JAPAN TIMES



 

The banking industry will strengthen efforts to prevent money laundering in preparation for the planned review of industry efforts by an international organization in the autumn.

Next month, MUFG Bank, a core unit of Mitsubishi UFJ Financial Group Inc., plans to terminate overseas remittances made at the counter of branch offices that bypass bank accounts.
Other banks are likely to follow suit.

The review will be carried out by the Financial Action Task Force, an international framework in which 36 countries and regions mutually examine measures to forestall money laundering and terrorist financing.
In the previous review conducted in 2008, the FATF concluded that measures taken by the Japanese government and financial institutions were insufficient.

If the industry receives a similarly inferior evaluation again, Japanese banks’ international transactions may be subject to restrictions, and overseas settlements and remittances, as well as transactions for cross-border trade, may be affected.

Regional banks have taken the lead in stopping some forms of overseas fund transfers, since the services are not frequently used in smaller cities and are thus unprofitable.

Shimane Bank is one of the regional lenders that have withdrawn from all types of overseas remittances, including services that use bank accounts.
The Financial Services Agency will keep all financial institutions and other businesses informed of the need to urge foreign students and workers in Japan to close their bank accounts in the nation when they return home.

The request comes after many such bank accounts were sold for extra income and used in money laundering and remittance fraud cases.
“Japan is a rare country where the number of crimes is small, which led to the delay in efforts to fight money laundering,” a senior official of a major bank said.

According to the National Police Agency, however, suspected transfers of criminal proceeds are increasing, making it urgent for banks to step up efforts to tackle money laundering.