Financial Crime World

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Japan’s Anti-Money Laundering (AML) Measures: History and Developments

International Developments

The fight against money laundering has a long history, with several key developments that have shaped Japan’s AML measures.

  • Establishment of the Financial Action Task Force (FATF): In 1989, the FATF was established to combat money laundering and promote international cooperation in this area.
  • FATF 40 Recommendations: In 1992, the FATF issued its 40 Recommendations, which recommended that countries implement AML measures to prevent and detect money laundering. These recommendations were later revised in June 2003 and February 2012 to address new issues such as financing of proliferation of weapons of mass destruction and corruption.

Japanese Legislation

Japan has a comprehensive legislative framework for combating money laundering, with several key laws and regulations enacted over the years.

  • The Anti-Drug Special Provisions Law: Enacted in 1992, this law deals with proceeds of drug crimes.
  • Act on Punishment of Organized Crimes: Enacted in February 2000, this law extended the scope of predicate offences for money laundering and introduced a suspicious transaction reporting system.
  • Act on Punishment of Financing of Offences of Public Intimidation: Enacted in July 2002, this law implemented the International Convention for the Suppression of the Financing of Terrorism.
  • Customer Identification Act: Enacted in January 2003, this law requires financial institutions to identify their customers.

Enforcement and Revisions

Japan has made significant efforts to enforce its AML laws and regulations, with several key developments over the years.

  • Act on Prevention of Transfer of Criminal Proceeds: In November 2005, the National Police Agency drafted a bill to implement the revised FATF Recommendations, which became law in March 2007.
  • Partial Enforcement: The law was partially enforced in April 2007, with remaining provisions enforced in March 2008.
  • Amendments: A bill for amendments to the Act on Prevention of Transfer of Criminal Proceeds was submitted in April 2011 and enacted in May 2011.