Financial Crime World

Japan’s Anti-Money Laundering Efforts Face Scrutiny

TOKYO, JAPAN - Japan’s efforts to combat money laundering and terrorist financing have been assessed by the Financial Action Task Force (FATF), an intergovernmental organization that sets global standards for anti-money laundering and combating the financing of terrorism.

Assessing Risk and Applying a Risk-Based Approach

  • Japan received a rating of “largely compliant” (LC) for assessing risk and applying a risk-based approach to anti-money laundering measures.
  • This indicates that Japan has made significant progress in this area, but there is room for improvement.

National Cooperation and Coordination

  • The country also received an LC rating for national cooperation and coordination, highlighting its efforts to share information and coordinate with other government agencies and international partners to combat money laundering and terrorist financing.

Money Laundering Offence

  • Japan’s laws and regulations related to money laundering offences were found to be partially compliant (PC), indicating that while the country has taken steps to criminalize money laundering, there are still gaps in its legislation.

Confiscation and Provisional Measures

  • The FATF report noted that Japan’s confiscation and provisional measures for anti-money laundering purposes were also PC, suggesting that the country needs to strengthen its laws and regulations in this area.

Terrorist Financing Offence

  • Japan received an LC rating for its terrorist financing offence, indicating that it has made progress in criminalizing terrorist financing, but there is still room for improvement.

Financial Institution Secrecy Laws

  • The country’s financial institution secrecy laws were found to be compliant (C), highlighting Japan’s commitment to transparency and accountability in the financial sector.

Customer Due Diligence

  • Japan received an LC rating for customer due diligence requirements, indicating that it has made significant progress in implementing measures to prevent money laundering through customer due diligence.

Record Keeping

  • The country also received an LC rating for record keeping requirements, highlighting its efforts to maintain accurate and detailed records of financial transactions.

Overall, Japan’s anti-money laundering efforts have shown significant progress, but the country still faces challenges in certain areas. The FATF report highlights areas where Japan needs to strengthen its laws and regulations to prevent money laundering and terrorist financing.