{"id":600,"date":"2026-06-02T10:00:00","date_gmt":"2026-06-02T00:00:00","guid":{"rendered":"https:\/\/nexiant.ai\/resources\/blogs\/foreign-exchange-act-screening-japan-cross-border\/"},"modified":"2026-06-25T12:13:49","modified_gmt":"2026-06-25T02:13:49","slug":"foreign-exchange-act-screening-japan-cross-border","status":"publish","type":"post","link":"https:\/\/nexiant.ai\/resources\/blogs\/foreign-exchange-act-screening-japan-cross-border\/","title":{"rendered":"Foreign Exchange Act Screening: Cross-Border Transaction Obligations for Japanese Banks and Remittance Providers"},"content":{"rendered":"\n<style>\n  .nx-blog * { box-sizing: border-box; margin: 0; padding: 0; }\n\n  .nx-blog {\n    font-family: -apple-system, BlinkMacSystemFont, 'Segoe UI', Roboto, sans-serif;\n    font-size: 16px;\n    line-height: 1.75;\n    color: #1a1a2e;\n    max-width: 860px;\n    margin: 0 auto;\n  }\n\n  .nx-blog h2 {\n    font-size: 1.55rem;\n    font-weight: 700;\n    color: #00184C;\n    margin: 2.6rem 0 0.8rem;\n    padding-bottom: 0.45rem;\n    border-bottom: 3px solid #073EA1;\n  }\n\n  .nx-blog h3 {\n    font-size: 1.15rem;\n    font-weight: 700;\n    color: #073EA1;\n    margin: 1.5rem 0 0.45rem;\n  }\n\n  .nx-blog h4 {\n    font-size: 0.95rem;\n    font-weight: 700;\n    color: #00184C;\n    margin-bottom: 0.35rem;\n  }\n\n  .nx-blog p { margin-bottom: 1rem; 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margin-bottom: 0.35rem; }\n\n  .nx-sector-card p {\n    font-size: 0.84rem;\n    color: #444;\n    line-height: 1.6;\n    margin-bottom: 0.75rem;\n  }\n\n  .nx-sector-card ul { margin: 0 0 0 1rem; }\n\n  .nx-sector-card li {\n    font-size: 0.8rem;\n    color: #555;\n    line-height: 1.5;\n    margin-bottom: 0.25rem;\n  }\n\n  \/* \u2500\u2500 Tables \u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500 *\/\n  .nx-table-wrap {\n    overflow-x: auto;\n    margin: 1.25rem 0 1.85rem;\n  }\n\n  .nx-table {\n    width: 100%;\n    border-collapse: collapse;\n    font-size: 0.9rem;\n  }\n\n  .nx-table thead tr {\n    background: #00184C;\n    color: #fff;\n  }\n\n  .nx-table th {\n    text-align: left;\n    padding: 10px 14px;\n    font-weight: 600;\n  }\n\n  .nx-table td {\n    padding: 10px 14px;\n    border-bottom: 1px solid #e0e7f5;\n    color: #1a1a2e;\n    vertical-align: top;\n  }\n\n  .nx-table tbody tr:nth-child(even) { background: #f5f8ff; 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color: #00184C; font-size: 0.92rem; }\n\n  \/* \u2500\u2500 FAQ \u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500 *\/\n  .nx-faq { margin: 1.25rem 0 1.85rem; }\n\n  .nx-faq-item {\n    border: 1px solid #d0daf5;\n    border-radius: 8px;\n    margin-bottom: 8px;\n    overflow: hidden;\n  }\n\n  .nx-faq-q {\n    width: 100%;\n    background: #fff;\n    border: none;\n    text-align: left;\n    padding: 1rem 1.25rem;\n    font-size: 0.95rem;\n    font-weight: 600;\n    color: #00184C;\n    cursor: pointer;\n    display: flex;\n    justify-content: space-between;\n    align-items: center;\n    gap: 1rem;\n  }\n\n  .nx-faq-q:hover { background: #f5f8ff; }\n\n  .nx-faq-q .nx-chevron {\n    flex-shrink: 0;\n    width: 20px;\n    height: 20px;\n    border-radius: 50%;\n    background: #EEF2FF;\n    display: flex;\n    align-items: center;\n    justify-content: center;\n    transition: transform 0.25s;\n  }\n\n  .nx-faq-q .nx-chevron svg {\n    width: 10px;\n    height: 10px;\n    stroke: #073EA1;\n    fill: none;\n  }\n\n  .nx-faq-q[aria-expanded=\"true\"] .nx-chevron {\n    transform: rotate(180deg);\n    background: #073EA1;\n  }\n\n  .nx-faq-q[aria-expanded=\"true\"] .nx-chevron svg { stroke: #fff; 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}\n\n  \/* \u2500\u2500 Misc \u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500\u2500 *\/\n  .nx-divider {\n    border: none;\n    border-top: 1px solid #e0e7f5;\n    margin: 2rem 0;\n  }\n\n  .nx-disclaimer {\n    font-size: 0.8rem;\n    color: #888;\n    font-style: italic;\n    text-align: center;\n    margin-top: 1.5rem;\n  }\n\n  @media (max-width: 760px) {\n    .nx-summary-panel,\n    .nx-path-grid,\n    .nx-scope-strip,\n    .nx-service-check { grid-template-columns: 1fr; }\n\n    .nx-readiness-row { grid-template-columns: 1fr; }\n\n    .nx-grid { grid-template-columns: 1fr; }\n  }\n<\/style>\n<div class=\"nx-blog\">\n<div class=\"nx-hero\">\n  <span class=\"nx-tag\">Screening Guide &nbsp;\u00b7&nbsp; June 2026 &nbsp;\u00b7&nbsp; RegTech<\/span>\n  <p class=\"nx-meta\">FEFTA (\u5916\u70ba\u6cd5) operates in parallel with the APTCP as a distinct regulatory obligation.