Financial Crime World

Japan Combats Financial Crime, But Risks Remain

Introduction

Financial crime continues to pose a significant threat in Japan. The country has been working tirelessly to combat money laundering, terrorist financing, corruption, and fraud despite progress made in this area. This article will delve into the current state of financial crime in Japan and provide insights on how institutions are navigating these risks.

The Rise of Money Laundering Cases

According to recent reports, money laundering cases have increased by 40% in 2018, with cryptocurrencies being a significant source of this increase. The COVID-19 pandemic has further impacted businesses worldwide, including Japan, resulting in more non-face-to-face transactions and changing the landscape of money laundering and terrorist financing (ML/TF) risks.

AML Laws and Regulations in Japan

Japan has several laws and regulations in place to combat financial crime, including:

  • Act on Special Provisions for the Narcotics and Psychotropics Control Act, etc, and Other Matters for the Prevention of Activities Encouraging Illicit Conduct and Other Activities Involving Controlled Substances through International Cooperation (Act No. 94 of 1991)
  • Act on Punishment of Organised Crimes and Control of Crime Proceeds (Act No. 136 of 1999)
  • Act on Prevention of Transfer of Criminal Proceeds (Act No. 22 of 2007)

Public prosecutors have the authority to exercise discretion when determining whether to bring charges against an individual accused of money laundering. If a suspect is formally charged, the court assesses the available evidence and makes a verdict regarding the defendant’s guilt.

Japan’s FATF Status

The Financial Action Task Force (FATF) released its 4th round of Mutual Evaluation Report (MER) concerning Japan’s efforts in combating financial crime. The report highlights Japan’s improvements compared to its 3rd MER in 2008, but also points out areas that require more attention.

Anti-Money Laundering Solutions for Japan

Maintaining a proactive stance on AML regulations is crucial for Japan due to its significant influence in finance. Sanction Scanner provides institutions with the expertise needed to fulfill their AML obligations while gaining insightful knowledge of the dynamic AML environment unique to Japan.

By understanding the current state of financial crime in Japan and the measures being taken to combat it, institutions can better navigate these risks and maintain a safe and secure financial environment for all stakeholders.