FSA Weekly Review No.540

・Among the businesses conducted by issuers of high-value electronic transferable prepaid payment instruments and Electronic Payment Instrument (i.e. stablecoins) Exchange Service Providers, etc. that become newly subject to the Act on Prevention of Transfer of Criminal Proceeds (APTCP), i.e. the Specified Business Operators, defined businesses subject to the obligation to prepare and maintain transaction records, etc., i.e. the Specified Business, and transactions subject to the obligation to conduct ID verification at the time of transactions, etc., i.e. the Specified Transaction.

・Under the newly introduced travel rules for the transfer of electronic payment instruments (i.e. stablecoins) and crypto assets, the items to be notified, and further defined obligatory measures to adequately perform the verification at the time of the transaction and report suspicious transactions such as collecting information and retaining records when conducting transactions with unhosted wallets and other such mechanisms. (*see the Attachment on the Travel Rules and countermeasures on a transaction involving unhosted wallets).

・Defined methods and standards in conducting due diligence on the status of AML/CFT of the counterparty (e.g., that the counterparty has AML/CFT framework, assigns an AML/CFT Officer in charge to accurately perform the verification at the time of the transaction, etc. and is under appropriate supervision by the regulators) with respect to the obligation to confirm when a newly established Electronic Payment Instrument Exchange Service Provider or  Crypto-asset Exchange Service Provider concludes an alliance agreement related to the transfer of electronic payment instruments or crypto-assets.

* Handouts include the updated lists of members of the council and the committee.

* This Act is under the joint jurisdiction of the Cabinet Secretariat, the FSA, and the Ministry of Land, Infrastructure, Transport and Tourism (MLIT). The Act exempts certain cases of business enhancement through mergers and/or joint management among motor carrier service providers, regional banks or others in municipalities that may conflict with the "Act on Prohibition of Private Monopolization and Maintenance of Fair Trade." Some services provided by ride-sharing motor carrier service providers and regional banks in the respective municipalities are regarded as "essential services." These essential services are the basis for the lives and economic activities of local residents and are also difficult to be replaced by other operators/providers. The existing service providers and regional banks are facing difficulties in providing "essential services" in a sustainable manner due to reasons such as declining population.