Comprehensive Guide to Anti-Money Laundering (AML) Laws and Regulations in Japan

Notification and Record-Keeping Requirements

In Japan, financial institutions are subject to specific requirements when conducting foreign exchange transactions. These include:

Notification of customer identification data: Receiving institutions must be notified of certain customer identification data when conducting exchange transactions related to payment to or from abroad.
Record-keeping requirements: Covered institutions and persons are required to maintain records for at least five years, which may include:
- Customer information
- Transaction details
- Other relevant documents

Due Diligence Efforts

Institutions must conduct due diligence on their customers, including verifying the identity of beneficial owners in some cases.

There is an obligation to report suspicious transactions to a competent administrative authority, such as:

The Financial Services Agency
The Ministry of Economy, Trade and Industry

Privacy Laws and AML Regulations

The Act on the Protection of Personal Information does not affect the record-keeping requirements, due diligence efforts, and information sharing prescribed in the AML laws.

Resolutions and Sanctions

There is no criminal sanction for breaching AML laws, but administrative measures can be taken by:

The National Public Safety Commission
The National Police Agency
Competent administrative authorities

Limitation Periods for AML Enforcement

There is no limitation period for administrative measures regarding AML violations.

Extraterritoriality of AML Laws

Japan’s AML laws apply to foreign institutions and persons and their subsidiaries that fall within the category of covered institutions and persons under the relevant laws.

Civil Claims and Private Right of Action

There is no specific provision regarding civil claims or a private right of action against money launderers and covered institutions and persons in breach of the AML laws.