Upcoming FATF review has Japan studying its AML Compliance efforts


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Japan considers more AML Compliance rigor

With an international peer review of its AML Compliance requirements on tap for 2019, Japan’s Financial Services Agency is urging financial institutions there to do a better job with CDD/KYC and suspicious transactions.

Reuters reported last week that Japan’s Financial Services Agency, which regulates the nation’s banks, wants the nation and its banks to achieve more robust AML Compliance in advance of next year’s assessment by the Financial Action Task Force (FATF). FATF has warned Japan in the past about inadequate elements in its AML Compliance regulations and enforcement, and the FSA wants to show that Japan has made progress toward addressing those concerns.

FATF reviews can result in high-stakes accountability for nations that lag in AML Compliance. Poor reviews from FATF can result in severely decreased access to the global financial system that requires adherence to agree-upon AML Compliance standards and enforcement efforts.

Japan’s FSA will collaborate with the Japanese Bankers’ Association to discuss AML Compliance standards and enforcement efforts over the course of this year, according to Reuters’ sources.

In a report last week in the Japan Times, the FSA said it will be focusing on evaluating AML Compliance at smaller regional banks. The FSA has noted “widespread” deficiencies in verifying KYC information and in tracking and reporting suspicious transactions, according to the Reuters report.


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