Japanese Regulator Orders Local Revolut Unit to Improve AML Measures

On Friday, Japan’s Kanto Local Finance Bureau issued a business improvement order against Revolut Technologies Japan, Inc., which is the local subsidiary of the London-headquartered fintech.

The order came after the Financial Services Agency (FSA) conducted an on-site inspection of the company, finding “serious problems” in the firm’s “control environments for governance, management of outsourced contractors, and money laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term and terrorist financing risk management.”

The regulator elaborated that the Japanese subsidiary of Revolut failed to fully establish proper governance for providing funds transfer services in a proper and steady manner. Further, the Japanese arm did not check the primary services, like funds transfer services in a proper and steady manner, it outsourced to its London-based parent.

Additionally, Revolut Japan did not develop proper checks on money laundering and terrorist financing risk management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term. In addition, it lacked a system for strict transaction verification and had no rules for determining suspicious transactions.

Improvement Orders

To rectify the issues, the Japanese regulator provided a series of business improvement orders to Revolut Japan.

The company needs to establish a controlled environment to ensure proper governance, legal compliance, management of outsourced contractors and money laundering and terrorist financing risk management.

Also, the Japanese firm needs to submit a business improvement plan to the regulator by October 3, mentioning the specific measures it is going to take based on the order and implement them immediately after the submission.

Moreover, the company has been ordered to report its progress and implementation status quarterly to the regulator until the completion of all the necessary implementations.

Meanwhile, Revolut has been aggressively expanding its global footprint. Most recently, it gained approval from the regulator in Cyprus for offering cryptocurrency services.