Financial Crime World

Japan Takes a Tougher Stand Against Financial Crimes

Japanese Authorities Step Up Efforts to Curb Financial Wrongdoings

Japan’s financial regulatory bodies have been bolstering their efforts in recent years to combat financial crimes within the country. The Japanese authorities have implemented a series of measures aimed at tightening the noose around individuals and organizations engaged in financial wrongdoings.

The Financial Intelligence and Investigation Unit (FIU)

  • The latest addition to Japan’s financial crime-fighting tools is the Financial Intelligence and Investigation Unit (FIU) under the Financial Services Agency (FSA), which began operations on April 1, 2023.
  • The FIU is responsible for gathering intelligence and investigating financial crimes, specifically those related to securities and markets.
  • With a staff of about 60 investigators, the unit is expected to enhance the FSA’s ability to quickly identify and address financial wrongdoings.
  • The FIU serves as a crucial link to the police and other relevant agencies during investigations.

Strengthening the Regulatory Framework

  • Japanese authorities have been focusing on strengthening the rules governing financial instruments and their issuers.
  • For instance, the Financial Instruments and Exchange Act (FIEA), enacted in 2017, covers a broad range of financial instruments, including securities, currencies, swaps, and various derivatives.
  • The Act aims to improve transparency and reduce risks associated with these instruments by requiring issuers to disclose essential information and conduct regular reporting.

Increased Penalties for Financial Misconduct

  • The Japanese authorities have also been focusing on strengthening penalties for financial misconduct.
  • Under the revised Financial Instruments and Exchange Law that came into effect on April 1, prison terms for financial crimes have been increased, with the maximum term now being ten years.
  • Fines for financial violations have also been raised, with the maximum fine amounting to 450 million yen (approximately 4.2 billion USD).

International Cooperation

  • As part of its fight against financial crimes, Japan has been cooperating with other countries in areas such as the exchange of information and mutual legal assistance.
  • The country has been pushing for stronger international cooperation to tackle cross-border financial crimes, including money laundering, tax evasion, and market manipulation.

Summary

The Japanese financial regulatory bodies have taken a tougher stance against financial crimes in recent years. The establishment of the Financial Intelligence and Investigation Unit under the Financial Services Agency, the strengthening of rules governing financial instruments and their issuers, and the bolstering of penalties for financial misconduct have put the Japanese authorities in a strong position to make substantial inroads in curbing financial wrongdoings within and outside their borders.