Financial Crime World

FATF Shifts Focus to Non-Financial Sectors in Money Laundering Fight

The Financial Action Task Force (FATF) has made a significant shift by placing greater emphasis on non-financial sectors in its efforts to combat money laundering. The FATF’s revised “40 Recommendations” now require operators beyond traditional financial institutions to implement anti-money laundering measures, including customer identification and reporting of suspicious transactions.

Japan’s Anti-Money Laundering Regime Evolves

In response to the FATF’s new recommendations, Japan has also revised its anti-money laundering regime. The country’s laws and regulations have undergone several changes since 1992, when Japan first implemented anti-money laundering measures in accordance with international standards.

Key Developments in Japan’s Anti-Money Laundering Regime

Enforcement of the Anti-Drug Special Provisions Law (1992)

  • Criminalized money laundering activities connected to drug crimes
  • Established a suspicious transaction reporting system for financial institutions

Enforcement of the Act on Punishment of Organized Crimes (2000)

  • Extended the scope of predicate offenses for money laundering
  • Included other serious crimes in the suspicious transaction reports regime
  • Designated the Financial Supervisory Agency as Japan’s Financial Intelligence Unit (FIU)

Enforcement of the Act on Punishment of Financing of Offences of Public Intimidation (2002)

  • Implemented the International Convention for the Suppression of the Financing of Terrorism
  • Included terrorist financing offenses in predicate offenses

Revision of the Customer Identification Act (2004)

  • Revised to address frequent abuse of bank accounts under other or fictitious names
  • Title changed to “the Act on Confirmation of Customers Identification by Financial Institutions etc. and Prevention of Unauthorized Use of Deposit Account etc.”

Enforcement of the Act on Prevention of Transfer of Criminal Proceeds (2007)

  • Implemented the FATF’s revised recommendations, extending the scope of business operators required to implement customer identification and reporting suspicious transactions

Amendment of the Act on Prevention of Transfer of Criminal Proceeds (2011)

  • Japan amended its anti-money laundering laws in response to flaws pointed out by the FATF’s Third Mutual Evaluation

Ongoing Efforts

Despite progress, Japan still faces challenges in combating money laundering. The country has seen a high level of damage from “Furikome Fraud,” which involves the use of call forwarding services and illegal transfers of savings passbooks.

To address these issues, Japan has continued to revise its anti-money laundering laws and regulations. The Japanese government has also:

  • Established an Action Plan for Prevention of Terrorism
  • Conducted discussions on customer due diligence to improve measures against money laundering
  • Transferred the country’s FIU from the Financial Services Agency to the National Police Agency in 2008

Conclusion

As Japan continues to evolve its anti-money laundering regime, it is clear that a collaborative effort between government agencies, financial institutions, and business operators is essential in the fight against money laundering.