Financial Crime World

Japan Cracks Down on Financial Crimes: A Look into the Penalties and Measures against Money Laundering and Terrorist Financing

Japan has taken a proactive approach in the global fight against financial crimes, particularly money laundering and terrorist financing. In this article, we will provide an overview of the significance of these measures, the international efforts against financial crimes, and the regulations in place in Japan.

1. The Significance of Anti-Money Laundering and Counter-Terrorist Financing Measures

  • Money laundering: the process of concealing the illicit origin of criminal proceeds
  • Financial crimes pose a significant threat as they fund various illegal activities, such as drug trafficking and terrorist acts

2. The Evolution of Anti- Money Laundering and Counter-Terrorist Financing Regimes in International Society

  • Response to financial crimes began in the late 1980s
  • UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (UN New Narcotics Convention): criminalized money laundering from drug crimes and established regulatory frameworks for confiscating proceeds
  • Financial Action Task Force (FATF) established in 1990 to facilitate international cooperation on anti-money laundering
    • Issued “The 40 Recommendations” in 1990, setting standards for anti-money laundering measures
    • Revised “The 40 Recommendations” in 1996 to extend the scope of predicate offenses from drug crimes to serious crimes
    • Issued “The 9 Special Recommendations” in 2001 to address terrorist financing

3. Japan’s Anti-Money Laundering and Counter-Terrorist Financing Regime

  • “The Anti-Drug Special Provisions Law” enacted in 1992 to implement UN New Narcotics Convention and criminalize money laundering activities related to drug crimes
  • “Act on Punishment of Organized Crimes” enacted in 2000 to expand the scope of predicate offenses and establish the Financial Intelligence Unit (FIU) under the Financial Services Agency
  • “Act on Punishment of Financing of Offences of Public Intimidation” passed in 2002 to implement the International Convention for the Suppression of the Financing of Terrorism and include terrorist financing as a predicate offense

These measures have strengthened Japan’s stance against financial crimes and ensured a more effective response to this growing threat.