Risks Associated with Money Laundering and Terrorist Financing in Japan

High-Risk Transaction Types

The following transaction types pose significant risks for money laundering (ML) and terrorist financing (TF):

Non-Face-to-Face Transactions

High risk of being misused for ML/TF due to difficulties in verifying customer identification
Examples include cases where criminals obtained criminal proceeds by impersonating others through online transactions

Cash Transactions

High liquidity and anonymity make it difficult to trace criminal proceeds
Examples include cases where money launderers converted goods into cash or received large amounts of cash at ATMs

International Transactions

Difficult to track transferred funds due to differences in legal systems and transaction systems
Transactions with countries/regions with poor AML/CFT measures are high-risk

Countries and Regions of Concern

Transactions with the following countries/regions pose significant risks:

High-Risk Countries/Regions

Transactions with Iran or North Korea pose very high risks
Transactions with FATF-listed countries/regions that have serious strategic deficiencies related to AML/CFT measures are also risky

Customer Attributes of Concern

The following customer attributes present a risk due to their involvement in various crimes and ability to disguise criminal proceeds as legitimate funds:

Boryokudan, etc. (anti-social forces) present a risk
- Involvement in various crimes
- Ability to disguise criminal proceeds as legitimate funds

Conclusion

These findings highlight the importance of implementing effective anti-money laundering (AML) and combating the financing of terrorism (CFT) measures to prevent ML/TF activities.