The Financial Action Task Force (FATF) has published Japan’s Mutual Evaluation Report of 2021. Highlights from this report are discussed below.
The report states that Japanese authorities have a good understanding of their ML/TF risks. They adequately gather and utilize financial intelligence to identify and prosecute ML/TF cases. Japan has also demonstrated constructive cooperation with other countries in this regard. Moreover, Japanese authorities sufficiently reach out to businesses to discuss the risks of proliferation financing. As such, Japan’s TF risk is low. Japan has also taken measures to address risks related to virtual assets and their service providers (VASPs).
Overall, the FATF has found that Japan’s AML/CFT measures are effective, but they can be improved by prioritizing in certain areas. These areas include customer due diligence and accessibility to beneficial ownership information. The country also needs to focus more on ML related to complex large-scale fraud and drug-related crimes. Moreover, Japan’s measures to mitigate VASP-related risks now must reach the complete implementation stage.
Source: FATF