Australian bank Westpac is to pay a record fine of A$1.3 billion (£722 million) after it admitted more than 23 million breaches of money-laundering laws.

The fine will be Australia's largest-ever civil penalty if it is approved by the country's Federal Court. It was imposed by AUSTRAC (the Australian Transaction Reports and Analysis Centre) - the agency responsible for preventing abuse of the financial system - for Westpac's failure to meet the requirements of the country's Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

Westpac admitted that it had failed to properly report more than 19.5 million International Funds Transfer Instructions (IFTIs) involving more than A$11 billion (£6.1 billion) in total. The bank also did not pass on information regarding the origins of some of the IFTIs and did not communicate the source of funds to other banks in the transfer chain.

Westpac admitted it did not keep records relating to the origin of some of these international funds transfers. It also accepted that it did not properly assess and monitor risks associated with money movements in and out of Australia; including transactions involving jurisdictions that were known to be high risk.

The bank also said it had failed to carry out appropriate customer due diligence in relation to suspicious transactions associated with possible child exploitation.

Nicole Rose, AUSTRAC's chief executive officer, said: "Westpac's failure to implement effective transaction monitoring programmes and its failure to submit IFTI reports to AUSTRAC and apply enhanced customer due diligence in relation to suspicious transactions meant AUSTRAC and law enforcement were missing critical intelligence to support police investigations.''

Rose added that such a large number of breaches over a number of years was unacceptable and could have been avoided with better processes in place. Westpac group chief executive Peter King said the bank was committed to "fixing the issues to ensure that these mistakes do not happen again''.

But Westpac is just the latest in a long list of banks that have been in the spotlight recently for their involvement in high-profile scandals concerning breaches of money laundering laws. They join the likes of HSBC, Danske Bank and Rabobank in creating the impression that banks globally are struggling to meet their obligations and deliver what is expected of them.

A fine of this size goes to show how seriously regulators and authorities are taking the transgressions of the banking sector when it comes to failures to prevent money laundering.

Read more about: Anti-Money Laundering Investigations.

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