The Federal Court heard Westpac's failure jeopardised law enforcement's ability to fight crime.

"Westpac’s failures resulted in significantly less transparency in the flow of funds in and out of Australia,"Ms Harris said."They compromised the ability of law enforcement agencies to deal with and prevent unlawful activity,and they undermined the taxation system by denying important information to the ATO[Australian Taxation Office]."

Ms Harris cleared the bank's board of any wrongdoing but said management oversight of AML compliance had been inadequate.

"There wasn’t any deliberate intention to contravene the[anti-money laundering] Act. They did take steps to ensure Westpac complied,"Ms Harris said."But despite those steps,that oversight by[the] board and senior management was deficient in a number of respects."

The final hearing in the landmark case against Westpac comes afterThe AgeandThe Sydney Morning Heraldrevealedthe lender maintained a correspondent banking relationship until 2018 with an offshore bank,Euro Pacific,that is now the subject of a major global tax evasion and money laundering probe. The investigation prompted senior academics from theUniversity of Sydney and University of Melbourne to call for reform,including criminal prosecution for non-compliance and greater information-sharing between institutions.

Justice Beach said $300 million of the $1.3 billion fine was attributed to Westpac's failure to conduct proper screening of its international bank partners and he would have insisted a higher penalty if this breach was taken in isolation."Contamination from the suspect practices of foreign correspondent banks and their customers must be avoided."

Westpac's lawyer John Sheahan,QC,reiterated the bank's"profound expression of regret"before pointing to the ongoing collaboration between Westpac and AUSTRAC.

"The bank also appreciates its failures were serious and they call for a serious penalty,"Mr Sheahan said.