Remittance of virtual currency, strengthening of surveillance Cabinet decision on revision bill
= Reuters
On the 14th, the government approved six revision bills aimed at strengthening measures against money laundering. The Act on Prevention of Transfer of Criminal Proceeds mandates the sharing of customer information between crypto asset (virtual currency) exchanges. Bank-like regulations make it easier to track criminal movements. Japan had been pointed out by international organizations that its measures were inadequate.
In addition to the Act on Prevention of Transfer of Criminal Proceeds, we will collectively revise laws related to money laundering, such as the Foreign Exchange Act and the International Terrorist Property Freezing Act. Money laundering is the practice of transferring criminally-acquired funds to counterfeit or other people's accounts so that their origin cannot be identified. The bill will be submitted to the current extraordinary session of the Diet for early enactment.
The aim of the revision is to (1) strengthen support for crypto assets, (2) strengthen countermeasures against money laundering, and (3) strengthen measures to freeze assets. The government has set up a special cross-ministerial team in the Cabinet Secretariat to study countermeasures.
Revise the Criminal Proceeds Transfer Prevention Act and add virtual currency to the remittance rule called "Travel Rule". Virtual currency exchanges will be obliged to share customer information such as name and address when sending virtual currency entrusted by customers to another company. Administrative guidance and corrective orders will be issued to violating traders, and those who do not comply will be subject to criminal penalties.
In 2019, the Financial Action Task Force (FATF), an international organization that examines anti-money laundering measures, recommended that countries implement the Travel Rule. It also applies to “stablecoins,” a type of virtual currency whose value is linked to legal currencies such as dollars.
The bill to revise the Foreign Exchange Law will add stablecoins to the list of regulated assets as early as May 2023. Prevent transfer to sanctioned parties, such as Russia, or from sanctioned parties to third parties.
The International Terrorist Asset Freeze Act will also be revised to strengthen asset freeze measures. In order to cut off nuclear development funds to North Korea and Iran, we will be able to regulate the financial and real estate transactions in Japan of those involved in nuclear development in both countries. Transactions with foreign countries are already regulated by the Foreign Exchange Law.
Based on the resolution of the United Nations Security Council, the government designates those involved in nuclear development in both countries as subject to sanctions, but the International Terrorist Assets Freeze Act did not.
In addition, the Act on Punishment of Organized Crime will be revised to increase the statutory penalties for crimes related to money laundering.
