CASH MANAGEMENT | Staff Reporter, Japan

Japanese regional banks eye information sharing to combat financial crime

A system that shares information on suspicious customers and transactions is being considered.

A group of 64 regional banks in Japan is eyeing the establishment of an information-sharing system that will help in the fight against money laundering and financial crime ahead of an upcoming inspection by the Financial Action Task Force (FATF) in 2019, reports Japan Today. 

Under the plan, participating banks will share information on customers that raise suspicion, including the nations and regions where the money was directed.

“Banks don't need to compete with each other to take measures against money laundering. There is room for us to do it together," Takashige Shibato, chairman of the Regional Banks Association of Japan told local media.

Regulators have already urged financial institutions handling overseas money transfers to check for suspicious transaction based on the amount and purpose of their remittance after a survey highlighted deficiencies in their ability and preparedness to detect and clamp down on such transactions.

Also read: Regulator launches probe into Japanese regional banks internal audit

The Paris-based FATF, an international-standard setting body that sets standards for fighting money laundering, has identified Japan as having insufficient domestic legislation against financial crime.

It also urged the country to block domestic money transfer linked to terrorism in its last inspection in 2014.

A critical report from the FATF could result in sanctions that may put Japanese banks out of the global banking network as weak financial crime countermeasures could seep over to the global whole financial system.

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