Financial Crime World

Japan’s Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) Measures

Legislation and Framework

Japan has implemented various laws and regulations to combat money laundering, including the Anti-Money Laundering Act. The Financial Services Agency (FSA) is responsible for enforcing these laws and regulations.

  • Key Laws and Regulations:
    • AML Act
    • Other relevant laws and regulations

Obliged Entities

Obliged entities, such as banks, financial institutions, and other organizations, are required to implement AML/CFT measures. These entities must have governance arrangements in place to prevent money laundering and terrorist financing.

  • Types of Obliged Entities:
    • Banks
    • Financial institutions
    • Other organizations

Transaction Monitoring

Financial institutions monitor transactions to detect suspicious activities and report them to regulatory authorities. The FSA has implemented automated systems for monitoring deposit account transactions.

  • Transaction Monitoring Systems:
    • Automated systems for monitoring deposit account transactions
    • Suspicious activity reporting (SAR) mechanisms

Enforcement

Enforcement actions against obliged entities include reporting orders and business improvement orders. As of 2021, the FSA has strengthened inspections focused on AML/CFT measures.

  • Types of Enforcement Actions:
    • Reporting orders
    • Business improvement orders
    • Strengthened inspections

International Cooperation

Japan is a member of the Financial Action Task Force (FATF) and has implemented FATF recommendations. Japan’s major banks, such as MUFG, are also members of the Wolfsberg Group.

  • International Partnerships:
    • Financial Action Task Force (FATF)
    • Wolfsberg Group
    • Other international organizations

Other Laws and Regulations

The Act on the Protection of Personal Information (APPI) regulates the handling of personal data. The Whistleblower Protection Act protects employees who report money laundering activities.

  • Key Other Laws and Regulations:
    • Act on the Protection of Personal Information (APPI)
    • Whistleblower Protection Act