Japan AML National Action Plan 2024–2026: What Banks Must Know

AML Guide · June 2026 · RegTech

Japan’s National AML/CTF/CPF Action Plan is issued and overseen by the Inter-Ministerial Council for AML/CTF/CPF Policy, co-chaired by the National Police Agency (NPA) and the Ministry of Finance (MOF).

The Action Plan’s Five Dimensions

1. Legislative Development

The action plan commits to specific legislative amendments addressing technical compliance gaps identified in the 2021 evaluation and Japan’s 2024 follow-up report. These include amendments to the APTCP, the Payment Services Act, and related legislation. Institutions should track legislative changes as they are implemented and update their compliance programmes accordingly — legislative changes typically create new or modified compliance obligations that require programme adjustment.

2. Supervisory Enhancement

The FSA’s supervisory commitments in the action plan include intensification of on-site examination frequency and depth, with particular focus on mid-tier institutions and sectors identified as underperforming in 2021. The FSA is also committed to improving examination methodology to better assess effectiveness — moving further from checklist-based framework review toward operational performance assessment.

For mid-market institutions, this translates to: expect more frequent FSA examinations, expect deeper effectiveness assessments at those examinations, and expect examination teams to apply the methodology described in this content series.

3. International Cooperation

The action plan commits Japan to engagement with FATF, APG (Asia/Pacific Group on Money Laundering), and bilateral counterparts on ML/TF typologies, intelligence sharing, and supervisory exchange. The practical implication is that Japan’s understanding of ML/TF risk evolves through this engagement — FSA supervisory guidance will be updated as new typologies are identified, and institutions should expect periodic updates to risk guidance that may affect their risk assessment calibration.

4. Private Sector Alignment

The action plan explicitly addresses private sector compliance expectations — not merely government actions. Institutions are expected to upgrade their compliance programmes in alignment with the action plan’s priorities, not simply to wait for supervisory instruction. This is a direct signal that CCOs who cite lack of specific FSA instruction as the reason for not upgrading to a higher compliance standard will not find that argument persuasive in an examination context.

5. DNFBP Sector Development

The 2021 evaluation specifically cited DNFBPs — real estate brokers, precious metals dealers, professional services firms — as having low compliance maturity. The action plan commits to specific measures to improve DNFBP compliance quality. For financial institutions, the practical implication is that DNFBP counterparty risk assessment should include consideration of the sector’s overall compliance maturity — not assume that DNFBP counterparties have adequate AML/CTF controls.

Specific Implications for Mid-Market Institutions

Increased Supervisory Intensity

The action plan’s supervisory enhancement commitments are explicitly targeted at mid-tier institutions and underperforming sectors. CCOs at mid-market institutions that have not faced intensive FSA examination in recent years should not interpret this as evidence that their programmes will not receive scrutiny. The action plan is designed to change that pattern.

Shared Infrastructure Endorsement

The action plan specifically endorses shared AML/CTF infrastructure among regional financial institutions as a compliance strategy priority. This provides a policy basis for consortium infrastructure deployments — and creates a context in which the FSA is likely to view shared infrastructure approaches favourably in examination contexts.

Technology Adoption Expectations

The action plan notes the FSA’s expectation that mid-market institutions adopt technology-driven compliance solutions proportionate to their risk profile. Manual compliance processes are referenced as inadequate for effective AML/CTF programme delivery. Institutions that can point to technology investments aligned with action plan priorities demonstrate alignment with government policy — a factor that may be considered in examination contexts.

How to Align Your Compliance Programme with the Action Plan

Reference the action plan in compliance programme documentation and board reporting. Demonstrating that programme design reflects government AML/CTF priorities is a positive examination signal.
If considering shared infrastructure deployment, engage with the FSA’s supervisory guidance on this model. The action plan’s endorsement creates a receptive regulatory environment.
Review your compliance technology against the action plan’s technology adoption expectations. Where current systems cannot generate the effectiveness evidence the action plan requires, document this as a compliance gap with a remediation plan — not as a future consideration.
Track action plan milestones and legislative changes as they are implemented. Each legislative change potentially creates new compliance obligations. Early identification allows orderly programme adjustment rather than reactive remediation.

Frequently Asked Questions

What is Japan’s National AML/CTF Action Plan for FY2024-2026?

Japan’s National AML/CTF/CPF Action Plan for FY2024-2026 is the government’s coordinated framework for addressing 2021 FATF effectiveness gaps and preparing for the 2028 5th Round. Overseen by the Inter-Ministerial Council co-chaired by the NPA and MOF, it coordinates legislative development, supervisory enhancement, international cooperation, private sector alignment, and DNFBP sector development.

What does the action plan say about supervisory intensity for mid-market institutions?

The FSA’s supervisory commitments include intensification of on-site examination frequency and depth, with particular focus on mid-tier institutions and sectors that underperformed in 2021.

Does Japan’s national action plan endorse shared AML infrastructure?

Yes. The action plan specifically endorses shared AML/CTF infrastructure among regional financial institutions as a compliance strategy priority, and the FSA has signalled a favourable supervisory view of shared infrastructure approaches.

How should a mid-market institution demonstrate alignment with Japan’s AML/CTF action plan?

Reference the action plan in compliance programme documentation and board reporting; track and implement legislative changes as they occur; review compliance technology against action plan adoption expectations; and if considering shared infrastructure, engage with FSA supervisory guidance on the model.

What private sector compliance expectations does Japan’s national action plan set?

The action plan requires private sector institutions to upgrade compliance programmes in alignment with its priorities — not wait for specific supervisory instruction. Citing lack of explicit FSA instruction as a reason for not upgrading will not be persuasive in an examination context.