Financial Crime World

Japan’s Stricter Regulations Against Money Laundering Gain International Attention

TOKYO - Japan has taken significant steps to strengthen its regulations against money laundering, according to a recent report submitted by the country to the United Nations Convention Against Corruption (UNCAC). The measures aim to deter and detect money laundering, ensuring that financial institutions and designated non-financial businesses and professions comply with customer due diligence requirements.

Enhanced Anti-Money Laundering Regulations

The Act on Prevention of Transfer of Criminal Proceeds has been instrumental in combating money laundering and terrorist financing. Financial institutions, including non-bank institutions, are now required to:

  • Identify customers and beneficial owners: Ensure that all customers and beneficial owners are properly identified and verified.
  • Maintain transaction records: Keep accurate and detailed records of all transactions.
  • Report suspicious transactions: Report any suspicious transactions to the Financial Intelligence Unit.

International Cooperation

Japan’s National Public Safety Commission exercises administrative supervision over the Japan Financial Intelligence Center (JAFIC), which is responsible for:

  • Collecting, analyzing, and disseminating information on suspicious transactions: Gather and analyze information on suspicious transactions to prevent money laundering.
  • Cooperating with foreign financial intelligence units: Share information and cooperate with other countries to combat international money laundering schemes.

Membership in International Organizations

Japan has become a member of various international organizations, including:

  • Financial Action Task Force (FATF): Participate in global initiatives against money laundering and terrorist financing.
  • Asia/Pacific Group on Money Laundering (APG): Collaborate with other countries to combat money laundering in the Asia-Pacific region.
  • Egmont Group: Exchange information and cooperate with other countries to prevent money laundering.

Reporting Requirements

Individuals traveling to or from Japan are required to declare:

  • Cash transactions exceeding ¥1 million: Report any cash transactions exceeding ¥1 million.
  • Checks, promissory notes, and securities: Disclose the originators of electronic transfers of funds and maintain such information throughout the payment chain.

Challenges and Future Initiatives

Despite efforts to strengthen anti-money laundering regulations, challenges remain in monitoring compliance among banks and other reporting entities. Japan is working to:

  • Strengthen regulations: Improve laws and regulations to prevent money laundering.
  • Enhance international cooperation: Collaborate with other countries to combat money laundering.

International Recognition

Japan’s commitment to combating money laundering has been recognized internationally, with participation in various regional and multilateral initiatives. The country:

  • Exchanges information with other countries through Interpol: Share information on suspicious transactions to prevent money laundering.
  • Provides/receives evidence via central authorities designated in mutual legal assistance agreements (MLATs) or memoranda of understanding (MOUs): Cooperate with other countries to investigate and prosecute money laundering cases.