Five customers of the Commonwealth Bank allegedly financed terrorism through six transactions using intelligent deposit machines, according to the financial intelligence agency Austrac.
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In response to questions from a senate committee about its case against the CBA, the agency's acting chief executive Peter Clark pointed the terror financing allegations contained in Austrac's 600 page statement of claim filed in the Federal Court on August 3.
"Of the late threshold transaction reports we've claimed that six of those relate to cash transactions by five customers whom the bank has accessed as (having) a potential link to terrorism or terrorism financing," Mr Clark said.
Mr Clark also refused to say if he was confident that the CBA was now complying with anti-money laundering and counter terrorism legislation given that the case set to begin on September 4.
However in response to a question from Queensland Labor senator Murray Watt, Mr Clark gave Australia's other major banks - Westpac, the ANZ, and National Australia Bank - an "all clear".
"We've looked at the other banks in particular and we have not identified the same issues with those banks," Mr Clark said.
The Commonwealth Bank is defending allegations from Austrac (the Australian Transactions Reports and Analysis Centre) that it breached anti-money laundering rules on almost 54,000 occasions and did not report suspected criminal activity when it emerged.
While conceding "mistakes were made", the Commonwealth Bank has repeatedly said there was intention to financially benefit from alleged transactions by drug runners, terrorist financers and other criminal elements.
Mr Clark was also pressed by Greens senator Peter Whish-Wilson to explain why Austrac had levelled civil rather than criminal charges against Australia's biggest bank.
"The evidence we've gathered as part of the matter supports taking civil penalty action. We do have some criminal provisions but they don't apply to the particular offences in this matter," Mr Clark said.
"We give very careful consideration to what measures we seek to apply particularly when it's of a serious nature. So a lot of careful consideration was given before filing civil penalty proceedings in this case."
Independent senator Derryn Hinch quizzed Mr Clark on the extent of the potential penalties which if applied to each of the 54,000 breaches would amount to around $960 billion.
"I can't comment on the penalty other than to say it's a matter for the Federal Court. There's a maximum penalty per contravention and that's $18 million," Mr Clark said.
However industry figures say speculation in the media about the maximum penalty is unrealistic and unsustainable while Ian Narev told the ABC that some estimates were "out of the ballpark".
Earlier this week, Commonwealth Bank chairman Catherine Livingstone said chief executive Ian Narev would retire by June 30, 2018 as part of succession planning.
Mr Narev's scheduled departure follows a decision by the CBA board to cut 2017 bonuses for Mr Narev and the CBA group executive to zero as it deals with the Austrac allegations.
In a separate investigation, the Australian Securities & Investments Commission is examining whether the CBA breached continuous disclosure rules when it did not report the money laundering risks when they emerged in 2015.