Japan Fails to Meet UNSCR 1373 Requirements, Makes Progress in Follow-Up Report

Introduction

In its second Enhanced Follow-Up Report (EFUR), Japan acknowledged shortcomings in its implementation of United Nations Security Council Resolution (UNSCR) 1373 and made progress in addressing identified gaps.

Shortcomings in Implementation

According to the report, Japan did not meet certain requirements at the time of its first EFUR. Specifically:

• It failed to demonstrate a prompt determination by its Inter-Ministerial Committee (IAM) when receiving requests for designating targets for sanctions from other countries.
• It lacked an evidentiary standard of proof for designation.

Progress in Addressing Gaps

To address these gaps, Japan has taken the following steps:

• Updated its Rules of Procedure
• Clarified the application of an evidentiary standard of proof
• Took a more proactive approach in implementing targeted financial sanctions (TFS) related to terrorist financing (TF)
• Implemented TFS without delay within 24 hours as required by FATF Recommendation R.6

Remaining Challenges

However, Japan still lags behind in:

• Extending asset-freezing obligations to all funds or other assets owned or controlled by designated persons or entities
• Clarifying the definition of “payments” to ensure compliance with FATF standards

Conclusion

While Japan has made strides in addressing identified gaps in its implementation of UNSCR 1373, more work remains to be done to fully comply with international requirements.