Public Comment,Publication of the finalized "the Partial Amendment to the Designation of a country or region under Articles 17-2 and 17-3 of the Order for Enforcement of the Act on Prevention of Transfer of Criminal Proceeds" after public consultation

What Changed

• - Japan has finalized a partial amendment to the list of designated countries/regions under Articles 17-2 and 17-3 of the Order for Enforcement of the Act on Prevention of Transfer of Criminal Proceeds (APTCP), specifically for travel rule applicatio
• The amendment expands the set of foreign jurisdictions for which Japanese firms must apply travel rule obligations when transferring cryptoassets and electronic payment instruments to foreign VASPs, adding five new jurisdictions to the scope.
• For transfers of cryptoassets and electronic payment instruments from Japanese VASPs to foreign VASPs, travel rule obligations apply only when the counterparty VASP is located in a jurisdiction designated as having travel rule regulations equivalent
• Transfers to foreign VASPs in non-designated jurisdictions remain outside the Japanese travel rule transmission obligation, reflecting JFSA’s concern about regulatory ineffectiveness where equivalent requirements are not in place.
• The amendment confirms that the travel rule applies to both cryptoassets (virtual assets, VAs) and electronic payment instruments, including stablecoins (SCs) handled by Cryptoasset Exchange Service Providers and Electronic Payment Instrument Exchang
• The legal change consolidates Japan’s implementation of the FATF Recommendation 16-based crypto travel rule by aligning its jurisdiction list with the global rollout status of travel rule regulations in other countries or regions.

Suggested Considerations

• Review and obtain the official Attachment to identify the five newly added jurisdictions and verify their exact legal names and any specific conditions attached to their designation.
• Update internal jurisdiction lists and travel rule mapping to reflect all currently designated countries and regions under Articles 17-2 and 17-3, including the newly added five jurisdictions, ensuring that this mapping is embedded in transaction routing and screening engines.
• Revise travel rule implementation procedures so that originator and beneficiary information is consistently transmitted for all transfers of cryptoassets and electronic payment instruments from Japanese VASPs to foreign VASPs located in designated jurisdictions, including the new additions.
• Confirm that no de minimis threshold is applied in practice to covered transactions and that systems are configured to send travel rule data regardless of transaction size when the counterparty is in a designated jurisdiction.
• Update customer and counterparty onboarding documentation and contractual terms for foreign VASPs in newly designated jurisdictions to reflect their status as travel rule counterparties and any data-sharing, security, and retention requirements.
• Conduct an impact assessment of cross-border crypto and stablecoin flows, identifying transactions that will newly fall within the travel rule scope due to the additional jurisdictions and quantifying system and operational impacts.

Key Dates

Who is Affected