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Westpac’s scandal highlights a system failing to deter corporate wrongdoing

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Elise Bant, University of Melbourne and Jeannie Marie Paterson, University of Melbourne

The news that Australia’s anti money-laundering regulator has accused Westpac of breaching the law on 23 million occasions points to the prospect that powerful members of corporate Australia are still behaving badly.

This despite the clear lessons offered by the Banking Royal Commission.

Regulators are still struggling to find the right balance between pursuing wrongdoers through the courts – an admittedly costly, time-consuming and highly risky business – and finding other means to punish and deter misconduct.

Australia’s anti money-laundering regulator, AUSTRAC, is seeking penalties against Westpac in the Federal Court.

Each of the bank’s alleged contraventions attracts a civil penalty of up to A$21 million. In theory, that could equate to a fine in the region of A$391 trillion.
In practice, it is likely to be a mere fraction of that sum. Commonwealth Bank breached anti-money-laundering laws and faced a theoretical maximum fine of nearly A$1 trillion, but settled for A$700 million.

No doubt the reality that companies can minimise penalties is a factor in why breaches continue.

This impression is reinforced by revelations last week that financial services company AMP continued to charge fees to its dead clients despite the shellacking it received at the hands of the royal commission.

Last month a Federal Court judge refused to approve a A$75 million fine agreed between the Australian Competition and Consumer Commission and Volkswagen to settle litigation over the car company’s conduct in cheating emissions tests for diesel vehicles. The judge was reported to be “outraged” by the settlement, which meant Volkswagen did not admit liability for its misconduct.

The A$75 million is a drop in the ocean of the likely profits obtained from this systemic wrongdoing and pales into insignificance next to fines imposed in other countries.

Proposals for law reform

So business as usual, right?

Maybe not for long. The Australian Law Reform Commission has just released a discussion paper on corporate criminal responsibility.

It points out that effective punishment and deterrence of serious criminal and civil misconduct by corporations in Australia is undermined by a combination of factors.

These include a confusing and inconsistent web of laws governing the circumstances in which conduct is “attributed” to the company. Similar problems of inconsistency arguably also undermine other key areas, such as efforts to give courts the power to impose hefty fines based on the profits obtained by the wrongdoing

The repeated attempts to come up with new and more effective attribution rules arise because corporate wrongdoers are “artificial people”. For centuries, courts and parliaments have struggled with how to make them pay for what is done by their human managers, employees and (both human and corporate) agents. All too often a company’s directors disclaim all knowledge of the wrongdoing.

To fix this, the ALRC recommends having one single method to attribute responsibility. It builds on the attribution rule first developed in the Trade Practices Act 1974 (Cth) and now used, in various forms, across various statutes.

The ALRC proposes that the conduct and state of mind of any “associates” (whether natural individuals or other corporations) acting on behalf of the corporation should be attributable to the corporation.

This goes well beyond the traditional focus on directors and senior managers and would provide some welcome consistency in the law.

Importantly, serious criminal and civil breaches that require proof of a dishonest or highly culpable corporate “state of mind” can be satisfied either by proving the state of mind of the “associate” or that the company “authorised or permitted” the conduct.

A “due diligence” defence would protect the corporation from liability where the misconduct was truly attributable to rogue “bad apples” in an otherwise a well-run organisation. There would be no protection in the case of widespread “system errors” and “administrative failures” so pathetically admitted during the royal commission.

The ALRC also proposes that senior officers be liable for the conduct of corporations where they are in “a position to influence the relevant conduct and failed to take reasonable steps to prevent a contravention or offence”.

This would place the onus on those in a position to change egregious corporate practices to show they took reasonable steps to do so.

Removing the penalty ceiling

These recommendations, if adopted could prove a game-changer for regulators asking themselves “why not litigate?” and corporations used to managing the fall-out of their misconduct as simply a “cost of business”.

The ALRC’s recommendations that the criminal and civil penalties should be enough to ensure corporations don’t profit from wrongdoing will be welcomed by many. Some academics have gone further and argued that the law should be changed to make it clear that civil, not just criminal penalties, should be set at a level that is effective to punish serious wrongdoing.

The ALRC also raises the question whether current limits on penalties should be removed. The Westpac scenario might be just the kind of case to make that option attractive.The Conversation

Elise Bant, Professor of Law, University of Melbourne and Jeannie Marie Paterson, Professor of Law, University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Vladimir Putin backs India’s independent foreign policy, warns against sanctions pressure

Russian President Vladimir Putin said sanctions threats against India would boomerang, praising PM Narendra Modi’s leadership and India’s commitment to pursuing its national interests.

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Vladimir Putin

Russian President Vladimir Putin has said that any sanctions threats directed at India would ultimately backfire, asserting that New Delhi has consistently acted in accordance with its national interests and is unlikely to change course under Prime Minister Narendra Modi’s leadership.

