Japan’s Financial Watchdog Revamps Anti-Money Laundering Guidelines to Boost Effectiveness

The Japanese Financial Services Agency (FSA) has revised its “Frequently Asked Questions Regarding ‘Guidelines for Anti-Money Laundering and Combating the Financing of Terrorism’” to enhance the anti-money laundering and combating the financing of terrorism (AML/CFT) framework of financial institutions.

Background

The revised FAQs were first issued in March 2021 and last updated in August 2022. The aim is to provide greater clarity and guidance for financial institutions to effectively implement AML/CFT measures, thereby strengthening their defenses against money laundering and terrorist financing.

Motivation

The FSA’s move is part of its ongoing efforts to strengthen Japan’s AML/CFT regime, which has been criticized in the past for being too lax. The revisions are seen as a positive step towards aligning Japan with international standards and best practices.

Expert Opinion

However, experts have warned that more needs to be done to tackle money laundering and terrorist financing in Japan. “While the revision is welcome, it is only a first step,” said a financial expert. “Japan still has a long way to go to ensure its AML/CFT regime is robust and effective.”

Key Changes

The revised FAQs are now available on the FSA’s website, although they are only provisionally translated into English. The agency has also set up a dedicated hotline for financial institutions seeking guidance on implementing the revised guidelines.

Contact Information

• Strategy Development and Management Bureau AML/CT Policy Office
  • Phone: +81-(0)3-3506-6000

By revising its anti-money laundering guidelines, the FSA aims to boost the effectiveness of Japan’s AML/CFT framework. While this is a positive step, experts caution that more needs to be done to tackle money laundering and terrorist financing in Japan.