<\/p>\n<\/div>\n<h2><span class=\"ez-toc-section\" id=\"The_Core_%C2%A5100000_Screening_Obligation\"><\/span>The Core \u00a5100,000 Screening Obligation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Article 17-3 of FEFTA and related cabinet orders require Japanese financial institutions to conduct sanctions screening on overseas remittances above \u00a5100,000. At the point of each qualifying transfer, the institution must confirm:<\/p>\n<ul><li>The remittance originator is not a designated person or entity under FEFTA or applicable UNSC resolutions.<\/li><li>The remittance beneficiary is not a designated person or entity.<\/li><li>The transaction does not involve controlled goods, services, or technology that require authorisation under FEFTA&#8217;s export control provisions.<\/li><\/ul>\n<p>The \u00a5100,000 threshold applies per transaction. There is no annual cumulative threshold, and there is no aggregation provision \u2014 each qualifying transaction triggers the obligation independently of the customer&#8217;s total transaction volume over any given period.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Transaction-Level_vs_Relationship-Level_Screening\"><\/span>Transaction-Level vs Relationship-Level Screening<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>One of the most common FEFTA compliance gaps at mid-market institutions is the conflation of relationship-level screening (conducted at customer onboarding when the correspondent banking or customer relationship is established) with the transaction-level screening obligation that FEFTA creates.<\/p>\n<p>Screening a customer&#8217;s counterparties at the time a correspondent banking relationship is established does not satisfy the obligation to screen each qualifying cross-border transaction as it occurs. The reason is straightforward: sanctions designations change. A beneficiary bank or individual that was undesignated when the relationship was established may be designated subsequently. Unless each qualifying transaction is screened at execution against current list versions, the institution carries compliance risk on every transaction processed between the designation date and the next scheduled re-screening.<\/p>\n<p>FEFTA compliance requires one of the following architectures:<\/p>\n<ul><li>Real-time transaction-point screening: every qualifying overseas remittance is screened against current list versions at the moment of execution, before the transfer is released.<\/li><li>Continuous monitoring with immediate transaction halt: the customer book is continuously monitored against real-time list updates, and any match triggers an immediate review process that includes evaluation of pending transactions.<\/li><\/ul>\n<h2><span class=\"ez-toc-section\" id=\"OFAC_Secondary_Sanctions_A_Parallel_Obligation\"><\/span>OFAC Secondary Sanctions: A Parallel Obligation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>FEFTA screening operates alongside \u2014 not as a substitute for \u2014 OFAC compliance obligations for Japanese institutions with US dollar correspondent banking relationships. OFAC&#8217;s secondary sanctions programmes \u2014 Global Magnitsky, sectoral sanctions, and country-specific designations \u2014 can apply to transactions processed through US correspondent accounts even where neither the Japanese institution nor its customer is a US person.<\/p>\n<p>The legal exposure arises when a Japanese institution processes a USD-denominated cross-border transaction through a US correspondent bank, where the originator or beneficiary is on the OFAC SDN list. The US correspondent bank faces primary OFAC exposure; the Japanese institution faces secondary sanctions risk through its correspondent relationship.<\/p>\n<p>Japanese institutions processing USD transactions should maintain OFAC screening as an independent parallel obligation, with documented screening records for each qualifying transaction covering both FEFTA and OFAC list coverage.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Funds_Transfer_Service_Providers_Enhanced_Obligations\"><\/span>Funds Transfer Service Providers: Enhanced Obligations<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Registered funds transfer service providers (\u8cc7\u91d1\u79fb\u52d5\u696d\u8005) under the Payment Services Act carry both the FEFTA cross-border screening obligations described above and the Travel Rule requirement under FATF Recommendation 16. For qualifying transfers, funds transfer providers must:<\/p>\n<ul><li>Screen each transaction against applicable sanctions lists under FEFTA before execution.