to update its lists that it uses to screen transactions sent through SWIFT to countries subjected to sanctions.

Previously at Banking Day:

National Australia Bank’s former chief risk officer David Gall warned the group’s directors in October last year that the company’s anti-money laundering procedures remained “weak” and “ineffective” even after at least A$300 million was spent upgrading the dismal systems.

In a 26 page report on the condition of the bank’s risk management, Gall also alerted the NAB board to Austrac stepping up its interactions with the bank – a development he indicated carried “significant regulatory risk”.

Gall, who is now a senior executive in NAB’s institutional bank, told the board that some AML issues were “pervasive across the group including product, distribution and operations”.

His descriptions of the group’s breaches and ineffective compliance confirm that NAB is unlikely to avoid sanctions after Austrac’s vigorous pursuit of CBA and Westpac.

Click here if you wish to download a copy of the Risk management report presented to the NAB board in October 2018.

One wonders what kind of charming behaviour NAB has funded under Ken Henry.

David Llewellyn-Smith
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