Cabinet OKs bills against financing terrorism

Japan Policy & Politics, March 18, 2002

TOKYO, March 12 Kyodo

The cabinet of Prime Minister Junichiro Koizumi on Tuesday approved a set of bills to bar financing for terrorists, government officials said.

The bills, to be sent to the Diet for enactment, include one drafted by the Financial Services Agency (FSA) to require identity confirmation of people making large-lot financial transactions.

The government officials said the FSA is trying to make it compulsory for financial institutions to confirm the identity of people making transactions of ''more than 2 million yen,'' although some lawmakers oppose the plan, saying it would complicate operations at financial institutions.

The FSA is likely to decide on an amount that is larger than 2 million yen but much smaller than 30 million yen, FSA officials said.

Another bill calls for a maximum prison term of 10 years or fine of 10 million yen for those who help finance terrorists, regardless of whether the money is used in terrorist acts or not. The bill is in line with the U.N. Convention for the Suppression of the Financing of Terrorism which the Japanese government is preparing to ratify.

Under the FSA-initiated bill, banks, securities firms, and consumer credit companies will be required to make identity confirmations through drivers' licenses and other documents of people opening accounts or making large transactions.

The financial institutions would also be required to keep a record of transactions made by customers for at least seven years.

Currently, the Japanese banking industry checks the identity of people making transactions in amounts of 30 million yen or more, although such checks are not legally required.

The government will also revise the Foreign Exchange and Foreign Trade Control Law to allow the Finance Ministry to quickly freeze funds to terrorists in cooperation with other ministries and agencies, the officials said.