Japan Urged to Improve AML/CFT Framework

A recent review by international experts has highlighted areas where Japan needs to strengthen its measures to combat money laundering and terrorist financing. The Financial Action Task Force (FATF) and the Asia-Pacific Group on Money Laundering assessed Japan’s anti-money laundering and counter-terrorist financing (AML/CFT) system, citing both positive results and room for improvement.

Positive Progress

According to the Mutual Evaluation Report, Japan has been effective in:

• Collecting and using financial intelligence to investigate and prosecute money laundering and terrorist financing cases
• Demonstrating strong cooperation with international partners

Areas for Improvement

However, experts have identified several key areas where Japan needs to increase its efforts, including:

• Improving the confiscation of criminal proceeds
• Tackling the risks associated with organised crime groups such as the Boryokudan
• Preventing the unwitting facilitation of sanctions evasion

Additional Recommendations

Japan has been urged to:

• Fully implement measures to prevent the abuse of virtual assets and their service providers
• Improve customer due diligence requirements for financial and non-financial institutions
• Provide better access to beneficial ownership information to prevent the misuse of legal persons and arrangements

Terrorist Financing Risk

While Japan’s terrorist financing risk is considered low, authorities have been urged to remain vigilant and focus on complex large-scale cases involving fraud and drug-related crimes.

Conclusion

Overall, while Japan has made significant progress in combatting money laundering and terrorist financing, there is still work to be done to strengthen its AML/CFT framework. By addressing these areas for improvement, Japan can further enhance its efforts to prevent and detect money laundering and terrorist financing activities.