<\/li><li>Collect, verify, and transmit originator and beneficiary information (full name, account number, and \u2014 for international transfers \u2014 address or identification number) with the transfer, in compliance with the Travel Rule.<\/li><li>Maintain records of all originator and beneficiary information transmitted for five years.<\/li><\/ul>\n<p>Meeting both obligations simultaneously requires integrated systems \u2014 the FEFTA screening, Travel Rule data collection, and record retention cannot each run as separate manual workflows without creating gaps and inconsistencies.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Documentation_Requirements\"><\/span>Documentation Requirements<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Each FEFTA-mandated screening event must be documented with the following:<\/p>\n<ul><li>The date and time of the screening.<\/li><li>The specific lists screened and their version or update date at the time of screening.<\/li><li>The result of the screening \u2014 clear result, or alert with disposition notes including the reviewing officer&#8217;s identity and the basis for the clearance decision.<\/li><li>The approving officer&#8217;s identity for transactions where a near-match alert was reviewed and cleared.<\/li><\/ul>\n<p>This documentation must be retained for the period required by FEFTA \u2014 typically five years \u2014 and be retrievable and presentable to the FSA on request within a reasonable timeframe. Institutions relying on manual documentation of individual transactions face both operational risk and evidence quality limitations as transaction volumes grow.<\/p>\n\n<hr class=\"nx-divider\">\n<h2><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions\"><\/span>Frequently Asked Questions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div class=\"nx-faq\">\n<div class=\"nx-faq-item\">\n  <button class=\"nx-faq-q\" aria-expanded=\"false\">What is the FEFTA sanctions screening obligation for Japanese banks?<span class=\"nx-chevron\"><svg viewBox=\"0 0 10 6\" stroke-width=\"1.5\" stroke-linecap=\"round\" stroke-linejoin=\"round\"><path d=\"M1 1l4 4 4-4\"\/><\/svg><\/span><\/button>\n  <div class=\"nx-faq-a\">FEFTA Article 17-3 requires banks and registered funds transfer providers to screen all overseas remittances above \u00a5100,000 against applicable sanctions lists \u2014 including Japanese government lists, UNSC designations, and OFAC for USD transactions \u2014 before processing each transfer.<\/div>\n<\/div>\n<div class=\"nx-faq-item\">\n  <button class=\"nx-faq-q\" aria-expanded=\"false\">Does screening a customer at onboarding satisfy the FEFTA transaction screening requirement?<span class=\"nx-chevron\"><svg viewBox=\"0 0 10 6\" stroke-width=\"1.5\" stroke-linecap=\"round\" stroke-linejoin=\"round\"><path d=\"M1 1l4 4 4-4\"\/><\/svg><\/span><\/button>\n  <div class=\"nx-faq-a\">No. FEFTA requires screening at the point of each qualifying transaction. Sanctions designations change over time. A beneficiary undesignated at onboarding may be designated subsequently. Each qualifying transaction must be screened against current list versions at the time of execution.<\/div>\n<\/div>\n<div class=\"nx-faq-item\">\n  <button class=\"nx-faq-q\" aria-expanded=\"false\">Do Japanese financial institutions need to comply with OFAC sanctions?<span class=\"nx-chevron\"><svg viewBox=\"0 0 10 6\" stroke-width=\"1.5\" stroke-linecap=\"round\" stroke-linejoin=\"round\"><path d=\"M1 1l4 4 4-4\"\/><\/svg><\/span><\/button>\n  <div class=\"nx-faq-a\">Japanese institutions are not directly subject to US law. However, those processing USD transactions through US correspondent relationships carry OFAC secondary sanctions exposure \u2014 if a transaction involves an SDN-designated party processed through a US correspondent, secondary sanctions risk arises.<\/div>\n<\/div>\n<div class=\"nx-faq-item\">\n  <button class=\"nx-faq-q\" aria-expanded=\"false\">What additional AML obligations apply to registered funds transfer service providers?<span class=\"nx-chevron\"><svg viewBox=\"0 0 10 6\" stroke-width=\"1.5\" stroke-linecap=\"round\" stroke-linejoin=\"round\"><path d=\"M1 1l4 4 4-4\"\/><\/svg><\/span><\/button>\n  <div class=\"nx-faq-a\">Funds transfer providers carry both the FEFTA transaction screening obligation and the Travel Rule requirement under FATF Recommendation 16. Meeting both simultaneously requires integrated systems \u2014 they cannot run as separate manual workflows.