Business

Japan’s financial watchdog tells banks to report suspicious transfers by joint ventures with North Korea

Reuters

The Financial Services Agency has told banks to report any suspicious money transfers involving 10 Japan-North Korea joint ventures, two people with direct knowledge of the matter said Friday.

A government official and a manager at a major Japanese bank said the agency on Monday told banks and credit associations to report such transfers by the joint ventures.

The firms suspected of making such transactions were unable to be identified. However, the Mainichi newspaper reported they included a manufacturer of pianos and acoustic devices, as well as a food sales company.

The FSA declined to comment.

The U.N. Security Council last year passed a resolution banning new joint ventures involving individuals or groups from North Korea, as well as investments in existing enterprises.

The FSA, concerned that domestic lenders are lagging in their efforts to stop money laundering and other illicit finance, has been urging banks to step up measures to detect suspicious transactions.

Japan faces a peer review in 2019 by the Paris-based Financial Action Task Force, a group created by the Group of Seven industrial powers to fight illicit finance.

A critical report from the task force might result in sanctions that would include shutting Japanese lenders out of the global banking network.