Financial Crime World

Japan’s Anti-Money Laundering (AML) Laws and Regulations

General Provisions

Overview of AML Laws in Japan

The Act on Prevention of Transfer of Criminal Proceeds is the primary legislation governing anti-money laundering efforts in Japan. This act requires covered institutions and persons to conduct risk-based analyses, verify customer identification data, and report suspicious transactions.

Covered Institutions

  • Banks
  • Securities companies
  • Insurance companies
  • Other financial institutions

Due Diligence Efforts

Verifying Customer Identity

Institutions must verify the identity of customers, including:

  • Name
  • Date of birth
  • Address
  • Occupation

Purpose and Nature of Business Relationship

Institutions must also obtain information about the purpose and nature of the business relationship with the customer.

Record-Keeping Requirements

Maintaining Customer Records

Institutions are required to maintain records of customer identification data for at least five years. They must also report suspicious transactions to the Financial Services Agency or other competent authorities.

Privacy Laws

Act on Protection of Personal Information

The Act on the Protection of Personal Information does not affect record-keeping requirements, due diligence efforts, and information sharing prescribed in the Act on Prevention of Transfer of Criminal Proceeds.

Resolutions and Sanctions

Administrative Measures

There are no criminal sanctions for AML law breaches. Administrative measures can be taken by competent authorities.

Limitation Periods

Limitation periods do not apply to administrative measures regarding AML violations.

Extraterritoriality

Application of AML Laws

Japan’s AML laws apply to foreign institutions and persons if they fall within the category of covered institutions. There is no specific provision regarding subsidiaries of domestic institutions in foreign jurisdictions.

Civil Claims

Private Rights of Action

There are no specific provisions regarding civil claims or private rights of action against money launderers and covered institutions. Victims of crimes can bring a civil action for damages against money launderers who concealed crime proceeds and caused damage to the victim.

International Efforts

FATF and International Cooperation

Japan is a member of the Financial Action Task Force (FATF), Asia/Pacific Group on Money Laundering, and Egmont Group. The FATF conducted a mutual evaluation of Japan regarding compliance with its 40 Recommendations and nine Special Recommendations from 2007 to 2008.