On Friday, Westpac filed its defence in the Federal Court in relation to proceedings brought by AUSTRAC regarding alleged breaches of anti-money laundering and counter terrorism financing laws.
"Westpac accepts the gravity of the issues raised by the AUSTRAC claim and has made a large number of admissions in its response to the Statement of Claim," the bank said in a statement.
The defence filed makes a series of admissions of failures. These include the non-reporting of international fund transfer instructions (IFTIs) and failure to trace associated information.
IFTIs must be reported to AUSTRAC within 10 days of the transaction.
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The bank also admitted to record keeping failures, ongoing customer due diligence failures and failures regarding certain correspondent banking obligations.
The defence documents filed with the court also include explanation around some of the allegations from AUSTRAC, including about the nature of the transaction monitoring and correspondent banking assessments Westpac carried out during the period in question.
"Westpac acknowledges that financial crime is a serious threat to society and is determined to continue to lift its standards and meet its anti-money laundering and other financial crime obligations," the bank said.
AUSTRAC alleges that Westpac's oversight of its anti-money laundering and counter terrorism financing program was deficient.
Those deficiencies, it alleges, meant the bank failed to carry out due diligence on customers sending money to South East Asia in circumstances where there was a known child exploitation risk.
It is alleged that Westpac breached the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 on over 23 million occasions.
"Westpac and AUSTRAC continue to engage constructively and are discussing a Statement of Agreed Facts and Admissions," Westpac said.
Ahead of its 2020 first half results this year, Westpac chief executive Peter King flagged an expected increase in costs associated with the AUSTRAC proceedings of $1.03 billion.