Westpac, one of Australia's largest banks, has agreed to pay a record-breaking penalty of A$1.3bn (£0.7bn) to settle the nation's biggest breach of money laundering laws.
The penalty is a result of a court action last year from the financial intelligence agency AUSTRAC that accused Westpac of breaching its AML and counter terrorist financing (CTF) regulations more than 23 million times.Austrac also alleged that some of these breaches were linked to cases of child exploitation.
If the billion-dollar fine is approved by a court, it will be the largest civil penalty in Australian corporate history. Concerns about child exploitation came after Austrac identified payments made to suspected operators in the Phillipines.
I would like to apologise sincerely for the bank's failings"
Australian media has since linked the bank to individual cases, including an alleged paedophile's suspected use of Westpac's transfer system to pay for child sex overseas.
"I would like to apologise sincerely for the bank's failings," CEO Peter King said in a statement. "We are committed to fixing these issues to ensure that these mistakes do not happen again. This has been my number one priority."
King added the company has made changes to how it monitors transactions, and has hired hundreds of people responsible for looking out for financial crime. The bank also created an executive position who is directly responsible for improving its ability to address financial crimes.
The allegations rocked the bank and led to the resignation of former CEO Brian Hartzer last November.
The penalty reflects the "serious and systemic nature" of Westpac's non-compliance, AUSTRAC said in a statement.
"We have been, and will continue to work collaboratively with Westpac and all businesses we regulate to support them to meet their compliance and reporting obligations to ensure this doesn't happen again in the future," said AUSTRAC chief executive Nicole Rose.
The cases comes amid several investigations around the world into top banks for their alleged failures to prevent money laundering. HSBC, Danske Bank and Rabobank have all been involved in high-profile scandals.