Financial Crime World

Japan Reinforces Anti-Money Laundering Measures to Address Emerging Threats

TOKYO, JAPAN - The Japanese government has continued to strengthen its anti-money laundering (AML) regime in response to international developments and emerging threats.

A Brief History of Japan’s AML Efforts

In 1992, Japan introduced the Anti-Drug Special Provisions Law, which criminalized money laundering activities connected with drug crimes and established a suspicious transaction reporting system for financial institutions. However, concerns over the limited scope of predicate offenses for money laundering were highlighted in a FATF mutual evaluation in 1994.

Strengthening the AML Regime

In response to these concerns, Japan enacted the Act on Punishment of Organized Crimes in 2000, which extended the scope of predicate offenses for money laundering and introduced a new suspicious transaction reporting regime for serious crimes beyond drug-related activities. The Financial Supervisory Agency was designated as Japan’s Financial Intelligence Unit (FIU), responsible for collecting, analyzing, and disseminating money laundering information to investigative authorities.

Recent Revisions

In 2002, Japan enacted the Act on Punishment of Financing of Offences of Public Intimidation, implementing the International Convention for the Suppression of the Financing of Terrorism. The Act also revised the Act on Punishment of Organized Crimes to include terrorist financing offenses and expanded the scope of suspicious transaction reporting to include assets suspected of being linked to terrorism.

Key Revisions

Here are some key revisions made to Japan’s AML regime:

  • Customer Identification Act (2003): Requires financial institutions to implement customer identification measures and prevent unauthorized use of deposit accounts.
  • Revised Customer Identification Act (2004): Addressed concerns over fictitious names and passbooks.
  • Act on Prevention of Transfer of Criminal Proceeds (2007): Introduced new requirements for business operators, including customer due diligence and suspicious transaction reporting.
  • Amendments to the Act on Prevention of Transfer of Criminal Proceeds (2011): Responded to flaws identified during a FATF mutual evaluation and ongoing issues with call forwarding service providers and savings passbooks being used for illegal activities.

Commitment to Strengthening AML Efforts

Throughout these revisions, Japan has demonstrated its commitment to strengthening its AML regime and addressing emerging threats, including the financing of terrorism and organized crime. The country continues to work towards implementing international standards and best practices in anti-money laundering measures.