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Japanese Banks Call Gangs to Account
If your company is about to go into business in Japan it will pay to know where gangs – referred to as yakuza – fit into the scene. In more ways than one, Japan has the most overt, upfront gangs in the world. They hold annual general meetings and are sometimes seen on TV. But there’s also an ugly side, of extortion and financial crime. And it can be on a huge scale. If you’re not sure what’s going on, call in a computer forensics team that can X-Ray your company’s operations to detect any unwanted dimensions.
To help clean up the country’s act, the Japanese Bankers Association recently decided to instruct its 187 member banks not to allow gang members to open accounts, in an attempt to counter crime syndicates’ money laundering activities. As reported by The Yomiuri Shimbun, the decision was made by the JBA’s board of directors to oblige its members to establish in-house rules to exclude crime syndicates from their services. The Association had already announced in November last year a policy of banning the syndicates from financial transactions, including loans. This latest prohibition covers members and associate members of crime syndicates, companies that have close connections with crime syndicates and corporate racketeers. Banks will refuse to let them open ordinary savings accounts and current accounts, and will not provide safe-deposit boxes. Accounts already set up by gang members will be cancelled once banks determine their identity.
People and organizations involved in illicit activities such as intimidation will also be excluded from bank services, even if they are not clearly linked to crime. To ensure a consistent policy across the banking sector, the JBA has said it will examine the creation of a database of people linked to the syndicates. At present, banks only compile such information on an individual basis.
The reality is that as cases of gang members using their accounts for money laundering are regularly exposed by the police and other authorities it is obvious that the incidence of this abuse is not declining. Something has to be done. In early 2008, the prefectural police in Kanagawa, to the south of Tokyo, exposed a scheme involving a credit guarantee system, in which a prominent gangster had some of his ill-gotten gains transferred to his bank account. Why this shocked the nation was because a credit guarantee system is a program through which public institutions act as guarantor for small and medium-sized enterprises, therefore helping them to raise capital. This has prompted the JBA to resolve to unite the entire banking industry in banning crime syndicates from accessing its services.
In financial circles, the Japan Securities Dealers Association decided in 2007 to refuse to handle transactions involving crime syndicates. In March this year it set up a joint mechanism to enable its members to request information on such people and is now establishing its own database.
These are all moves in the right direction but if you’re taking your company into Japan it would be most unwise to rely solely upon them. An experienced computer forensics and investigation team will be able to lay bare for you dimensions that the new system may not uncover. After all, if the will to make it work now is as strong as claimed it would surely have been set up and made to work effectively decades ago.
