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Japan’s Efforts to Implement Targeted Financial Sanctions Against Terrorism Financing

Summary

The report highlights Japan’s efforts to implement targeted financial sanctions (TFS) related to terrorism financing (TF). The key findings of this report are as follows:

Progress Made by Japan

• Rapid Implementation: Japan has revised its administrative procedures to implement TF-TFS within 24 hours.
• Notification to Financial Institutions: The Ministry of Finance (MoF) notifies financial institutions, including virtual assets services providers (VASPs), about designated targets before public notice.
• Updated UN Designations: Japan has updated its list of UN designations and provided details on the implementation process.

Areas for Improvement

Despite progress made by Japan in implementing TFS against TF, there are still areas that require improvement. The report notes that:

Delays in Implementation

• Japan does not fully meet the requirement of criterion 6.4 due to a delay in implementing TF-TFS.

Incomplete Asset-Freezing Obligations

• Japan’s asset-freezing obligations do not extend to all funds or other assets owned or controlled by designated persons or entities, nor to funds or other assets derived from or generated from such assets.

Recommendations

To address these gaps in implementation, Japan could consider the following recommendations:

Expanding Asset-Freezing Obligations

• Expand asset-freezing obligations to cover all funds or other assets owned or controlled by designated persons or entities.

Clarifying Definitions

• Clarify definitions of terms such as “payments” and “funds or other assets” to ensure consistency with international standards.