Financial Crime Sentences in Japan Reach Record High: What You Need to Know
Overview
In 2022, financial institutions in Japan reported a staggering 583,317 transactions suspected of money laundering, marking a record high increase of 53,167 cases from the previous year. This trend highlights the growing threat of financial crime in Japan and underscores the need for businesses and individuals to be aware of the risks involved.
What is Money Laundering?
Money laundering is the act of disguising criminal proceeds so that their source and true ownership are obscured, with the aim of evading detection by investigative authorities. According to Japan’s National Police Agency, money laundering involves three stages: placement, layering, and integration.
Placement
The funds may be diverted to finance the activities, ongoing operations, and growth of criminal groups.
Layering
This stage involves transferring the funds through multiple transactions to obscure their origin and ownership.
Integration
The final stage involves integrating the laundered funds into the legitimate financial system, making them difficult to distinguish from lawfully obtained funds.
Does Money Laundering Constitute a Criminal Act?
Yes, money laundering is prohibited by law in Japan. Enforcement is carried out under laws such as:
- Act on Punishment of Organized Crimes: This law provides for the punishment of organized crimes, including money laundering.
- Anti-Drug Special Provisions Law: This law aims to prevent and suppress drug-related crimes, including money laundering.
Prevention measures are implemented under laws including:
- Act on Prevention of Transfer of Criminal Proceeds: This law requires financial institutions to report suspicious transactions and verify customer information.
Examples of Money Laundering in Japan
Money laundering can take various forms, but domestic exchange transactions and cash transactions are the most commonly misused. Internationally, money laundering using crypto assets has also become a serious problem. Notable cases from 2022 include:
- Impersonating someone to sell electronic money obtained through sophisticated fraud schemes: Perpetrators were charged with “concealment of criminal proceeds.”
- Concealing assets by using a crypto address belonging to an unidentified person: This case involved cross-border concealment of funds.
- Concealing assets by using a crypto address belonging to an unidentified person: This case involved cross-border concealment of funds.
Measures to Prevent Money Laundering
To combat financial crime, Japan has enacted laws and established guidelines for financial institutions. Financial institutions regularly send users documents such as:
- Confirmation of Purpose of Transaction: This document is used to verify the purpose of a transaction.
- Confirmation of Customer Information: This document is used to verify customer information.
- Confirmation of Delivery Details: This document is used to verify delivery details.
Ignoring customer information verification requests from banks can result in refused transactions or restricted access to funds. The government is urging people to respond within the given deadline when they receive such documents.
Disclaimer
The content in this article is for general information and education purposes only, and should not be construed as legal or tax advice.