Japan Tackles Financial Crime with Stringent Sentences

Crackdown on Money Laundering in Japan

The Japanese government has intensified its efforts to combat financial crime by imposing severe penalties on individuals found guilty of money laundering. The country’s laws aim to prevent and punish activities that facilitate the concealment or disguise of illicit funds.

Key Provisions in Japan’s Anti-Money Laundering Laws

• Broader Definition of Money Laundering: Japan’s Anti-Drug Special Provisions Act and the Act on Punishment of Organised Crimes define money laundering as activities such as concealing facts with respect to acquisition or disposition of drug crime proceeds, receiving drug crime proceeds, managing an enterprise by the use of criminal proceeds, concealing crime proceeds, and receiving crime proceeds.
• Predicate Offences: The laws list predicate offences that can generate crime proceeds, including tax evasion and price cartels.
• No Limitation on Assets or Transactions: There is no limitation on the types of assets or transactions that can form the basis of a money laundering offence in Japan.
• No Monetary Threshold for Prosecution: There is also no monetary threshold for prosecution in money laundering cases.

Criminal Sanctions for Money Laundering in Japan

• Imprisonment and Fines: The criminal sanction for money laundering in Japan includes imprisonment for up to five years or a fine of up to ¥10 million, or both.
• Maximum Sentence Variations: The maximum sentence varies according to the type of money laundering activities.

Additional Penalties

• Forfeiture of Crime Proceeds: Courts may order the forfeiture of crime proceeds and collect an equivalent value if the proceeds have already been consumed or transferred to a third party.
• Victim Compensation: Japan’s laws provide for victim compensation, with the government converting crime victims’ property into money and distributing it to victims.

Extraterritorial Reach of Japanese AML Laws

• Non-Citizens and Non-Residents: Japanese AML laws have extraterritorial reach, applying to non-citizens and non-residents who are involved in money laundering activities within the jurisdiction.
• Japanese Nationals Abroad: The laws also apply to Japanese nationals who commit money laundering activities outside the country’s borders.

Limitation Period for Money Laundering Prosecutions

• Three or Five Years: The limitation period governing money laundering prosecutions in Japan is three or five years, depending on the maximum sentence of money laundering activities.