Japan Tightens Banking Regulations to Combat Financial Crime
The Japanese government has taken steps to strengthen banking regulations in an effort to combat financial crime. This move is aimed at ensuring that banks and other financial institutions adhere to strict guidelines and protocols to prevent money laundering, terrorist financing, and other illicit activities.
Key Laws and Regulations
Banking Act
The Banking Act, formulated in 1927 and revised in 1981, is the primary law governing banking activities in Japan. The act divides banking business into six categories:
- Typical banking businesses
- Ancillary businesses
- Securities businesses
- Insurance businesses
- Peripheral businesses
- Trust businesses
Banks are required to obtain a license from the Financial Services Agency (JFSA) to conduct banking business.
Supervision and Inspection
The JFSA is responsible for supervising and inspecting banks to ensure compliance with regulations. The agency has the power to:
- Request reports and materials
- Conduct on-site inspections
- Penalize misconduct
- Order banks to hold assets within Japan
Other key laws that govern banking activities in Japan include:
Measures to Prevent Financial Crime
The Japanese government has taken various measures to prevent financial crime, including:
Strengthening Regulations and Guidelines
Regulations have been strengthened to ensure that banks adhere to strict guidelines and protocols to prevent money laundering, terrorist financing, and other illicit activities.
Enhancing Supervision and Inspection
Supervision and inspection have been enhanced to ensure compliance with regulations. The JFSA has the power to request reports and materials, conduct on-site inspections, penalize misconduct, and order banks to hold assets within Japan.
Improving Customer Verification and Reporting Procedures
Customer verification and reporting procedures have been improved to prevent money laundering and terrorist financing.
Establishing Dispute Resolution Organizations
Dispute resolution organizations have been established to provide a platform for resolving disputes between banks and customers.
Providing Compensation for Damages Suffered by Depositors
Compensation has been provided for damages suffered by depositors in cases where cash cards are counterfeited or stolen.