Financial Crime World

Japan Toughens Measures Against Financing of Offences of Public Intimidation

TOKYO - Japan has strengthened its laws and regulations to combat the growing menace of terrorist financing, with a focus on preventing the collection and provision of funds for terrorist activities.

Punishment for Terrorist Financing

The Japanese government has introduced the Financing to Offences of Public Intimidation (TF) Act, which criminalizes the collection and provision of funds for terrorist activities. The law provides for severe punishment, including imprisonment and fines, for individuals and organizations found guilty of financing terrorism.

Risk-Based Approach

To identify and mitigate risks associated with money laundering and terrorist financing, Japan has adopted a risk-based approach. The National Public Safety Commission prepares and publishes the National Risk Assessment-Follow-up Report (NRA-FUR), which assesses ML/TF risks for each category of transactions by specified business operators.

Financial Institutions Under Scrutiny

Financial institutions (FIs) in Japan are required to take various risk reduction measures, including:

  • Customer due diligence
  • Reporting of suspicious transactions

The government supervises FIs to ensure compliance with anti-money laundering and combating the financing of terrorism (AML/CFT) regulations.

Designated Non-Financial Businesses and Professions

Designated non-financial businesses and professions (DNFBPs), such as:

  • Real estate brokers
  • Lawyers
  • Accountants

are also subject to AML/CFT regulations. The government has identified risks associated with these industries and formulated guidelines for their implementation.

Non-Profit Organizations Under the Spotlight

The FATF requires that CFT measures be applied to non-profit organizations (NPOs) vulnerable to misuse for terrorist finance. Japan’s CFT measures target not only corporations engaging in specified non-profit activities but also those suspected of funding terrorism.

Utilization of Financial Intelligence Units

Japan has established a Financial Intelligence Unit (FIU), the Japan Financial Intelligence Center (JAFIC), which:

  • Collects and analyzes information on suspicious transactions
  • Disseminates information to law enforcement agencies
  • Has signed agreements with FIUs in over 100 foreign countries to facilitate international cooperation against money laundering and terrorist financing

Enforcement and Asset Freezing

The Japanese government is committed to enforcing its AML/CFT regulations and freezing assets linked to terrorist organizations. The country has implemented measures to prevent the use of illegal funds for criminal activities, including:

  • Organized crime
  • Terrorism

Conclusion

Japan’s new laws and regulations aim to disrupt the financial networks used by terrorists and organized crime groups, making it more difficult for them to fund their illegal activities. The country’s strengthened measures against terrorist financing demonstrate its commitment to combating global terrorism and protecting its citizens from harm.