Japan’s Financial Institutions Must Comply with Stricter Anti-Money Laundering Regulations
TOKYO, JAPAN - In a move to strengthen its anti-money laundering (AML) and counter-terrorism financing (CFT) measures, Japan’s regulatory authorities have issued guidelines for financial institutions to implement stricter governance arrangements.
Guidelines for Financial Institutions
Under the guidelines, obliged entities such as banks, fund transfer service providers, and cryptoasset exchange service providers are required to take specific measures to prevent money laundering and terrorist financing. These measures include:
- Ongoing customer management
- Hiring staff with knowledge of AML/CFT
- Implementing robust monitoring systems
Compliance Deadline
Financial institutions must complete their governance arrangements in compliance with the guidelines by the end of March 2024. The Financial Services Agency (FSA) has also strengthened its inspections focused on AML/CFT measures and off-site monitoring of financial institutions.
Commitment to Compliance
“We are committed to ensuring that our financial institutions have robust anti-money laundering and counter-terrorism financing systems in place,” said a spokesperson for the FSA. “We will continue to closely supervise obliged entities and take appropriate action against those that fail to comply with the guidelines.”
Reporting Suspicious Transactions and Maintaining Records
The guidelines also require financial institutions to report suspicious transactions and maintain accurate records of their customers’ activities.
Whistleblower Protection Act
In addition, Japan’s Whistleblower Protection Act protects employees who report money laundering activities from dismissal or other unfavourable treatment by their employer.
International Monitoring
Japan’s anti-money laundering regulations are closely monitored by international organizations such as the Financial Action Task Force (FATF). Japan has been a member of the FATF since its establishment in 1990 and has developed its legal framework for AML/CFT based on FATF recommendations.
Expert Opinion
Experts say that Japan’s move to strengthen its AML/CFT measures is a positive step towards reducing the risk of money laundering and terrorist financing in the country.
“Japan’s anti-money laundering regulations are getting increasingly strict, and financial institutions must adapt to these changes,” said an expert from the Japanese Bankers Association. “We expect the FSA to continue to closely supervise financial institutions and take appropriate action against those that fail to comply with the guidelines.”
Conclusion
In conclusion, Japan’s financial institutions must comply with stricter anti-money laundering regulations, which include ongoing customer management, hiring staff with knowledge of AML/CFT, and implementing robust monitoring systems. Failure to comply may result in administrative penalties.