Financial Crime World

Japan Takes Strides to Prevent Financial Crime

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Japan has implemented a comprehensive domestic regulatory and oversight regime to curb financial crime and money laundering. The Act on Prevention of Transfer of Criminal Proceeds requires financial institutions and designated non-financial businesses and professions to perform customer due diligence measures, prepare and preserve transaction records, and file suspicious transaction reports.

Cooperative Efforts

Japan Financial Intelligence Center (JAFIC)

Collecting and Disseminating Information

The National Public Safety Commission exercises administrative supervision over JAFIC, which collects, arranges, analyzes, and disseminates information on suspicious transactions to investigative authorities in Japan. The center also shares this information with foreign FIUs.

International Partnerships

Collaboration with FATF and APG

JAFIC has established partnerships with international organizations such as the Financial Action Task Force (FATF) and the Asia/Pacific Group on Money Laundering (APG).

Enhanced Scrutiny on Electronic Transfers

The Act on Prevention of Transfer of Criminal Proceeds requires financial institutions to identify the originator of electronic transfers and maintain this information throughout the payment chain. Enhanced scrutiny is applied to transfers lacking complete information on originator or beneficiary.

Benefits of Enhanced Scrutiny

  • Prevents money laundering by tracking large transactions
  • Identifies potential suspicious activity

Japan exchanges information on money laundering with other countries through Interpol. The country also provides and receives evidence to/from countries via central authorities designated in Mutual Legal Assistance Treaties (MLAT) or Mutual Law Enforcement Assistance Agreements (MLAA).

Benefits of International Cooperation

  • Enhances global efforts to combat financial crime and money laundering
  • Facilitates the exchange of information and evidence between countries

Challenges Faced

Despite progress made, Japan faces challenges in coordinating efforts among relevant agencies responsible for combating money laundering. Monitoring compliance with AML preventive measures also poses a challenge.

Addressing Challenges

  • Implementing effective coordination mechanisms among agencies
  • Enhancing monitoring of compliance with AML preventive measures

Technical Assistance Needed

Japan requires technical assistance to strengthen its measures against financial crime and money laundering. The country is seeking forms of technical assistance such as training programs, capacity building initiatives, and expert advice to enhance its cooperation and information exchange efforts at the national and international levels.

Benefits of Technical Assistance

  • Enhances Japan’s ability to combat financial crime and money laundering
  • Fosters global cooperation in preventing financial crime.