Japan regulates anti-money laundering through the Act on Prevention of Transfer of Criminal Proceeds, supervised sector by sector and enforced by JAFIC inside the National Police Agency. The Financial Services Agency adds binding supervisory guidelines for the firms it licenses. Both layers bind every specified business operator, not just banks.
Key takeaways
- Japan received 849,861 suspicious transaction reports in 2024, the highest on record, of which banks and other depository institutions filed 580,382, or 68.3%.
- Supervision is split: JAFIC is the financial intelligence unit, but the supervisor that inspects you is whichever ministry already licenses your sector.
- Japan entered enhanced follow-up after its fourth round FATF mutual evaluation was published in August 2021, and cleared every partially compliant and non-compliant technical rating by October 2024.
- Penalties for trading deposit passbooks rose on 10 July 2026 to three years' imprisonment or a fine of up to JPY 5 million, and to five years or JPY 10 million where the trade is conducted as a business.
Who regulates AML/CFT in Japan?
Three bodies do different jobs, and firms new to the market routinely confuse them. JAFIC, Japan's financial intelligence unit, was established in 2007 inside the National Police Agency. It collects, organises and analyses suspicious transaction reports, disseminates them to investigators, and publishes the National Risk Assessment and its follow-up reports.
JAFIC does not licence anyone. Supervision under the Act on Prevention of Transfer of Criminal Proceeds belongs to the "competent administrative authority" for each sector, which is the ministry that already regulates that business. For banks, securities firms, insurers, funds transfer service providers and crypto-asset exchange service providers, that authority is the Financial Services Agency (FSA).
Other sectors answer elsewhere. Real estate agents report to the Ministry of Land, Infrastructure, Transport and Tourism or a prefectural department, dealers in precious metals and stones to the Ministry of Economy, Trade and Industry, and telephone forwarding services to the Ministry of Internal Affairs and Communications, as JAFIC's own guidance to business operators sets out.
The National Public Safety Commission sits alongside all of this. Where police suspect a specified business operator has breached its duties, the Commission can order the firm to submit a report and issue an opinion statement to the competent authority, which then decides whether to issue a rectification order.
Which laws make up Japan's AML/CFT framework?
Four instruments carry most of the weight, and they divide cleanly between preventive duties and criminal offences. The Act on Prevention of Transfer of Criminal Proceeds (Act No. 22 of 2007) is the preventive statute: verification at the time of transaction, records, and suspicious transaction reporting. Our APTCP obligation guide walks through those duties article by article.
Money laundering itself is criminalised elsewhere. The Act on Punishment of Organized Crimes covers management control through illicit proceeds, concealment of criminal proceeds and receipt of criminal proceeds. The Anti-Drug Special Provisions Act, in force since July 1992 and Japan's first AML statute, covers the equivalent drug-proceeds offences.
The Foreign Exchange and Foreign Trade Act supplies the sanctions layer. It obliges banks, funds transfer service providers, currency exchange operators and crypto-asset exchange service providers to confirm customer identity so that asset freezes bite, with its own seven-year record retention rule and its own rectification-order penalty of up to two years' imprisonment or a JPY 3 million fine.
Above the statutes sit the FSA's supervisory guidelines, revised on 31 March 2026. They are not law, but the FSA inspects against them, which makes the practical distinction thin.
Who counts as a specified business operator?
The APTCP scope is wider than "financial institution" and closer to the FATF definition of designated non-financial businesses and professions. Around fourteen categories are in scope, and each has its own trigger transaction rather than a single universal threshold. The table below reproduces the triggers published by JAFIC.
| Specified business operator | Transaction that triggers verification |
|---|---|
| Financial institutions | Opening a deposit account; cash transactions over JPY 2 million; cash remittance over JPY 100,000 |
| Financial leasing operators | Lease contracts where the fee exceeds JPY 100,000 per payment |
| Credit card operators | Conclusion of a credit card contract |
| Real estate agents | Sale, purchase, agency or intermediation of building lots or buildings |
| Dealers in precious metals and stones | Cash purchase or sale contracts over JPY 2 million |
| Postal, telephone receiving and forwarding services | Conclusion of the service contract |
| Judicial scriveners, accountants, tax accountants, administrative scriveners | Company formation or merger work; managing or disposing of property over JPY 2 million |
| Lawyers | Equivalent duties, set by Japan Federation of Bar Associations rules |
Two later additions matter for anyone building a payments or digital-asset business. Crypto-asset exchange service providers were brought fully into the reporting and travel-rule provisions by April 2024, and electronic payment instruments service providers plus issuers of high-value transferable prepaid instruments were added from 1 June 2023. See our payments and fintech and real estate pages for how these obligations land sector by sector.
What happens to a suspicious transaction report in Japan?
Reports go to the competent administrative authority for the sector, not directly to JAFIC. That authority then notifies the National Public Safety Commission, and JAFIC analyses the report centrally. Volumes are large and rising: 849,861 reports in 2024, against 707,929 in 2023 and 432,202 in 2020.
