News: WBC UPDATE 1-Australian regulator seeks penalty for Westpac's 'deficient' anti-money...

(Adds details from AUSTRAC, Westpac comment)

Nov 20 (Reuters) - Australia's financial crime watchdog called Westpac Banking Corp's (WBC) anti-money laundering oversight "deficient" and said it had applied to a court on Wednesday seeking a civil penalty.

The failure in oversight at Australia's second-biggest bank led to "serious and systemic non-compliance" with the Anti-Money Laundering and Counter-Terrorism Financing Act of 2006, the regulator AUSTRAC said in a statement.

Westpac failed to report over 19.5 million International Funds Transfer Instructions (IFTIs) to the regulator for nearly five years, AUSTRAC said.

It added that late instructions from four banks represented 72% of all IFTIs between November 2013 and September 2018, and amounts to A$11 billion.

"The failure to pass on information about IFTIs to AUSTRAC undermines the integrity of Australia's financial system and hinders AUSTRAC's ability to track down the origins of financial transactions, when required to support police investigations.”

Westpac said it was reviewing AUSTRAC's claim, adding that it had self-reported its failure to report the IFTIs to AUSTRAC.