Banks Urged to Notify Customers of Changes in Personal Information
In an effort to combat money laundering and terrorist financing, financial institutions in Japan are being reminded to notify customers of any changes to their personal information.
Responsibility to Ensure Accurate Customer Information
According to the Financial Services Agency (FSA), banks have a responsibility to ensure that customer information is accurate and up-to-date. This includes notifying customers of any changes to their address or other personal details. In recent years, banks have become more proactive in confirming with customers whether their information has changed. For example, some banks send emails or letters to customers to verify their updated information.
New Measures to Combat Money Laundering
Japan has implemented several new measures to combat money laundering and terrorist financing. These include:
- Confirming visitors’ period of stay in Japan and requesting closure of deposit accounts upon return
- Screening customers against databases of anti-social forces and sanctioned persons
- Monitoring transactions for suspicious activity
- Freezing bank accounts used for fraud or other criminal activities
Increased Supervision
The FSA has also strengthened its inspections of financial institutions, focusing on AML/CFT measures and off-site monitoring. The agency has requested that financial institutions complete the development of their governance arrangements in compliance with guidelines published by the FSA by the end of March 2024.
Failure to comply with these guidelines may result in administrative penalties or other sanctions.
International Cooperation
Japan is a member of the Financial Action Task Force (FATF) and has developed its legal framework for AML/CFT based on FATF recommendations. One of Japan’s major banks, MUFG, is also a member of the Wolfsberg Group, which publishes frameworks and guidance for managing financial crime risks.
Personal Data Protection
The handling of personal data is governed by the Act on the Protection of Personal Information (APPI). Obligated entities, such as banks, are required to obtain customers’ consent when providing their personal data to third parties. However, they are exempt from this obligation in certain circumstances, such as where the provision of personal data is necessary to protect an individual’s life or property.
Whistleblower Protection
The Whistleblower Protection Act protects employees who report suspected money laundering activities by their employer from dismissal or other unfavorable treatment.
As Japan continues to implement stricter AML/CFT measures, financial institutions are urged to remain vigilant and ensure that they comply with regulatory requirements. Failure to do so may result in administrative penalties or other sanctions.