Financial Crime World

Headline: PNG Regulator Issues “Formal Warning” to BSP, CBA, and NAB in Money Laundering Case

Financial Analysis and Supervision Unit (FASU) of PNG Central Bank Takes Action

The Financial Analysis and Supervision Unit (FASU) of the Papua New Guinea (PNG) central bank has issued formal warnings instead of criminal charges to the Commonwealth Bank of Australia (CBA), National Australia Bank (NAB), and BSP Financial Group for their roles in a money laundering case.

BSP’s Breaches of Anti-Money Laundering (AML) Laws

BSP was found to have committed numerous breaches of anti-money laundering (AML) laws. As a result, FASU ordered BSP to take the following actions:

  • Replace certain members of its senior management, including CEO Robin Fleming
  • Hire an external auditor to maintain compliance with AML laws

Although BSP could have faced more severe consequences given the gravity of the breaches, FASU considered this the “least punitive” response. The regulator aims to address the systemic culture of non-compliance within BSP and protect the integrity of PNG’s financial system.

Role of CBA and NAB as Correspondent Banks

CBA and NAB are significant players in facilitating BSP’s clients’ money transfers to and from Australia. They provide correspondent banking services to BSP in the country. In compliance with Australian law, NAB and CBA are mandated to conduct thorough diligence assessments on their correspondent banks to prevent money laundering activities.

BSP’s Significant Presence and Correspondent Banking Relationships

BSP maintains a significant presence in Papua New Guinea and extends to surrounding countries such as the Solomon Islands, Tonga, Samoa, Fiji, the Cook Islands, and Cambodia. The financial institution also has correspondent banking relationships with renowned banks like Bank of America and Wells Fargo.

Concerns About AML Training for Contract Workers at NAB

Recent reports reveal that contract workers of NAB received minimal to no AML training, raising concerns about the potential for financial crimes to occur through these institutions. The Australian Securities and Investments Commission (ASIC) is reportedly looking into the matter.

Increased Scrutiny on BSP and Its Australian Partners

Both BSP and its Australian partners are under increased scrutiny as authorities seek to strengthen anti-money laundering regulations and deter financial crimes.