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Doorstop – Perth



Subjects: ADF and WA borders, IR reform

ATTORNEY-GENERAL: So, obviously I'm here to talk about today's record $1.3 billion civil penalty. That is obviously a matter that will be subject to approval by the court, but if it is approved by the court, that will be the biggest corporate penalty ever in Australia's history. It obviously reflects very significant serious and systemic failures on behalf of Westpac's compliance regime. That bank has now admitted to 23 million breaches of the counter-money laundering and counter-terrorism financing laws, which included failing to report international funds transfers worth more than $11 billion. Now as many people are already aware, some of those international funds transfers have been directly linked to the alleged facilitation or funding of child exploitation material in foreign countries. And the failures on Westpac's behalf have also exposed Australia's financial system, and therefore our community, to serious crimes including tax offences, money laundering and potentially terrorism financing. So this $1.3 billion I think can be seen as recognising an acceptance at least by Westpac of responsibility for its failings. But also, as evidenced in a statement that it's provided to the stock exchange today, an acceptance of the incredible seriousness of those failures in terms of their potential impact to the Australian community.

This penalty is almost double the previous penalty, which itself was a record, paid by the Commonwealth Bank in 2018, which was also for breaches of Australia's money laundering laws. And I might note with respect to that $700 million that some provision was made by Westpac in its own documents for this payment and some discussions were had with AUSTRAC. My role as an Attorney-General in these matters is to finally approve any settlement. My very strong view and the government's strident view was that the early appropriations that Westpac made and the figures that were being put early in negotiations with AUSTRAC were totally inadequate and that this $1.3 billion amount more properly reflects both the seriousness of the offending that Westpac had engaged in, but also an acceptance of the fact that these represent some of the greatest failures of a corporate entity in Australia's history to abide by Australian law.

I might note also for the benefit of everyone present that the penalty is non-tax deductible, which ensures that Australian taxpayers don't end up picking up the bill in any way shape or form. And I might just conclude by congratulating our regulator and investigator here AUSTRAC for their outstanding work. They have worked on this matter for some time. It has been their work including robust negotiations with Westpac which have led to the settlement amount, as well as of course uncovering this extremely serious and enormous failure on the part of Westpac to abide by Australia's laws which are meant to keep Australians safe. It should also, in the government's view, be a wake-up call to every other financial institution that these laws are there for a very important reason of protecting the Australian public. They are laws which are meant to be observed and obeyed strictly. And we have great resources, effort and acumen placed into ensuring that banks observe these laws. And when they do not, they are detected. And the result as we have seen here today can be record numbers.

QUESTION: CEO Brian Hartzer lost his job over this last year, why hasn't anyone faced any civil or criminal penalties over this?

ATTORNEY-GENERAL: Well this is a prosecution that would have gone potentially to trial, and no doubt in that trial there would have been any number of people called as witnesses and evidence given. The statement of agreed facts is being finalized before the court at the moment so people will have to wait to see precisely what is in that statement of agreed facts. But the reality is that people did lose their jobs, I think, in these circumstances quite properly and sensibly over these failings. But that no doubt is also going to be a matter for the board to consider on an ongoing basis as to how these failings occurred because they were systemic and those systems have to be improved and rectified and repaired.

QUESTION: Why should the board, police itself? There's no penalties, no deterrent for any individual who can facilitate these crimes?

ATTORNEY-GENERAL: Well that's a question of law but you're now talking about no penalties, whilst I've just announced to you the single biggest penalty in Australia's corporate history, $1.3 billion.

QUESTION: But that is $56.52c per breach - around 10 cents in the dollar for the amount of money that was facilitated offshore?

ATTORNEY-GENERAL: Is the suggestion that this penalty is too low?

QUESTION: Well, I get a $1,000 fine if I get pinged with my cell phone while driving. This is $56. 52c if I'm potentially financing terrorism. How does that stack up?

ATTORNEY-GENERAL: Well that's not the way in which courts view the accumulation of these matters, so there were rules around the accumulation and concurrency of penalties. My view in this was that the original quantums that were being talked about were far too low, but that $1.3 billion represents an appropriate penalty in all of the circumstances. But I can say that simply getting your, your cell phone and doing the calculation of 23 million breaches divided by the $1.3 billion is not how courts treat these matters as a matter of law, it's just not, it's not.

QUESTION: But how does that meet expectations? I mean it's, sure the penalty should be more for more offences rather than less for more offences?

ATTORNEY-GENERAL: Well they are different types of offences.

QUESTION: Isn't it worse to finance counter-terrorism than be texting while driving? You can say it's a different type of offence. You know it's worse to finance child exploitation than text while driving surely?

ATTORNEY-GENERAL: Well, no one in government is defending Westpac's record here, I mean it, it is abysmal. And there have been investigations which have linked the failures with respect to these matters to child exploitation matters overseas. The point about most of these offences is that they deprive the government and our regulators and investigators of information, which makes it in many instances impossible to know what actual crimes were facilitated by the failure to provide the information. So we simply don't have the information that we would need to know what is the ultimate result of each of these individual failures to provide information. The offences may in many instances - and we know at least in some instances - did have the effect of facilitating serious offences, but that is not something that we have information on with respect to each of those 23 million breaches by virtue of the fact that the breaches themselves are about a failure to provide information to government.

