Japan AML Framework: Laws, JAFIC and Beneficial Ownership

Japan's anti-money laundering (AML) system is built around one core statute, a financial intelligence unit inside the police, and a government action plan that followed the country's 2021 Financial Action Task Force (FATF) evaluation. This guide summarises that framework from the Japanese Ministry of Finance's own page on AML, counter-terrorist financing and counter-proliferation financing (AML/CFT/CPF) in Japan. It is useful context for firms with Japanese customers or counterparties. For the international standards behind it, see our guide to the FATF and its 40 Recommendations.

How Japan organises its AML policy

According to the Ministry of Finance, Japan set up an Inter-Ministerial Council in August 2021, after publication of the FATF's Fourth Round Mutual Evaluation Report on Japan. The National Police Agency and the Ministry of Finance co-chair it. It is a director-general-level body that develops and coordinates policy and may create subcommittees. The Ministry's page lists three policy documents: an AML/CFT/CPF Action Plan adopted in August 2021, a Strategic Policy towards Promoting AML/CFT/CPF issued in May 2022, and a National AML/CFT/CPF Action Plan for fiscal years 2024 to 2026 formulated in April 2024, with progress tracked by the council.

The Ministry describes four pillars: preventive measures by financial institutions and designated non-financial businesses and professions, criminalisation of money laundering and terrorist financing, deprivation of criminal proceeds, and countering terrorist and proliferation financing.

The key laws

• Act on Prevention of Transfer of Criminal Proceeds: requires specified business operators to carry out customer due diligence, keep records and file suspicious transaction reports.
• Foreign Exchange and Foreign Trade Act: provides for asset freezing against terrorists and North Korean and Iranian proliferation financing, and requires banks to check remittances and verify customer identity.
• Act on Punishment of Organized Crimes: expands the predicate offences for concealing criminal proceeds and allows confiscation or collection of equivalent value.
• Anti-Drug Special Provisions Law: makes certain drug crimes predicate offences and provides for confiscation of drug proceeds.
• Terrorist financing act: punishes the collection and provision of funds for terrorism.
• Terrorist Asset Freezing Act: covers domestic transactions by international terrorists, which the Foreign Exchange and Foreign Trade Act does not reach.

Risk assessment and supervision

The Ministry says the National Public Safety Commission prepares a National Risk Assessment follow-up report under the Act on Prevention of Transfer of Criminal Proceeds. It assesses money laundering and terrorist financing risk for each category of transaction by specified business operators, using money laundering cases, suspicious transaction reports and data from government agencies.

For financial institutions, the Ministry says authorities supervise compliance with customer due diligence and reporting requirements, and the Financial Services Agency publishes AML/CFT guidelines. For designated non-financial businesses and professions, which include real estate, precious metals and stones dealers, casinos, lawyers and accountants, the government identifies risks, issues guidelines and conducts inspections. Counter-terrorist financing measures also apply to non-profit organisations vulnerable to terrorist abuse, including specified non-profit corporations and public interest, social welfare, medical, educational and religious corporations.

The financial intelligence unit

The Japan Financial Intelligence Center sits under the National Police Agency. It receives and analyses suspicious transaction reports and passes the results to law enforcement. The Ministry says it has information-exchange arrangements with financial intelligence units in more than 100 countries.

Beneficial ownership

Under the Act on Prevention of Transfer of Criminal Proceeds, the Ministry says a beneficial owner is a natural person who directly or indirectly holds more than one quarter of a legal person's voting rights. It lists three measures. Financial institutions and other operators verify beneficial owners of corporate customers during specified transactions. Notaries check beneficial owners when articles of incorporation are certified and confirm they are not organised crime members or international terrorists. And the Beneficial Ownership List System, which began in January 2022 under the Ministry of Justice, lets commercial registries store and provide beneficial ownership lists for stock companies.

Asset freezing and enforcement priorities

The Ministry says Japan freezes assets linked to Taliban-related parties, terrorists, and North Korean and Iranian proliferation under the Foreign Exchange and Foreign Trade Act and the Terrorist Asset Freezing Act, following United Nations Security Council resolutions. It adds that the government's strategy to make Japan the safest country in the world calls for using the organised crime and anti-drug laws to prosecute money laundering and fully confiscate criminal proceeds.

The FATF process

Japan underwent the FATF's Fourth Round Mutual Evaluation. The Ministry says the government is addressing the recommendations and follow-up reports for 2022, 2023 and 2024 while preparing for the Fifth Round under the FATF's revised standards.

Our suggestions for firms dealing with Japan

These are Learnsignal's suggestions, not Japanese regulator requirements. Check whether a Japanese counterparty is a specified business operator, since that affects the due diligence you can expect from them. Use the one-quarter voting rights test as a reference point when comparing it with your own beneficial ownership thresholds. Record whether any Japanese entity you deal with is covered by the beneficial ownership list system. Compare Japan's approach with other Asia-Pacific systems such as Singapore's AML rules. Training on international AML frameworks is available through Learnsignal CPD.

What we could not confirm

This guide relies on a single Ministry of Finance web page, and we did not read the statutes themselves, the Financial Services Agency guidelines, or the FATF report on Japan. The page's link to the council's establishment document carries a filename dated 27 May 2026, which differs from the August 2021 date in the page text, and the page does not explain the difference. We do not give penalty levels, customer due diligence thresholds or reporting deadlines because the page does not state them. We have not checked for later changes to the Japanese framework.

Frequently asked questions

Who receives suspicious transaction reports in Japan?

According to the Ministry of Finance, the Japan Financial Intelligence Center under the National Police Agency receives and analyses them and passes results to law enforcement.

What is the beneficial ownership threshold in Japan?

The Ministry says a beneficial owner is a natural person who directly or indirectly holds more than one quarter of a legal person's voting rights.

When did Japan's beneficial ownership list system begin?

The Ministry says the Beneficial Ownership List System began in January 2022 under the Ministry of Justice.