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BackThe government plans to submit a new bill to the extraordinary Diet to identify the effective controllers of corporations.
The government plans to submit a new bill to the extraordinary Diet to identify the effective controllers of corporations.
Developing
時事通信48 minutes agoPolitics2 min readJapanView original

The government plans to submit a new bill to the extraordinary Diet to identify the effective controllers of corporations.

Aiming at countering money laundering, strengthening economic security, and countering Tokuryu

effective rulermoney launderingeconomic security

Quick Look

  • The draft of a new government bill that would require companies to report information on their beneficial owners (BO) in order to prevent money laundering and strengthen economic security has been revealed.
  • The plan is to obtain approval from the ruling party and submit it to the extraordinary Diet session convened on the 5th.

AI-generated summary

Why It Matters

The FATF requires each country to keep track of BO information, and among the G7 countries, only Japan was lagging behind in developing legislation.

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On the 1st, the draft of the government's new bill to identify the effective owners (BOs) of corporations was revealed on the 1st, in order to prevent money laundering and strengthen economic security. The main pillar of the law is to require corporations to report the name, address, date of birth, and nationality of their effective rulers. If the ruling party approves the bill, the government plans to submit it to an extraordinary Diet session convened on the 5th.

Money laundering techniques that exploit unfounded shell companies are becoming more complex and sophisticated year by year. The government hopes that by making the rulers of corporations more transparent, it will help clarify the reality of anonymous and mobile criminal groups (Tokuryu). The aim is also to understand the status of land ownership by foreigners.

Notification requirements are imposed on all domestic corporations (excluding listed companies) that have their head office or principal office in Japan, as well as some foreign corporations. A foreign corporation must (1) conduct business continuously in the country, (2) have an office in the country, and (3) own real estate in the country.

Eligible corporations must submit information regarding BO to the Legal Affairs Bureau at the time of establishment. In case of violation, a written notice will be given and penalties will be imposed.

BO refers to individuals who directly or indirectly hold more than 25% of the voting rights. BO information will be recorded in a public register and made visible to specific businesses such as administrative agencies and banks.

The Financial Action Task Force (FATF), an international organization, is calling on each country to put in place legislation to ensure the understanding of BO information, and among the Group of Seven (G7) countries, only Japan is lagging behind in developing legislation. The FATF will conduct a review of Japan around the summer of 2028.

What to Watch

AI outlook — possibilities, not facts

  • The government will submit a new bill to the extraordinary Diet session.

    Very likely · Within days

Open Questions

  • Will the approval of the ruling party be obtained?
  • What are the specific details of the penalties?

Related Topics

effective ruler
OrganizationsMetropolitan Police DepartmentLegal affairs bureauFinancial Action Working Group
PlacesJapan
Topicsmoney launderingeconomic securityExtraordinary Diet sessionFATFLegal affairs bureau
This article was originally published by 時事通信.

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