AML/CTF - Westpac Group policy
- Introduction and scope
- Westpac Group's 5 key AML/CTF principles
- Policy roles and responsibilities
- Westpac Group's AML/CTF program
- Monitoring and reporting
- Further information
Introduction and scope
As with any financial institution, there is a risk of Westpac Group products and services being used to launder money and finance terrorism. Australian law and applicable local laws in the jurisdictions in which we operate, requires us to put training, processes and systems in place to identify, manage and mitigate this risk. We do this to protect the Group's reputation, to comply with relevant laws and to be a good corporate citizen. Failure to do so may result in social harm, significant penalties, including legal and regulatory action.
Our AML/CTF policy
- Sets out how the Westpac Group complies with its legislative obligations
- Applies to all business divisions and employees (permanent, temporary and third party providers) working in Australia, New Zealand and overseas.
Money laundering is the process of hiding or disguising the source of illegally obtained (“dirty”) funds to make them appear legitimate (“clean”), e.g. by filtering them through the financial system.
Money laundering reduces the risk of detection and confiscation by authorities. It is just as serious as the criminal activity behind it – and preventing it can help reduce crime.
Terrorism financing differs from money laundering in 3 main ways:
- Its primary purpose is to disguise the ultimate use of the funds, as opposed to their origin
- It can involve relatively small sums of money, which can have a huge impact in terms of death, destruction and disruption
- Although terrorists may finance their activities through crime, legitimate funds can also be misappropriated to finance terrorism.
The AML/CTF Act provides a list of ‘designated services’, such as opening an account or making a deposit. Before receiving any of these designated services, customers will be required to provide proof of identity or similar documentation.
Westpac Group is required to collect and verify this information, depending on the type of customer:
- Personal - an individual person of any nationality
- A sole trader - a person who trades in their own legal right without the use of a company structure, incorporation or partners and who, alone, has full liability for the activities of the business
- Domestic company - incorporated in Australia, including proprietary, public and listed public companies
- Foreign company incorporated outside Australia
- Partnership - a relationship between persons (the partners) carrying on business in common, under a partnership agreement, with a view to profit
- Trust - a relationship where the trustee holds property or assets for a beneficiary. The trustee can be an individual, a group of individuals or a company.
- Association - a group of persons who have agreed to join together in pursuit of one or more common objectives. An association can be incorporated or unincorporated.
- Registered co-operative - a legal entity owned and controlled by the people for whom it was established and who benefit from using its services
- Government body - can be domestic (e.g. Commonwealth, State, Territory) or foreign government body.
Money laundering and terrorism financing (ML/TF) are sometimes detected because a customer acts or behaves in a suspicious way.
For a ‘suspicion’ to be valid, we must have reasonable grounds to believe ML/TF activity may be occurring. To support this, employees receive training in identifying and reporting suspicious matters.
Westpac Group's 5 key AML/CTF principles
- Comply with AML/CTF legislation in the countries we operate in
- Strive to fulfil international standards as detailed in the recommendations of the Financial Action Task Force (FATF)
- Work in conjunction with the Australian Government and the governments of the countries we operate in, and support their objectives in relation to the prevention, detection and control of ML/TF
- Westpac may decide not to provide products or services based upon decisions guided by ML/TF risk appetite and corporate social responsibility
- Maintain and comply with an AML/CTF program, as required by Australian AML/CTF legislation.
Policy roles and responsibilities
Westpac’s Banking Corporation Board of Directors (the Board) and Senior Management have ongoing oversight of our AML/CTF policy and procedures. All permanent and temporary employees must comply with these, attend training specific to their role, and report suspicious matters or behaviours.
We have a dedicated AML/CTF Officer (the Group Money Laundering Reporting Officer - MLRO), responsible for monitoring the status and effectiveness of the Group’s AML/CTF risk management and compliance and reporting it to our Executive team.
The MLRO also leads a Group AML/CTF team, which maintains Westpac Group’s AML/CTF policy framework, and provides subject matter expertise and advice to our businesses.
Westpac Group's AML/CTF program
The design and implementation of the program was tailored to our ML/TF risk profile, applying specific systems and controls, including:
- ML/TF risk assessment
- Employee training
- Employee and customer due diligence
- Transaction monitoring.
Monitoring and reporting
We also report the following information to AUSTRAC, Australia’s AML/CTF regulator:
- Transactions with a cash component of AUD10,000 or more
- Electronic transfers of funds into or out of Australia
- Any transactions or other activities regarded as suspicious.