Concentration is heavy. Banks and other depository institutions filed 580,382 reports, 68.3% of the total, followed by money lenders on 88,282 and credit card operators on 57,978. JAFIC held 7,043,010 stored reports at the end of December 2024.
The output side is what makes the volume defensible. JAFIC disseminated information on 815,318 reports to law enforcement in 2024, and prefectural police used 629,135 reports in investigations. Fraud-related crime dominates: 962 cases were initiated by a suspicious transaction report in 2024 and a further 1,381 used one.
Reports also travel. JAFIC had information-exchange arrangements with the financial intelligence units of 119 jurisdictions at the end of 2024, handling 417 information requests in both directions during the year.
How did Japan perform in its FATF mutual evaluation?
Japan's fourth round mutual evaluation report was adopted at the June 2021 plenary and published that August, placing Japan in enhanced follow-up rather than regular follow-up. Recommendations rated partially compliant or non-compliant covered customer due diligence and supervision of designated non-financial businesses, beneficial ownership transparency for legal persons and arrangements, politically exposed persons, targeted financial sanctions and non-profit organisations.
Japan legislated in response. The Act to Respond to FATF Recommendations, enacted on 2 December 2022, raised the statutory maximum for concealment of criminal proceeds from five years to ten years' imprisonment and extended confiscation to cover crypto-assets. Amendments to the APTCP were fully in force by 1 April 2024.
The result came in October 2024, when every technical compliance rating previously marked partially compliant or non-compliant was upgraded to largely compliant. Effectiveness is the weaker half of the picture: Japan holds substantial ratings on risk assessment, international cooperation and use of report information, and moderate on the other eight immediate outcomes.
The fifth round is now the live question. The FSA's July 2026 report on AML initiatives and challenges tells firms to verify the effectiveness of what they have built ahead of it, and points to the first five countries assessed under the new methodology: Malaysia, Belgium, Italy, Austria and Singapore. Our explainer on what FATF mutual evaluations mean covers the mechanics.
How do the FSA guidelines relate to the APTCP?
The two documents answer different questions, and treating them as one compliance obligation is the most common structural mistake. The APTCP tells you what you must do: verify these items, keep these records for seven years, file a report when you suspect criminal proceeds. It is drafted as rules with penalties attached.
The FSA guidelines tell you how the supervisor will judge whether you did it well. They set out a risk-based approach across risk identification, assessment and mitigation, customer due diligence, transaction monitoring and filtering, record keeping, IT systems, data governance and board involvement. Compliance is assessed on effectiveness, not on whether a procedure document exists.
The guidelines bind only FSA-regulated institutions. A real estate agency or a precious metals dealer is fully within the APTCP but outside the FSA guidelines, and looks instead to its own ministry's guidance.
The current version dates from 31 March 2026 and took effect the same day. That revision changed the structure of the document rather than only its wording, which our analysis of the 2026 guideline changes sets out in before-and-after form.
What are the money laundering offences in Japan?
Preventive breaches and money laundering itself carry separate penalties, and conflating them understates both. Under the Act on Punishment of Organized Crimes, concealment of criminal proceeds now carries up to ten years' imprisonment or a JPY 5 million fine, receipt of criminal proceeds up to seven years or JPY 3 million, and management control through illicit proceeds up to ten years or JPY 10 million. Those ceilings were raised on 29 December 2022.
Enforcement volume has climbed alongside them. Police cleared 1,283 money laundering cases in 2024, up from 909 in 2023 and 600 in 2020, with concealment of criminal proceeds accounting for 1,037 of them.
Trading in deposit passbooks and account credentials is a separate APTCP offence, and the largest category by volume: 4,513 cleared cases in 2024, of which 4,321 involved the transfer of a deposit or savings passbook. The 2026 amendment to the APTCP, promulgated on 10 June 2026, raised those penalties from 10 July 2026.
Where do Japan's money laundering risks concentrate?
Fraud is the dominant predicate offence, and the pattern is consistent across every data source. The FSA reported that damage from online and telephone scams reached JPY 325.7 billion in 2025, roughly 1.6 times the previous year, driven by investment and romance scams originating on social platforms.
The laundering mechanism is mundane rather than exotic. Criminal groups buy or recruit access to accounts opened in other people's names, which is why passbook trading offences outnumber money laundering convictions by more than three to one, and why the 2026 amendment created a new offence covering both those who pay others to move funds through accounts held in their own names and those who carry it out.
Digital channels are the growth area. Cleared cases involving the transfer of crypto-asset exchange credentials rose from 6 in 2020 to 90 in 2024, and the FSA now names crypto-assets, stablecoins and online casinos as the emerging risks firms are expected to track.
For firms operating in Japan, that shapes where controls earn their keep: identity assurance at onboarding, sanctions and PEP screening against a current list, and transaction monitoring tuned to mule-account behaviour rather than to generic typologies. Our Japan country coverage page summarises the obligations, and the glossary of AML terms defines the vocabulary supervisors use.
