Financial Crime World

Japan Strengthens Anti-Money Laundering Measures to Combat Financial Crimes

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The Japanese government has been revising and strengthening its anti-money laundering (AML) measures in response to international efforts and threats posed by financial crimes.

History of AML Measures in Japan

  • In 1992, Japan enforced the “Anti-Drug Special Provisions Law” to combat money laundering activities connected with drug crimes.
  • However, a mutual evaluation by the Financial Action Task Force (FATF) in 1994 highlighted limitations in the predicate offenses for money laundering and the suspicious transaction reporting system.

Key Revisions and Enactments

Act on Punishment of Organized Crimes (2000)

  • Expanded the scope of predicate offenses and introduced a broader range of crimes subject to suspicious transaction reports.
  • Designated the Financial Supervisory Agency (now known as the Financial Services Agency) as the country’s Financial Intelligence Unit (FIU).

Act on Punishment of Financing of Offences of Public Intimidation (2002)

  • Aimed to combat terrorist financing, including terrorist funding as a predicate offense and measures to prevent the misuse of financial institutions.

Revised Laws in Response to FATF Recommendations

June 2003

  • Extended the scope of business operators required to implement customer identification and other measures.

February 2012

  • Further strengthened AML regime, including expanding the scope of predicate offenses and introducing new measures.

Act on Prevention of Transfer of Criminal Proceeds (2007)

  • Aimed to prevent the transfer of criminal proceeds and implement international standards.
  • Partially enforced in 2008, with remaining provisions taking effect in 2013.

Recent Developments

Meeting on Customer Due Diligence for Measures Against Money Laundering (2010)

  • Held a meeting of business operators on customer due diligence for measures against money laundering.

Amendment to Act on Prevention of Transfer of Criminal Proceeds (2011)

  • Aimed to address issues related to customer due diligence and prevent the misuse of financial institutions.
  • Revised law fully enforced in April 2013.

Commitment to Combating Financial Crimes

“We will continue to work with the FATF and other countries to strengthen our AML regime and protect the integrity of our financial system,” said a government official.