Japan Sees Record High in Money Laundering Cases
Tokyo Reports 583,317 Suspected Cases of Money Laundering in 2022
In a shocking revelation, financial institutions in Japan reported a record high of 583,317 suspected cases of money laundering in 2022. This marks an increase of 53,167 from the previous year, raising concerns among businesses and individuals about becoming unwittingly involved in fraudulent activities.
What is Money Laundering?
Money laundering is defined by Japan’s National Police Agency as the act of concealing the source and ownership of criminal proceeds to evade detection and apprehension by authorities. The “laundered” funds can be used to finance the operations of organized crime groups, potentially disrupting normal economic activity.
Stages of Money Laundering
Money laundering typically involves three stages:
- Placement: Depositing cash under fictitious names
- Layering: Moving funds through repeated transactions
- Integration: Reintroducing them into the economy through seemingly legitimate means
Government Measures to Combat Money Laundering
The Japanese government has strengthened its measures against money laundering by increasing statutory penalties for offenders and establishing guidelines for financial institutions. The Act on Punishment of Organised Crimes was amended in 2022 to raise the penalty for controlling business operations using criminal proceeds from up to five years’ imprisonment or a fine of up to ¥10 million to up to 10 years’ imprisonment or a fine of up to ¥10 million.
High-Profile Cases in Japan
Several high-profile cases in Japan have been linked to money laundering, including:
- A scheme involving impersonation of someone else to sell electronic money obtained through fraud
- A case where a company executive transferred criminal proceeds to an offshore account
Perpetrators were charged with “concealment of criminal proceeds,” which accounts for over half of all money-laundering offenses.
Financial Institutions’ Measures to Prevent Money Laundering
Financial institutions in Japan are taking measures to prevent money laundering by:
- Verifying transaction details and customer information
- Requesting customers to provide documentation, such as the Confirmation of Purpose of Transaction or Confirmation of Customer Information, to comply with the Act on Prevention of Transfer of Criminal Proceeds and guidelines established by the Financial Services Agency
If customers fail to respond to these requests within the given deadline, financial institutions may refuse to fulfill their obligations related to a transaction or even halt it altogether. The government is urging people to cooperate with the verification process to prevent fraudulent activities.
By taking proactive measures to prevent money laundering, Japan can reduce the risk of becoming a haven for criminal activity and ensure a safer and more stable economic environment for its citizens.