National Australia Bank has officially completed its obligations under an Enforceable Undertaking (EU) first agreed with AUSTRAC in April 2022, prompting the regulator to finalise the agreement.
The EU was entered into by NAB and four of its related entities to address identified gaps in compliance with Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws.
The EU focused on NAB’s customer identification procedures, ongoing customer due diligence, and the implementation and maintenance of a compliant AML/CTF program.
An independent external auditor appointed as part of the EU process found that NAB had satisfied the terms of the agreement and acknowledged the bank’s commitment to transparency and long-term remediation.
AUSTRAC CEO Brendan Thomas said NAB had made substantial progress but warned that compliance must be sustained.
“The closure of this EU reflects the progress NAB has made but it still doesn’t give the business a clean bill of health,” Thomas said in a media release.
“The EU set NAB on the right path, but compliance is not a one off task – it requires ongoing, incremental change. AUSTRAC expects NAB to continue to improve its systems and processes.”
The auditor also made further recommendations outside the original scope of the EU, including enhancements to NAB’s transaction monitoring and assurance frameworks. NAB has committed to implementing these.
“We welcome NAB’s decision to take on this additional remediation work. It builds on the changes made under the EU and strengthens the bank’s overall AML/CTF program,” Thomas said.
“However, finalising an EU is not the end of the assurance and integration work required by NAB. Elements of AML programs are interconnected, so deficiencies in one element can affect the effectiveness of another.
“Now that NAB has uplifted its AML/CTF program and procedures related to customer identification and due diligence, we’d like the business to consider what these changes may mean for the strength of other elements of its program, such as transaction monitoring.”
NAB CEO Andrew Irvine (pictured) welcomed AUSTRAC’s decision and said the bank has significantly reshaped its approach to financial crime risk.
“Through a transparent and constructive process with AUSTRAC and the external auditor, NAB has transformed our approach to managing financial crime,” Irvine said in a media release.
He confirmed that NAB would move forward with the auditor’s additional recommendations beyond the EU.
“We remain focused on the challenges that financial crime presents to our customers and society,” Irvine said.
“Banks play a critical role in monitoring and reporting suspicious, and potentially criminal, activity and we will continue to make investments that help to keep our customers, communities and bank safe.”
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