QUESTION: The Westpac penalty follows the fine handed to the Commonwealth Bank last year. If two of the biggest financial institutions have already been caught out how likely is it that other banks have also not been up to standard?

ATTORNEY-GENERAL: Well obviously this is a very sharp focus of AUSTRAC. These matters were uncovered by AUSTRAC, investigated by AUSTRAC, resolved by them. And their CEO will be giving a press conference later today to talk about those processes. As the minister responsible for settling these matters I have great confidence that we have very good investigative techniques to discover where these requirements at law are not being met. But I would say also that banks themselves as responsible corporate members of the Australian community have clearly an obligation to ensure that they are operating inside and in accordance with these laws.

QUESTION: Do you accept their concessions and their apology? Do you think they fully understand the magnitude of this issue?

ATTORNEY-GENERAL: My observation was that in the early stages of this with the quantums that were being talked about, which were not much more than that was paid by the Commonwealth Bank, that there was probably a lack of appreciation of the seriousness of these matters. I think that this penalty being almost double that which was the last record indicates that perhaps a little bit late there was a recognition and acceptance just how serious these breaches were.

QUESTION: Can you explain the scale of the offending here, both in the bank's position and the criminal activity that it aided? How serious is the situation and what was allowed to happen?

ATTORNEY-GENERAL: Well it's enormously serious because these are in effect offences of failing to provide information that government agencies can use to investigate further unlawfulness. As I've noted in some instances, there have been, has been an ability to understand what offences were facilitated by this failure to report. But the nature of failing to report means that there will be a lot of things that are simply unknown. But again the types of offences that can be failed to be investigated because of this failure to provide information are very, very serious, which is what makes the primary unlawfulness here of failing to provide the information so serious, particularly when there are 23 million counts.

QUESTION: But hasn't the bank and its shareholders now caught the brunt of the penalty rather than its managers because they would be the ones footing that $1.3 billion bill, not the CEO or senior executives that stood down?

ATTORNEY-GENERAL: Well, the bank as a whole, obviously pays the fine but of course as you've noted, there has already been people who have lost their jobs in effect because of these matters.

QUESTION: But shouldn't, I mean they have fallen on their sword, they haven't been punished by a court to do that, that's the bank policing itself and you know appeasing shareholders, surely they should still face a penalty under the law since it's a criminal offence?

ATTORNEY-GENERAL: Well these are breaches though that fall on the corporate entity. And that's the information that AUSTRAC has managed to uncover from its investigations. The corporate entity now pays $1.3 billion. The largest fine, corporate fine, in Australia's history. So I think that your, your suggestion that this is somehow inadequate I must say just doesn't stack up to what is actually going on here.

QUESTION: Just on Alan Tudge, yesterday a Federal Court Judge described his conduct, described his behaviour as criminal in delaying the release of a man from immigration detention. How can the minister have the confidence of the community after such scathing criticism?

ATTORNEY-GENERAL: Well, it's not the first time that in the robust environment of the law surrounding visa approvals, that there's been strong words said about what is in effect government undertaking its duties through the minister as a matter of policy, and we take a very strong view as a government on these matters. And just so that everyone's aware, this was with respect to 2012 illegal maritime arrival, where there were character concerns, and they were based around allegations of criminality. That person appealed to the AAT who set aside the refusal to grant a visa and substituted it with a decision to grant the individual a visa. The court in this matter, actually upheld the minister's argument that the AAT had been incorrect in its decision to grant the individual a visa. And obviously some robust statements were made with respect to the court, but the minister clearly rejects those conclusions. And ultimately, the minister's responsibility in the government's responsibility is to keep Australians safe, including making appeal submissions to overturn decisions to grant people's visas whom in the government's view should not have been granted the visa.

QUESTION: Do you think the comments from Justice Flick hold's much weight?

ATTORNEY-GENERAL: Well, I haven't read the decision in its entirety, I will. However, in these matters we of course listen to the court. But in this matter, the government took a very firm view that the original decision of the AAT to grant the visa was wrong. We argued that robustly in, in the relevant court that you're speaking of and won that argument.

QUESTION: Will the Federal Government appeal that ruling?

ATTORNEY-GENERAL: Well this this was the appeal.

QUESTION: Should they have granted the Afghan man a visa because of his treatment by Mr Tudge even though the court found errors in the application? Will the federal government, should the federal government challenge that?

ATTORNEY-GENERAL: We'll consider the decision on its merits in due course but that's not a decision that we've made today.

QUESTION: Just on Western Sydney Airport, as the chief law officer, can you define ministerial responsibility and how does oversight of the land deal fit into that given that it was so heavily criticized by the Auditor-General last week.

