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"That's what this case is all about โ it's the facilitation of massive, high-level, cross-border tax evasion," says Nathan Lynch, Thomson Reuters' Asia-Pacific bureau chief, financial crime and risk."Westpac established a cloak of invisibility for cross-border payments โ tax authorities, financial regulators and agencies couldn't see anything....
"Westpac considered that the SWIFT payment network was costly and not an efficient means of sending low-value, large-volume payments for clients of global banks that need to make and receive payments around the world," was AUSTRAC's damning assessment.
To get around the "inconvenience" of SWIFT, Westpac set up two of its own products: LitePay for small transfers of up to $3,000 โ the favoured platform of those sending money to Filipino sex traffickers โ and the heavy-duty Australasian Cash Management (ACM) platform, capable of facilitating payments of up to $100 million.
Under the SWIFT rules, all of these payments need to be accompanied by sender and recipient data, regardless of the size. Without this data the global anti-money laundering and counter-terrorism financing (AML/CTF) framework is boxing in a blindfold.
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As AUSTRAC pointed out, Westpac provided "nesting arrangements" for other banks and financial institutions to shift money around the world without anyone knowing what was really happening, and who was shifting money to whom.
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"Westpac had limited or no visibility over the sources of funds ... there were no caps or limits on the volume and/or value of cross-border transactions through these arrangements," AUSTRAC alleges.
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"$11 billion may have been moved through these channels, but Westpac can't show the regulator where it all went. Even after a multi-year remediation project, there is still missing information," Thomson Reuters' Mr Lynch said.
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