Notification Requirements for Electronic Payment Methods and Digital Assets Transfer

In today’s increasingly globalized economy, the transfer of electronic payment methods and digital assets has become a significant concern in the fight against money laundering and terrorist financing. As such, it is essential to notify the outsourced party of a customer’s identification and other relevant information when engaging in these transactions.

Confirmation System at Transaction Time

To ensure seamless confirmation at the time of transaction, businesses are advised to establish a system that includes:

• Education and training for employees
• Maintenance of rules and regulations

This will enable them to properly identify suspicious transactions and take necessary action. AML compliance requires businesses to be proactive in monitoring and reporting suspicious activities.

AML Compliance Requirements Vary Across Institutions

In Japan, different types of institutions have varying AML compliance requirements. For instance:

• Certain professionals such as attorneys and judicial scriveners are exempt from notification requirements for suspicious transactions
• Financial institutions like banks, insurance companies, and financial instruments dealers must adhere to stricter confirmation procedures at the time of transaction conclusion and foreign exchange notification

Government Authorities Oversee Compliance

The supervisory authority varies depending on the type of institution. For instance:

• The Financial Services Agency oversees:
  • Banks
  • Securities companies
  • Funds transfer agents
  • Crypto asset exchangers
• The Minister of Economy, Trade, and Industry monitors:
  • Financial lease companies
  • Credit card companies

Suspicious Activity Monitoring and Reporting Required

Under Japan’s AML rules, specified business operators must report suspicious transactions to the competent supervisory agency. Factors that trigger reporting requirements include:

• Suspicion of property received in transactions being proceeds from crime
• Customers concealing such proceeds

The process for reporting involves:

• Comparing transaction patterns with normal practices
• Examining past records
• Conducting necessary investigations

Confidentiality Requirements Apply

Specified business operators are prohibited from divulging to customers or related parties that they intend to notify or have notified suspicious transactions. Failure to comply may result in:

• Administrative sanctions
• Criminal penalties

Public officials receiving notifications are also subject to confidentiality obligations under the National Public Service Law, with violations punishable by law.

Conclusion

As the global fight against money laundering and terrorist financing continues to intensify, it is essential for businesses to adhere to strict notification requirements when transferring electronic payment methods or digital assets. By doing so, they can help prevent illicit activities and maintain a safe and secure financial environment.