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National Australia Bank (ASX: NAB) has today entered into an enforceable undertaking (EU) with Australia’s financial crime regulator which has seen the bank promise to uplift its compliance with anti-money laundering and counter-terrorism financing (AML/CTF) laws.
As part of the agreement, NAB will implement a comprehensive remedial action plan to improve to its systems, controls and record keeping following an AUSTRAC investigation which identified concerns about the bank’s AML/CTF compliance.
AUSTRAC notified NAB of the formal enforcement investigation into five NAB reporting entities in June 2021, following ongoing regulatory engagement. The entities are National Australia Bank Limited, JBWere Limited, Wealthhub Securities Limited, Medfin Australia Pty Ltd, and AFSH Nominees Pty Ltd.
AUSTRAC says it will monitor NAB’s progress on the action plan, which includes review of the bank’s customer identification procedures, its customer risk assessment and how it monitors transactions.
In addition, an independent auditor will report to AUSTRAC annually on progress, with the final report to be provided to the watchdog by March 2025.
AUSTRAC CEO Nicole Rose said that the enforceable undertaking aims to ensure that NAB continues with its remediation programs to uplift its compliance and combat the risks of serious and organised crime.
“National Australia Bank has demonstrated a commitment to uplifting its AML/CTF controls, and has undertaken significant work identifying and implementing improvements to its programs,” Rose said.
"NAB has worked collaboratively with AUSTRAC throughout the investigation, and this enforceable undertaking will help to ensure NAB meets its compliance and reporting obligations.”
NAB CEO Ross McEwan said the bank took its AML/CTF obligations seriously and would continue to work with AUSTRAC to deliver on the proposed improvements.
“We recognise it has taken us longer to fix the concerns raised than it should have. We welcome AUSTRAC’s acknowledgement that NAB has undertaken significant work to date - and we accept that there is more to do,” McEwan said.
“It is essential that everyone in our bank is focussed on getting the basics right, every time, and keeping our customers and bank safe. Keeping criminals out of the financial system is a top priority for NAB. We recognise our opportunity to better detect, deter and disrupt the flow of illegal money at a time when the threat is evolving at an incredible rate.
“We have a plan to make our bank simpler for customers to use, while safeguarding against the criminal threat. The EU provides a clear timeline as we further build capability, increase resourcing, continue to modernise our systems and improve controls and governance.”
NAB says it is assessing the likely costs of delivering the requirements of the EU and will provide an update at its half year results on 5 May 2022.
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