Japan's FSA Orders Aeon Bank to Reform Anti-Money Laundering Measures

Japan's Financial Services Agency (FSA) has issued a business improvement order to Aeon Bank, the first bank to face administrative action in the FSA's ongoing inspections of financial institutions' anti-money laundering measures. The FSA cited significant deficiencies, including the failure to properly screen over 14,639 transactions, and indicated that the bank's management had not adequately addressed previous calls for improvement. Aeon Bank has until the end of January to submit a detailed plan to enhance its risk management and anti-money laundering systems. The action follows a 2021 report from the Financial Action Task Force, which found Japan's efforts in combating money laundering insufficient, particularly among regional banks. The FSA has been intensively reviewing these measures since 2021, emphasizing the need for stronger compliance across the financial sector. This order reflects a broader push for accountability and improvement within Japan's banking industry.