Financial Crime World

Understanding Anti-Money Laundering (AML) Regulations in Japan

Introduction

Japan has strict regulations in place to prevent money laundering and terrorist financing. Specified business operators must comply with these regulations, which include customer identification and information requirements, notification procedures, and reporting of suspicious transactions.

Key Requirements for Specified Business Operators

  • Customer Identification and Information: Specified business operators must obtain customer identification and other relevant information when conducting transactions.
  • Notification Requirements: When suspicious transactions or foreign exchange transactions occur, specified business operators must notify the competent supervisory agency (e.g., the Financial Services Agency).
  • Confirmation at the Time of Transactions: Specified business operators must establish a system for confirmation at the time of transactions to ensure compliance with AML rules.
  • Different Requirements for Different Institutions: Various regulations set forth by the AML rules are selectively applied depending on the type of specified business operator.

Supervisory Authorities and Reporting Requirements

  • Supervisory Authority: The supervisory authority differs depending on the type of specified business operator (e.g., Financial Services Agency, Minister of Economy, Trade, and Industry, or Casino Management Commission).
  • Reporting Suspicious Activity: Specified business operators must report suspicious transactions to the competent supervisory agency.
  • Factors Triggering Reporting: Suspicious transactions include those where property received is suspected to be proceeds from crime, or when a customer conceals proceeds from crime in relation to a certain transaction.

Confidentiality Requirements

  • Prohibition on Divulging Information: Specified business operators are prohibited from divulging that they intend to notify or have notified suspicious transactions to customers or related parties.
  • Administrative Sanctions and Criminal Penalties: Violating this obligation can result in administrative sanctions or criminal penalties.

Consulting Experts

The questions were answered by Ryoko Yamaguchi, Masayuki Atsumi, and Yuta Kanai from Miura & Partners. If you have any further questions or concerns regarding AML regulations in Japan, it is recommended to consult with a qualified expert.