Anti-Money Laundering & Counter-Terrorism Financing

The Commonwealth Bank Group (the Group) is subject to, and complies with, applicable Australian laws including the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act 2006 (the Act).

Under the Act, the Group has adopted an AML/CTF Program consisting of a set of standards which set out how it identifies, mitigates and manages money laundering and terrorism financing risk.  View the AML/CTF Disclosure Statement
 

Background to the Act

The Act received Royal Assent and came into effect on 12 December 2006, and is part of a legislative package that will implement reforms to Australia’s AML/CTF regulatory regime. These reforms are designed to bring Australia in line with international AML/CTF standards. The Act is being introduced in phases over a two-year period. The Federal Government’s Australian Transaction Reports and Analysis Centre (AUSTRAC) is responsible for overseeing and monitoring compliance of the Act. More information about the AML/CTF Act.

Our Aspirations

Through our AML/CTF Program we look to:
 

• articulate, to customers and employees, the Group’s commitment towards fighting money laundering and terrorism financing
• protect the Group, our customers and our employees from becoming a victim of, or an accomplice to, illegal activities
• define how the Group will govern itself under the AML/CTF Act and associated laws
• promote ethical and professional standards within the Bank and broader financial sector
• adopt “better practices” that satisfy our regulatory obligations in a sustainable manner.

 

Money laundering

The primary goal of criminals is to make money. Often criminals use financial institutions to conceal their illegitimate funds with the aim of making ‘dirty money clean’ – known as money laundering.

The process of money laundering is generally completed over three stages:

1. Dirty money is ‘placed’ into the financial system.
2. A series of transactions provide a ‘layering’ effect to hide the origin of the funds.
3. Funds are ‘integrated’ back into the economy and appear to be lawful.

The Group will continue to work with AUSTRAC and the broader financial industry to curtail money laundering activity.

 

Terrorism financing

The financing of terrorism is the financial support, in any form, of terrorism or of those who encourage, plan, or engage in terrorism.

Those who finance terrorism transfer funds in such a way that the ultimate use, which is the support of terrorism, is concealed. The funds may be either legal or illegal in origin.

Business relationships with those who finance terrorism or other closely associated persons or entities could expose the Group to significant reputation, operational and legal risk.

 

Identification and reporting of suspicious matters

The Group will look to identify customers or employees behaving in a suspicious way. There are many different ways of identifying suspicious matters. Time and again, it’s often a number of factors that may raise suspicion. Some situations that may be considered suspicious could include:

• the unusual nature or circumstances of an interaction with a customer
• a knowledge of the customer’s background
• the customer’s transaction
• the business of the person involved.

The Group has the relevant policies and procedures in place to ensure any suspicious customer activities or transactions are reported to AUSTRAC.

Governance

Outlined in the table below are the key roles and responsibilities for the management and governance of the Group’s AML/CTF Program -

Role	Responsibility
Board Oversight	The Group’s Risk Committee will have ongoing oversight of the AML/CTF Program on behalf of the Group’s Board.
Ongoing oversight by Group Executives	Each of the Group Executives is responsible for ongoing oversight of the program as it affects their area of responsibility and for delivering effective compliance on a day-to-day basis with the program, the Act and rules within their area of responsibility.
AML/CTF Compliance Officer	Head of Regulatory Risk and Compliance for the Group has been designated the AML/CTF Compliance Officer for the Group.
Independent Review	The Group will commission an independent party to conduct an assessment of the Group’s AML/CTF program as part of its annual audit planning process. Audit Reports are provided to the Audit and Risk Committee in accordance with usual Group Audit practice.   Any findings relating to specific business units or specific reporting entities within the Group will also be communicated to the relevant Group Executive and subsidiary Board.

 

Our AML/CTF policy principles

1.The Group operates an AML/CTF Program that:

• meets the AML/CTF Act and associated laws
• Is supported by policies and procedures to combat money laundering and terrorism financing
• is monitored and tested to ensure policies and procedures remain effective and are adhered to
• supports the achievement of AML/CTF best practices.

 

2.The Group will identify and report suspicious behaviours by:
 

• ensuring authorities receive the necessary information to further investigate any illegal activities
• educating our employees so they can identify, monitor and report suspicious matters
• ensuring our employees are aware that suspicious matters are not limited to financial transactions
• submitting, when appropriate, suspect transaction reports to AUSTRAC.

 

3.The Group will endeavour to protect itself from being used for illicit activities by:
 

• conducting customer identification and verification processes to ensure our customers are who they say they are
• only dealing with legitimate customers and ensuring our products and services are not being utilised by money launderers, terrorist financers or anybody that chooses to support these types of individuals
• carrying out ongoing customer due diligence.

 

4. The Group will manage Employee Due Diligence by screening all prospective and existing employees, contractors and temporary employees.

 

5. The Group will retain all relevant records for seven years should any investigations related to unlawful activities be conducted.

 

6. The Group’s AML/CTF training program will ensure employees receive relevant and ongoing training. The program will provide an awareness of money laundering and terrorist financing, indicate how to identify and report a suspicious matter and inform our employees of our regulatory obligations under the AML/CTF Act.

View the AML/CTF Disclosure Statement
 

View the Group's Wolfsberg AML Questionnaire