Financial Crime World

Since you didn’t provide the rest of the text, I’ll create an article based on the information provided and my understanding of anti-money laundering (AML) and combating the financing of terrorism (CFT) measures in Japan. Here’s the article:

Japan’s Anti-Money Laundering and Combating the Financing of Terrorism Measures

Introduction

Japan has implemented various regulations and guidelines to prevent money laundering and terrorist financing. This article provides an overview of AML/CFT measures in Japan, highlighting their importance and the role of regulatory authorities.

Regulatory Framework

  • Financial Services Agency (FSA): The FSA is responsible for overseeing financial institutions and ensuring they comply with AML/CFT regulations.
  • Risk-Based Approach: Obliged entities must implement a risk-based approach to identify, assess, and mitigate money laundering and terrorist financing risks.
  • Customer Due Diligence: Financial institutions must conduct customer due diligence, including verifying the identity of customers and understanding their business activities.

Implementation of AML/CFT Measures

  • Obligated Entities: Financial institutions, such as banks, securities companies, and insurance companies, are required to implement AML/CFT measures.
  • Transaction Monitoring: Obliged entities must monitor transactions for suspicious activity and report them to the FSA.
  • Reporting Suspicious Transactions: Obliged entities must report suspicious transactions to the FSA.

Governance Arrangements

  • Regulatory Authorities: Regulatory authorities, such as the FSA, request that financial institutions complete their development of AML/CFT measures by the end of March 2024.
  • Enforcement: Enforcement against obliged entities is carried out through reporting orders and business improvement orders.

International Cooperation

  • Financial Action Task Force (FATF): Japan has been a member of the FATF since its establishment in 1990 and has developed its legal framework for AML/CFT based on FATF recommendations.
  • Wolfsberg Group: Major banks, such as Mitsubishi UFJ Financial Group (MUFG), are members of international organizations like the Wolfsberg Group.

Other Relevant Laws

  • Act on the Protection of Personal Information: This law affects the response to money laundering and requires financial institutions to protect personal information.
  • Whistleblower Protection Act: This law provides protection for whistleblowers who report suspicious activity related to money laundering or terrorist financing.

Outlook

  • Regulatory Supervision: Regulatory authorities will continue to closely supervise obliged entities, and those with inadequate governance arrangements may be subject to administrative penalties.
  • FATF Mutual Examinations: The FATF plans to start the fifth round of mutual examinations from 2024, which will be carried out in parallel with the follow-up to the fourth round of examinations.