NAB enters an enforceable undertaking to improve its AML/CTF compliance

  • By Zilla Efrat

NAB has entered into an enforceable undertaking (EU) with AUSTRAC to improve its compliance with Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws.

The EU follows an enforcement investigation by AUSTRAC. The government financial intelligence agency identified non-compliance in targeted compliance assessments, as well as through self-disclosures from NAB.

But unlike CBA and Westpac who paid hefty fines after AUSTRAC investigations, NAB was not hit with any civil penalties.

AUSTRAC notified NAB of the formal enforcement investigation into five NAB reporting entities in June 2021, following ongoing regulatory engagement. The entities are NAB, JBWere, Wealthhub Securities, Medfin Australia and AFSH Nominees.

NAB will implement a comprehensive remedial action plan (RAP) to improve its systems, controls and record-keeping. Among the areas included are the NAB designated business group AML/CTF program, applicable customer identification procedures, customer risk assessments and customer due diligence.

An independent auditor will report to AUSTRAC annually on NAB’s progress, with the final report to be delivered to AUSTRAC by March 2025.

“We take our AML/CTF obligations very seriously,” says NAB CEO Ross McEwan. “We acknowledge the concerns that led to AUSTRAC’s investigation. We will continue to work closely with AUSTRAC as we deliver the agreed further actions.

“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.”

NAB says many activities required under the RAP have already begun and are expected to be delivered within the next 12 months. Other activities under the RAP require more time and resources to deliver a sustainable solution within the period of the EU. NAB has systems and controls in place to manage financial crime risk while activities under the RAP are completed.

NAB is assessing the likely costs of delivering the requirements of the EU and will provide an update when it delivers its half-year results on Thursday.