Financial Crime World

Japan’s Crusade against Financial Crimes: AML/CFT Measures in the Land of the Rising Sun

Japan, as a global economic powerhouse, has faced the brunt of financial crimes such as money laundering and terrorist financing. In response, the National Police Agency of Japan, through its Financial Intelligence Center (JAFIC), has introduced stringent Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) measures to safeguard its economy and adhere to international standards.

The Necessity of AML/CFT Measures

  • Money laundering: concealing illegal proceeds in legitimate assets
  • Global war on drugs served as a catalyst
  • UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (UN New Narcotics Convention)

UN New Narcotics Convention (1988)

  • Adopted required states to criminalize money laundering
  • Enable confiscation
  • Set the stage for international cooperation

The Evolution of AML/CFT Measures

The 40 Recommendations (1990)

  • Standardized framework for AML/CFT measures
  • International cooperation in tackling ML/TF

Expanding the Scope (Early 1990s)

  • FATF expanded definition of predicate offenses
    • Organized crime
    • Terrorism financing

Establishing Financial Intelligence Units (FIUs) (1998)

  • Enhancing the use of suspicious transaction reports for criminal investigations

Japan’s Commitment to AML/CFT Measures

  • “The Anti-Drug Special Provisions Law” (1992)

    • Criminalized money laundering connected to drug crimes
    • Established suspicious transaction reporting system

  • “Act on Punishment of Organized Crimes” (2000)

    • Expanded scope of predicate offenses
    • Designated Financial Services Agency as FIU

  • “Act on Punishment of Financing of Offenses of Public Intimidation” (2002)

    • Combat terrorism financing
    • Modified “Act on Punishment of Organized Crimes” to include terrorist financing as a predicate offense

Japan’s Robust AML/CFT Regime

  • Japan’s commitment to international efforts
  • Continuous improvement to counter evolving threats

Through relentless determination and consistent adherence to international standards, Japan’s AML/CFT regime remains a global leader in impeding financial crimes.