Speaking about India-Russia relations and New Delhi’s foreign policy approach, Putin praised India’s independent decision-making and emphasized that attempts to pressure the country over its ties with Moscow would not achieve the desired outcome. He suggested that any such measures would have negative consequences for those imposing them.

The Russian leader described India as a reliable partner and highlighted the strength of bilateral ties between the two countries. He also indicated that Russia does not view India’s growing engagement with other nations, including the United States, as a threat to its relationship with New Delhi.

Putin further praised India’s economic progress and reiterated confidence in the country’s ability to pursue policies based on its own priorities. His remarks come amid continuing global discussions over sanctions, geopolitical alignments and international partnerships.

The comments underscore Moscow’s efforts to reinforce its strategic partnership with India while highlighting Russia’s support for New Delhi’s independent foreign policy stance.

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UK Foreign Secretary Yvette Cooper visits India to strengthen bilateral partnership

UK Foreign Secretary Yvette Cooper held high-level meetings in New Delhi during her first official visit to India, underscoring efforts to deepen cooperation in trade, security, technology and regional stability.

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UK Foreign Secretary Yvette Cooper visited New Delhi for her first official trip to India since assuming office, holding key meetings with Prime Minister Narendra Modi and External Affairs Minister S. Jaishankar as both countries seek to deepen cooperation across trade, security and strategic sectors.

The visit comes at a significant time in India-UK relations, with both governments working toward the implementation of their recently concluded trade agreement while also expanding collaboration in areas such as technology, climate action, supply chains and regional security.

Focus on trade and strategic cooperation

During her engagements in New Delhi, Cooper discussed ways to strengthen the comprehensive strategic partnership between the two countries. Conversations also touched on accelerating the implementation of the India-UK trade agreement and enhancing economic cooperation.

Her visit followed recent discussions between Indian Commerce Minister Piyush Goyal and UK Business and Trade Secretary Peter Kyle regarding the rollout of the bilateral trade pact.

New initiatives announced

India and the UK also announced fresh cooperation initiatives during the visit, including the launch of a Critical Minerals Global Supply Chain Observatory aimed at strengthening collaboration on critical minerals and supply-chain resilience.

Officials described the initiative as an important step in expanding cooperation in emerging strategic sectors and supporting resilient global supply chains.

Addressing global challenges

Apart from bilateral issues, discussions covered wider global concerns, including regional stability, economic disruptions arising from international conflicts and maritime security. The visit reflects the growing importance both countries attach to their strategic partnership amid evolving geopolitical challenges.

India and the UK have increasingly broadened cooperation across defence, technology, innovation, clean energy and people-to-people ties, with both sides aiming to further strengthen engagement in the coming years.

Fact-check assessment

The core angle—Yvette Cooper’s first official visit to India, meetings with PM Modi and S. Jaishankar, focus on trade, security, strategic cooperation and the launch of new bilateral initiatives—is supported by multiple current reports and appears factually sound.

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Trump says India-US trade deal likely soon, calls PM Modi a good friend

Donald Trump has expressed confidence that India and the United States will soon finalize a trade agreement, while praising Prime Minister Narendra Modi and highlighting ongoing bilateral negotiations.

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Donald Trump statement

US President Donald Trump has expressed confidence that the United States and India will reach a trade agreement in the near future, even as discussions continue amid concerns over potential new tariffs. Trump also praised Prime Minister Narendra Modi, describing him as a good friend and highlighting the strong relationship between the two leaders.

Speaking to reporters at the White House, Trump said he expects the two countries to finalize a deal and pointed to his personal rapport with Prime Minister Modi. He said the relationship between Washington and New Delhi remains strong and that ongoing negotiations are moving toward an agreement.

The remarks come shortly after a US trade delegation concluded discussions in India on an interim bilateral trade arrangement. According to Indian officials, the talks were conducted in a cooperative atmosphere, with both sides reaffirming their commitment to a mutually beneficial agreement aimed at strengthening economic ties.

During the interaction, Trump also repeated his criticism of India’s past tariff policies, arguing that India had imposed high duties on American goods for many years. He claimed recent US trade measures were intended to address what he views as an imbalance in the trading relationship.

His comments come days after the US administration proposed additional tariffs on imports from India and several other economies under a separate trade investigation related to forced-labour concerns. The proposal remains under review and has become one of the issues running alongside broader trade negotiations between the two countries.

Despite the tariff dispute, both governments have continued negotiations. Recent statements from officials on both sides suggest that substantial progress has already been made on several aspects of the proposed agreement, with discussions focused on resolving the remaining issues.

The United States is one of India’s largest trading partners, and a bilateral agreement is expected to further expand trade and investment flows between the two countries. Trump’s latest remarks are being seen as a sign that both sides remain committed to finding common ground despite ongoing trade disagreements.

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