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Highlights
- NAB entered into an enforcement undertaking with the AUSTRAC today.
- NAB promises to improve its anti-money laundering program, system and control.
- Final report needs to be presented to AUSTRAC by 31 March 2025 by an external auditor.
One of Australia's top banking institutions, National Australia Bank Limited (ASX:NAB) garnered a lot of attention on Monday after it shared an AUSTRAC update through ASX. Since morning, shares of NAB have been trading in the red.
Shares of NAB closed 0.950% lower at AU$32.320 per share today. The shares were in line with its benchmark index, trading tad lower. Also, NAB share prices were in line with the benchmark ASX 200 index, which was trading 1.32% low at 2:45 PM AEST.
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What is the NAB and AUSTRAC update?
The banking giant informed the market that it has entered an enforceable undertaking (EU) with the Australian Transaction Reports and Analysis Centre (AUSTRAC). EU is a legal agreement between the authority and the other party, in which the other party has to undertake certain activities mentioned in the agreement. NAB has safeguarded itself from a heavy penalty/fine with the deal.
By entering an EU, NAB has vowed to improve its system to ensure compliance with counter-terrorism financing and anti-money laundering laws (AML/CTF). As per the EU, NAB would implement an AUSTRAC approved remedial action plan (RAP) to ensure the upliftment of record-keeping, controls and systems. NAB is required to complete the RAP by 31 December 2024.
The RAP includes upliftment of the AML/CTF program, customer identification process, transaction monitoring, customer due diligence and governance and assurance.
Image source: © 2022 Kalkine Media®
A financial crime executive committee of NAB will oversee the delivery of RAP. NAB also informed that to ensure the protection of the community and customers, it is investing with law enforcement and regulators.
The news follows the enforcement investigation by AUSTRAC last year in June that raised concerns about the AML/CTF system of NAB.
Image source: © Klyaksun | Megapixl.com
What did AUSTRAC and NAB say on the development?
Ross McEwan, NAB's CEO, reportedly said that the bank would work with AUSTRAC and deliver the agreed-upon actions. McEwan acknowledged that NAB took a longer time to address the concerns raised by AUSTRAC and that there is a lot NAB is required to do.
McEwan added that:
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