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Japan’s Banks Face Enhanced Anti-Money Laundering Measures Following FATF Report

The Japanese government has outlined plans to strengthen anti-money laundering (AML), combating the financing of terrorism (CFT), and counter proliferation financing (CPF) measures for financial institutions and virtual currency exchange providers, following the publication of the Financial Action Task Force’s (FATF) Fourth Round Mutual Evaluation Report on Japan.

Key Measures

According to the report, Japan will take several steps to reinforce AML/CFT/CPF measures by financial institutions (FIs) and virtual currency exchange providers (VCEPs), including:

• Supervising their implementation through on-site inspections
• Strengthening supervision of AML/CFT/CPF measures taken by FIs and VCEPs by autumn 2022
• Enhancing FI’s and VCEP’s understanding of risks and ensuring appropriate risk assessments are conducted by autumn 2022

Implementation Timeline

The Financial Services Agency (JFSA) plans to:

• Fully implement ongoing customer due diligence by FIs and VCEPs by spring 2024
• Operationalize a new shared IT platform for transaction screening and monitoring by the same period

Previous Revisions

The JFSA has already revised its “Guidelines for Anti-Money Laundering and Combating the Financing of Terrorism” in:

• February 2021
• July 2021
• November 2021

Additionally, the agency has revised its FAQ on the guidelines in March 2021.

Contact Information

For further information, please contact the International Affairs Office at the Financial Services Agency’s Strategy Development and Management Bureau at +81-(0)3-3506-6000.