<\/div>\n<\/div>\n<div class=\"nx-faq-item\">\n  <button class=\"nx-faq-q\" aria-expanded=\"false\">What sanctions screening records are required under FEFTA?<span class=\"nx-chevron\"><svg viewBox=\"0 0 10 6\" stroke-width=\"1.5\" stroke-linecap=\"round\" stroke-linejoin=\"round\"><path d=\"M1 1l4 4 4-4\"\/><\/svg><\/span><\/button>\n  <div class=\"nx-faq-a\">For each screening event: the date and time, the specific lists screened and their update date, the screening result, and the identity of the reviewing officer where a near-match was assessed and cleared. Records must be retained for five years.<\/div>\n<\/div>\n<\/div>\n<div class=\"nx-cta\">\n  <h3>Foreign Exchange Act Screening Japan: FEFTA Guide | Nexiant<\/h3>\n  <p>Japan&#8217;s FEFTA requires sanctions screening of all overseas remittances above \u00a5100,000. A practical guide to the transaction-level obligation for banks and remittance providers.<\/p>\n  <a href=\"https:\/\/nexiant.ai\/contact-us\/\">Speak to our team<\/a>\n<\/div>\n<p class=\"nx-disclaimer\">This article was accurate at the time of publication in June 2026 and is intended for general informational purposes only. It does not constitute legal, regulatory or compliance advice. Organisations should seek qualified professional guidance in relation to their specific obligations.<\/p>\n<\/div>\n<script>\n  document.querySelectorAll('.nx-faq-q').forEach(function(btn) {\n    btn.addEventListener('click', function() {\n      var expanded = this.getAttribute('aria-expanded') === 'true';\n      this.setAttribute('aria-expanded', String(!expanded));\n      this.nextElementSibling.classList.toggle('open', !expanded);\n    });\n  });\n<\/script>\n<script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"FAQPage\",\n  \"mainEntity\": [\n    {\n      \"@type\": \"Question\",\n      \"name\": \"What is the FEFTA sanctions screening obligation for Japanese banks?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"FEFTA Article 17-3 requires banks and registered funds transfer providers to screen all overseas remittances above \u00a5100,000 against applicable sanctions lists \u2014 including Japanese government lists, UNSC designations, and OFAC for USD transactions \u2014 before processing each transfer.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Does screening a customer at onboarding satisfy the FEFTA transaction screening requirement?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"No. FEFTA requires screening at the point of each qualifying transaction. 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This guide covers the obligation, OFAC exposure, and documentation requirements.<\/p>\n","protected":false},"author":2,"featured_media":629,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_aioseo_title":"Foreign Exchange Act Screening Japan: FEFTA Guide | Nexiant","_aioseo_description":"Japan's FEFTA requires sanctions screening of all overseas remittances above \u00a5100,000. A practical guide to the transaction-level obligation for banks and remittance providers.","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[15,56,54],"tags":[],"class_list":["post-600","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-risk-management","category-japan","category-regtech"],"blocksy_meta":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/nexiant.ai\/resources\/blogs\/wp-json\/wp\/v2\/posts\/600","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nexiant.ai\/resources\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nexiant.ai\/resources\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nexiant.ai\/resources\/blogs\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/nexiant.ai\/resources\/blogs\/wp-json\/wp\/v2\/comments?post=600"}],"version-history":[{"count":1,"href":"https:\/\/nexiant.ai\/resources\/blogs\/wp-json\/wp\/v2\/posts\/600\/revisions"}],"predecessor-version":[{"id":630,"href":"https:\/\/nexiant.ai\/resources\/blogs\/wp-json\/wp\/v2\/posts\/600\/revisions\/630"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nexiant.ai\/resources\/blogs\/wp-json\/wp\/v2\/media\/629"}],"wp:attachment":[{"href":"https:\/\/nexiant.ai\/resources\/blogs\/wp-json\/wp\/v2\/media?parent=600"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nexiant.ai\/resources\/blogs\/wp-json\/wp\/v2\/categories?post=600"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nexiant.ai\/resources\/blogs\/wp-json\/wp\/v2\/tags?post=600"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}