Financial Crime World

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Japan’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Policies

Overview

Japan has a comprehensive risk-based approach to financial regulations, which includes anti-money laundering (AML) and combating the financing of terrorism (CFT) policies. The National Public Safety Commission publishes the National Risk Assessment-Follow-up Report (NRA-FUR), which assesses money laundering/terrorist financing risks for each category of transactions by specified business operators.

Key Components of Japan’s AML/CFT Regime

Financial Institutions (FIs)

  • FIs, including banks and other financial institutions, are required to take various risk reduction measures under the AML/CFT regime.
  • This includes customer due diligence and reporting suspicious transactions.

Designated Non-Financial Businesses and Professions (DNFBPs)

  • DNFBPs, such as real estate brokers and lawyers, are also subject to AML/CFT regulations.

Beneficial Ownership

  • Japan has implemented measures to increase transparency in beneficial ownership of legal persons.
  • FIs and other specified business operators must verify information about beneficial owners at the time of transactions.

Non-Profit Organizations (NPOs)

  • NPOs are also subject to CFT measures due to their vulnerability to misuse for terrorist financing.

Supporting AML/CFT Measures

Financial Intelligence Unit (FIU)

  • Japan’s FIU, JAFIC, collects, organizes, and analyzes information reported by FIs and other specified business operators to support the government’s AML/CFT measures.

Enforcement and Asset Freezing

  • Strict measures are taken against ML/TF to prevent illegal money transfers.
  • The Strategy to Make Japan the Safest Country in the World calls for using relevant laws to appropriately implement punishments for ML and ensure the thorough deprivation of criminal proceeds.

Asset Freezing Measures

  • Based on United Nations Security Council resolutions, Japan has implemented asset freezing measures to prevent funds and other assets from being used for or flowing to terrorist organizations.