Financial Crime World

Japan Fights Financial Crime, Despite Rising Money Laundering Risks

Introduction

Despite years of efforts to combat financial crime, Japan still faces significant risks of money laundering, terrorist financing, corruption, and fraud. The rapid expansion of the crypto sector has created vulnerabilities that have yet to be fully regulated.

Increasing Number of Money Laundering Cases

The number of money laundering cases increased by 40% in 2018, with cryptocurrencies being a major source of this growth. According to recent reports, there were 530,150 reports of suspicious transactions in 2021, with banks accounting for the majority of these cases.

Regulations and Laws in Place

Japan has implemented various Anti-Money Laundering (AML) laws and regulations to combat financial crime, including:

  • Act on Special Provisions for the Narcotics and Psychotropics Control Act: This act gives public prosecutors the authority to exercise discretion when determining whether to bring charges against individuals accused of money laundering.
  • Act on Punishment of Organised Crimes and Control of Crime Proceeds: This act provides the framework for punishing organized crime and controlling the proceeds of crime.
  • Act on Prevention of Transfer of Criminal Proceeds: This act requires financial institutions to report suspicious transactions and take steps to prevent the transfer of criminal proceeds.

Efforts to Enhance AML Regulations

The Japanese government has unveiled a “National AML/CFT/CPF Action Plan” for the next three years, which aims to implement necessary legislative actions effectively. This plan requires collaboration between the public and private sectors to enhance the supervision of financial institutions and designated non-financial businesses and professions.

Maintaining a Proactive Stance on AML Regulations

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