A trial of Westpac Banking Corp over accusations of systemic breaches of money laundering laws that enabled illegal payments between known child sex offenders could take place in the first half of 2021, an Australian court said on Wednesday.
The country’s second-largest lender and the financial crimes watchdog, AUSTRAC, have failed to agree on a set of facts, setting the stage for a trial that could start early next year, before the court can approve any fine for the bank.
“It seems like the section 81/section 85 question is something that may have to proceed to a trial of liability,” judge Jonathan Beach said in a Melbourne court, referring to legal requirements to maintain an appropriate anti-money laundering and counter-terrorism financing program.
“The other contraventions seem to be agreed in substance by Westpac.”
In a bombshell lawsuit in November, AUSTRAC sued Westpac for 23 million alleged breaches of anti-money laundering laws, including payments between known child exploiters.
Earlier this month, the regulator said it was investigating new issues reported by Westpac, including suspicious matters related to potential child exploitation and issues involving 272 customers, a process that has delayed proceedings, the court heard on Wednesday.
“The scale of those reports and the substance of those reports has already raised concerns which … AUSTRAC needs to work through,” AUSTRAC lawyer Wendy Harris told the court.
“So there is a real prospect that the AUSTRAC CEO will complete an investigation and say we need to put forward some additional allegations.”
The investigation of the new matters would involve tens of thousands of documents, such as customers’ statements of accounts, some of which would need to be produced manually, Westpac’s lawyer said.
The first liability hearing is expected to take place in the first quarter of 2021, Beach said.
The hearing was adjourned until Sept. 18, a date by which the court expects AUSTRAC to have lodged any new allegations, and Westpac to have tabled its defence.