Global knowledge management of suspicious transaction reporting system in Japan

Date21 January 2020
Published date21 January 2020
AuthorNoriaki Yasaka
subjectMatterFinancial risk/company failure,Financial compliance/regulation,Financial crime
Global knowledge management of
suspicious transaction reporting
system in Japan
Noriaki Yasaka
Faculty of Law, Takaoka University of Law, Takaoka, Japan
Purpose The purpose of this study is to make clear the structure of suspicious transaction reporting
system in Japan from perspective of knowledge management. Because of the institutionalization of law,
suspicious transaction reports in Japan have increased, but most of these reports are from nancial
institutions. Moreover, it cannot be said that the effect is used completely. It is important to increase the
accuracy of the data mining method and incorporatethe concept of knowledge management. Furthermore, it
is desirableto use suspicious transactions from a globalknowledge managementperspective.
Design/methodology/approach Based on the case of the Japanese transaction reporting system,
Global knowledgemanagement of suspicious transactionreporting system would be considered.
Findings It is effective for money laundering countermeasures to deepen knowledge management of
data !information!knowledge !wisdom. This brings the renement of typology at the transactionunit
to the upper level. This repetition has become more advanced and generalized knowledge. Knowledge
transferred from national stage to international stage is organized as further information !knowledge !
wisdom by collecting data based on that knowledge. By repeating this systematization in the process of
knowledge management, globalprevention measures against money laundering would be disseminated. As
the result ofthese efforts, effective counter measures againstmoney laundering could be sharper than before.
Originality/value This is the rst study aboutthe analysis of suspicious transaction reporting systemin
Japan linkedto the global knowledge management.
Keywords Knowledge management, Data mining, Japan Financial Intelligence Center (JAFIC),
Suspicious transaction report (STR), National Public Safety Commission, Anti-Drug Special Law
Paper type Conceptual paper
1. Introduction
The suspicious transaction reporting system uses information notied by a specic
business operator to investigate money laundering offenses, their predicate offences and to
prevent services provided by specied businesses from being used by criminals. It is an
institutionalized concept.It was stipulated in Article 15, 16 of the recommendationof FATF
40, enacted in 1990 when the institutional design of member countries was recommended
[Financial ActionTask Force (FATF), 1990].
2. Background
2.1 Suspicious transaction reporting system in Japan
Suspicious transactions are consolidated in the National Public SafetyCommission and the
National Police Agency (Japan Financial Intelligence Center: JAFIC). JAFIC organizes and
analyzes these transactions, then selects and provides information on suspicious
transactions to be provided to investigative institutions such as prefectural polices and
public prosecutorsofces. Investigative organizations and others who receive information
on suspicious transactions make this information a starting point for criminal
Journalof Money Laundering
Vol.23 No. 1, 2020
pp. 55-63
© Emerald Publishing Limited
DOI 10.1108/JMLC-04-2019-0032
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