Financial Crime World

Offences of Public Intimidation (TF Act) - A Major Crackdown on Terrorist Financing

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In a bid to curb the spread of terrorist financing, Japan has introduced the Offences of Public Intimidation (TF Act), a law that criminalizes the collection and provision of funds for terrorist activities. The legislation is aimed at disrupting the financial networks of terror organizations and preventing them from using illegal proceeds to fund their operations.

Risk-Based Approach

The Japanese government has adopted a risk-based approach to combat money laundering and terrorist financing. This involves identifying high-risk transactions and individuals, and taking measures to prevent them from being used for illicit purposes. The National Public Safety Commission publishes the National Risk Assessment-Follow-up Report (NRA-FUR), which assesses the ML/TF risks associated with various business operators.

Key Takeaways:

  • Identifying high-risk transactions and individuals
  • Preventing use of illegal proceeds to fund criminal organizations

Financial Institutions

Financial institutions (FIs) play a crucial role in preventing money laundering and terrorist financing. They are required to implement risk reduction measures, including customer due diligence and reporting of suspicious transactions. The Financial Services Agency provides guidelines for anti-money laundering and combating the financing of terrorism (AML/CFT).

Key Takeaways:

  • Implementing risk reduction measures
  • Reporting suspicious transactions

Designated Non-Financial Businesses and Professions

Designated non-financial businesses and professions (DNFBPs) are also subject to AML/CFT regulations. These include real estate brokers, dealers in precious metals and stones, postal receiving service providers, and other business operators. The government has identified risks associated with these industries and is taking measures to prevent their use for illegal purposes.

Key Takeaways:

  • Identifying high-risk DNFBPs
  • Preventing misuse of companies

Non-Profit Organizations

The FATF requires that countries apply CFT measures to non-profit organizations (NPOs) that are vulnerable to misuse for terrorist financing. Japan’s CFT measures target not only corporations engaging in specified non-profit activities but also public interest corporations, social welfare corporations, and religious corporations.

Key Takeaways:

  • Applying CFT measures to NPOs
  • Preventing misuse of companies

Beneficial Ownership

To prevent the misuse of companies, Japan has introduced a system for reporting beneficial ownership information. This involves identifying the individuals who ultimately control a company and reporting this information to the relevant authorities.

Key Takeaways:

  • Reporting beneficial ownership information
  • Identifying ultimate controllers of companies

Utilization of Financial Intelligence Unit

Japan’s Financial Intelligence Unit (FIU), the Japan Financial Intelligence Center (JAFIC), collects and analyzes suspicious transaction reports from FIs and disseminates analysis results to law enforcement agencies. This helps to support the government’s AML/CFT measures and prevent illegal money transfers.

Key Takeaways:

  • Collecting and analyzing suspicious transaction reports
  • Disseminating analysis results to law enforcement agencies

Enforcement and Asset Freezing

The Japanese government is taking a tough stance on money laundering and terrorist financing, with investigations, prosecutions, and asset freezing measures in place to combat these crimes. The Strategy to Make Japan the Safest Country in the World calls for using relevant laws to punish ML/TF offenders and prevent illegal proceeds from being used to fund criminal organizations.

Key Takeaways:

  • Investigations, prosecutions, and asset freezing measures
  • Punishing ML/TF offenders

In conclusion, Japan’s Offences of Public Intimidation (TF Act) is a significant step towards combating terrorist financing and preventing the misuse of companies for illegal purposes. The country’s risk-based approach, financial intelligence unit, and enforcement measures are all designed to disrupt the financial networks of terror organizations and keep Japan safe from the threat of terrorism.