TOKYO -- The Financial Services Agency (FSA) has decided to conduct an onsite investigation as early as mid-September of Saitamaken Shinkin Bank on suspicion that it was used to launder roughly 1.87 billion yen in 2016-2017 by sending the funds abroad.
Neither the company that made the transfer nor the companies which received the money are actually in business, and it is possible that some of the companies receiving the money have ties to North Korea. The FSA is moving to confirm the details of a potentially serious deficiency in the bank's screening system that appears to have left the door open for the money laundering operation.
According to a person familiar with the FSA investigation, from May 2016 to January 2018, Saitamaken Shinkin Bank, based in Kumagaya, Saitama Prefecture, northwest of Tokyo, made a total of 23 bank transfers to foreign recipients in U.S. dollars, Hong Kong dollars, and Japanese yen on behalf of an auto import-export company in the prefectural town of Tokigawa. The total amount moved equaled roughly 1.87 billion yen, based on the exchange rates at the time of the transfers. The receiving companies were mainly based in Hong Kong, but there were also transfers made to the United Arab Emirates, Indonesia, Taiwan, and Brazil.
The president of the car import-export company was a man from Bangladesh who acquired Japanese citizenship in 2017, and he told the bank that he was acting as an agent for a Bangladeshi trading firm, declaring that the reason for each transfer was "intermediary trade." On the documents related to the money wired, it is written that the funds were for the cost of importing items such as used ships, sugar, rice, and tobacco.
However, an internal inspection by Saitamaken Shinkin Bank in February this year uncovered one case after another where both the source of the wired money and the business receiving the funds was unclear. When the FSA investigated the situation after receiving a report, many other suspicious points, such as the same amount of money being sent simultaneously, were uncovered, and suspicion that the trade itself was a facade grew stronger. There were even exchanges with companies that are suspected of doing business with North Korean firms included on the list of recipients.
At the registered address of the auto import-export company's headquarters is an unrelated firm that repairs and sells used cars, and there is a possibility that the firm that requested the transfers exists only on paper. The FSA is looking into the possibility that the company was used for money laundering.
Asked for comment, a representative from the compliance supervision department of Saitamaken Shinkin Bank told the Mainichi Shimbun, "We cannot answer questions about individual transactions. We will continue to improve our monitoring system."
(Japanese original by Takashi Narumi, Business News Department)