Financial Crime World

Japan Takes Action Against Financing of Weapons of Mass Destruction and Corruption

Strengthening Anti-Money Laundering and Combating the Financing of Terrorism Regime

TOKYO - Japan has made significant strides in combating the financing of weapons of mass destruction (WMDs) and corruption, with a series of laws and regulations aimed at preventing the misuse of financial systems.

Key Developments

  • 1992: Anti-Drug Special Provisions Law - Criminalized money laundering activities connected to drug crimes and established a suspicious transaction reporting system for financial institutions.
  • 2000: Act on Punishment of Organized Crimes - Extended the scope of predicate offenses for money laundering and designated the Financial Services Agency as the country’s Financial Intelligence Unit (FIU).
  • 2002: Act on Punishment of Financing of Offences of Public Intimidation - Implemented the International Convention for the Suppression of the Financing of Terrorism, included terrorist financing as a predicate offense, and required financial institutions to report suspicious transactions related to assets suspected of being used for terrorism.
  • 2007: Act on Prevention of Transfer of Criminal Proceeds - Extended the scope of business operators required to implement customer identification and reporting requirements to include non-financial businesses and professions.

Recent Developments

  • 2011: Amendment to Act on Prevention of Transfer of Criminal Proceeds - Strengthened customer due diligence requirements and addressed concerns related to the use of call forwarding services in criminal activities.
  • 2018: Disclosure of Beneficial Ownership Information - Required companies listed on the Tokyo Stock Exchange to disclose their beneficial ownership information, aiming to increase transparency and reduce the risk of corruption.

Conclusion

Japan’s efforts to combat the financing of WMDs and corruption demonstrate its commitment to preventing the misuse of financial systems and promoting international cooperation in this area. The country’s AML/CFT regime is designed to effectively distribute limited resources and address emerging threats, including the financing of terrorism and other serious crimes.