ATTORNEY-GENERAL: Well, as I understand it, and again I haven't read the entirety of the Auditor-General's report, but what he said was that there was a lack of information that had gone to the relevant decision maker which in this case was the deputy secretary. So obviously that's something that the minister will take into account and I understand the department itself are taking that criticism very seriously and conducting their own internal review as to those processes. But it's very often the case in lines of ministerial responsibility that decisions, such as purchasing are separated from the Minister for reasons of probity itself. Now in this case they were separated from the minister and given to the deputy secretary of the department. So the criticism of the Auditor-General is not of the minister, as I understand it, it is of the departmental processes. And obviously that criticism will be looked at, taken seriously by the department.

QUESTION: Pointing to the department rather than the minister, would you accept that criticism if it was Labor in that position?

ATTORNEY-GENERAL: Well, I haven't read the Auditor-General's report, but he's critiquing information available to the decision maker which was the deputy secretary of a department. Now obviously all governments want more rather than less and the appropriate amount of information before the decision maker, but the decision maker here was a deputy secretary of the department, not the minister.

QUESTION: Has any agreement been reached in terms of ADF support for hotel quarantine given the extra arrivals expected from tomorrow?

ATTORNEY-GENERAL: As I understand those discussions are still ongoing between the Premier's office and the Defence Minister.

QUESTION: Queensland Premier Annastacia Palaszczuk has sharply criticized the federal government and Defence for pulling out troops from the Queensland border by the end of September when she would like them in mid-October. The reasoning Defence has given for that is because unless there's a health risk, they're preparing for upcoming storm seasons and things like that, when the Premier's saying, well it is going to be a health risk if we withdraw the defence from the Queensland border. What do you make of the Premier's criticism?

ATTORNEY-GENERAL: So look, as I understand those agreements, they were time bound. So the provision of the ADF for physical border assistance was time bound to the date that you've mentioned by agreement with both parties, right. By agreement between the Commonwealth, and in that case the Queensland Government, so they agreed to that timeline. The rational reason for that timeline is that the ADF resources aren't endless for these things, and at different points in time, a rational calculation has to be made as to whether those resources will be used for quarantine, or for storm season, or for things that might otherwise arise. So it seems perfectly appropriate that those agreements for the allocation of ADF resources to specific things isn't just open ended and I would note that the Queensland Government itself agreed to that timeframe. Now, to the extent that there's reassessment at the end of that timeframe, that's just something that happens between like the Queensland Government making submissions, clearly they've made some, and the Commonwealth government through Defence looking at what all the other demands are on the ADF are across the country.

QUESTION: Just coming back to the questions on Westpac relating to individual accountability, it relates to ASIC's investigation of the matter. Deputy chair Dan Crennan said in July that ASIC was investigating Corporations Act breaches by Westpac and APRA has also said that it will also look into potential breaches under the banking executive accountability regime relating to the AUSTRAC matter. But just wondering what your expectations were on ASIC. Does it need to make a quick decision about this investigation, do you think any further action is appropriate?

ATTORNEY-GENERAL: So, I've actually spoken with Dan Crennan on a couple of occasions about that investigation. That's obviously an investigation as you say that's been undertaken by ASIC. They do that independently. I'm certainly satisfied that they're applying their resources and skills to that in the appropriate way. But that is ultimately a question that has to be directed to ASIC. But I am very, very comfortable with the strength and status of the investigations that are being conducted by ASIC into the individual possibility of liability in these matters. But today's announcement James as you're aware is not with respect to those investigations. This is about the assignment of responsibility to the corporate entity in a fashion that eclipses any other that has ever existed in Australia's history.

QUESTION: And now that the corporate entity has paid that fine, what is your simple message to the board of the bank to make sure this doesn't happen again?

ATTORNEY-GENERAL: Just get it right. I mean, this is an organisation of enormous resources. These are matters that should be an absolute first and fundamental priority for the executive, for the CEO, for the board. There shouldn't be any excuse for letting failures like this accumulate to the point where there are 23 million breaches. They have to just get a right.

QUESTION: Just back on borders once more. Do you think it's reasonable for Defence to continue to support just for a matter of weeks until mid-October from the end of September is, sure a deal could be worked out if the Premier says and the chief health officer says that it will become a health risk?

ATTORNEY-GENERAL: Well I think that's the same question. I mean, the original agreements were time bound by agreement with both sides. Right, Queensland, Western Australia, the Commonwealth. They agreed that these will be re assessed at the expiry of a certain point in time which you've nominated, and they are being looked at again at that point in time. But in terms of reasonableness what I don't think it's reasonable is to commit resources on an open ended basis without reviewing because of the fact that these circumstances are changing fairly dynamically. Borders are reopening across Australia. And so there can easily be a case made that there are better places where ADF support can be prioritised for greater effect.

QUESTION: Just on a local issue, you were WA's chief law officer for a while. We are expecting a verdict soon on the Claremont serial killer trial. Are you hoping that will provide some, some closure to the families and everyone involved?

ATTORNEY-GENERAL: Yeah of course. I mean you know everyone who's, who has grown up with it in and outside the legal fraternity, it will be a very emotional day for everyone involved. And, you know, as a representative of the Commonwealth Government my heart just goes out to the, to the families. I hope that today brings them some form of closure and relief and a sense that there's been an ultimate justice. We'll wait to see what Justice Hall does today, but I feel for the families on what will be a very very emotional day.