Banking: Australian role in currency printing scandal

The RBA is not hiding from the allegations: indeed, it has said clearly that it is taking them "very seriously."

Immediately the allegations became public, the RBA issued a statement on 25 May. It said "The Reserve Bank takes very seriously the allegations that have been raised in relation to Securency, a company of which the Bank is a shareholder. It condemns corrupt behaviour of any kind. The Bank fully endorses the immediate action taken by the Board of Securency last year to refer the allegations to the Australian Federal Police, and to commission an external review of Securency’s policies and procedures in relation to the use of agents. The Bank supports the Board of Securency in its decision to implement all the recommendations of that review."

The same day, the board of the company made its own statement: "In recent days, The Age and the ABC have reiterated allegations first made by The Age a year ago. These were that agents or staff of Securency may have engaged in corrupt behaviour such as paying kickbacks to foreign government officials. The Board of Securency does not condone corrupt behaviour of any kind and the company had policies and procedures in place prohibiting such behaviour. Accordingly, when the Board of Securency first became aware of these allegations a year ago, it immediately referred them to the Australian Federal Police, in order that they be investigated fully. All information that the company holds in relation to these matters is available to the Australian Federal Police. The Board of Securency also engaged an external accounting firm to undertake a thorough independent review of the company’s policies and procedures for the use of agents. The Board of Securency has since released the findings of that review and has committed to the full implementation of the twelve recommendations contained in it."

Both Securency and the RBA say that they will not make further comment and that any evidence should be referred to the Australian Federal Police (AFP).

But it has since come to light that the AFP had been made aware of the allegations even earlier but did not pursue them with particular alacrity.

The allegations are very disturbing : it is said that Securency and its sister company, Note Printing Australia, paid more than AUD50 million to secure various currency printing deals. The allegations are also under investigation - or at least consideration - by the UK's Serious Fraud Office - in part because some of the brokers who put deals together are based in the UK.

Countries named in the allegations are having apoplexy: Malaysia's Central Bank says that it has clear and transparent processes and that there are no signs that anything untoward happened. Malaysia was one of the first countries to follow Australia's lead into polymer-coated notes with its five ringgit note.

But the allegations relate to other countries including Vietnam, Indonesia, Nigeria, Nepal, South Africa and Cambodia.

The allegations are especially damaging to the reputation of Australia because the Australian government has for some years been particularly active in pushing its agenda for a specific design of company, governance and counter-money laundering laws across the South East Asia region and it houses and largely directs and funds the Asia Pacific Group, a large international grouping designed to combat money laundering and terrorist financing. AusAid is an Australian sponsored organisation that puts staff into countries under "technical assistance programmes" designed to aid countries combat corruption and has claimed significant success in, for example, Indonesia.