Financial Crime World

Japan Fails to Meet UN Sanctions Standards, But Makes Progress in Some Areas

In its second enhanced follow-up report, Japan has been criticized by international experts for failing to fully meet several United Nations (UN) sanctions standards. However, the country has made significant progress in addressing some of the identified gaps.

Key Areas of Concern

According to the report, Japan was found to be lacking in several key areas, including:

  • Designation of Persons and Entities: Japan did not have a clear process for identifying targets for designation under UN Security Council Resolution 1373. Additionally, it did not demonstrate an evidentiary standard of proof for designating individuals or entities.
  • Sufficient Information Provision: Japan was criticized for failing to provide sufficient information to support designation requests to other countries and international organizations.
  • Asset Freezing: The country also did not fully meet the requirement of freezing assets without delay and with minimal prior notice.

Progress in Implementing Targeted Financial Sanctions

However, Japan has made significant progress in implementing targeted financial sanctions (TFS) related to terrorism financing. Specifically:

  • Administrative Procedures: Japan has revised its administrative procedures to implement TFS within 24 hours.
  • Procedural Streamlining: The country abolished a procedural step that required coordination among relevant government divisions and other ministries and agencies.

Efforts to Ensure Effectiveness of Asset-Freezing Measures

The report also highlights Japan’s efforts to ensure the effectiveness of asset-freezing measures, including:

  • Notifications to Financial Institutions: Notifications were sent to financial institutions to inform them of designated individuals or entities.
  • Public Notices: Public notices were published in the Official Gazette to inform the public of the designations.

Conclusion

While Japan still has work to do to fully meet UN sanctions standards, its progress in addressing some of the identified gaps is welcome. The country must continue to take concrete steps to improve its implementation of UN sanctions and international anti-money laundering and combating the financing of terrorism (AML/CFT) standards.