Japan Upgraded to “Largely Compliant” in AML/CFT Efforts

Tokyo, Japan - In a significant milestone for Japan’s anti-money laundering (AML) and counter-terrorist financing (CFT) efforts, the country has been upgraded to “largely compliant” in its re-evaluation report by the Financial Action Task Force (FATF).

Progress in Addressing Technical Compliance Deficiencies

Japan has taken concrete steps to address the technical compliance deficiencies identified in its previous Mutual Evaluation Report (MER) in June 2021. These include:

• Establishment of an Inter-Ministerial Council for AML/CFT & CPF Policy
• Issuance of an AML/CFT/CPF action plan
• Development of a national AML/CFT/CPF policy informed by risks identified in its National Risk Assessment (NRA)
• Strengthening the enforcement of asset freezing measures and legislative reforms

The country has also established a task force to promote the strengthening of terrorist financing investigation and prosecution.

Minor Gap Remains Unaddressed

Despite significant progress, a minor gap remains unaddressed regarding data protection. The report notes that it is unclear whether the mandate of the Council would fully satisfy the requirements of criterion 2.5.

Technical Compliance Ratings Re-Evaluated

Based on Japan’s progress since the adoption of its MER, its technical compliance with FATF Recommendations has been re-evaluated. The report concludes that Japan has largely addressed most of the technical compliance deficiencies identified in its MER and has been upgraded from “partially compliant” to “largely compliant”.

Japan to Continue Improving AML/CFT Measures

Japan will continue to remain in enhanced follow-up and will inform the FATF of progress achieved on improving the implementation of its AML/CFT measures.

The upgrade reflects Japan’s commitment to strengthening its AML/CFT framework and demonstrates its willingness to cooperate with international efforts to combat money laundering and terrorist financing.