The Act on Prevention of Transfer of Criminal Proceeds is the core anti-money-laundering law in Japan, and it also covers terrorist financing. It was promulgated in 2007 (Act No. 22 of 2007) and came into full effect in 2008. It requires "specified businesses" such as banks and other financial institutions to verify customer identity (KYC), keep transaction records, and report suspicious transactions.
One point is easily confused: the rules that punish signing up for a phone under another person's name, or handing a handset over to someone else, are not in this Act. They sit in the Act on Prevention of Improper Use of Mobile Voice Communications Services (Act No. 31 of 2005). As of August 2026, that Act punishes transferring a handset for value as a business without the carrier's consent with up to 2 years in prison or a fine of up to 3 million yen (Article 20), and transferring a handset whose contract is in another person's name with a fine of up to 500,000 yen (Article 21). Special fraud groups rely on "burner phones" registered under other people's names, so the two laws work as a pair: the mobile phone act covers the identity check when a line is signed up (Article 3) and punishes the transfer itself, while the Criminal Proceeds Act requires banks and other specified businesses to verify identity, keep transaction records and report suspicious transactions, closing off the accounts that criminal proceeds would flow through.
Trading bank accounts is what the Criminal Proceeds Act itself covers. Accounts used to receive money in transfer fraud are often bought from people in financial difficulty. Both the seller and the buyer are punished: as of August 2026, Article 26 provides up to 3 years in prison or a fine of up to 5 million yen, or both, for handing over or receiving a passbook or cash card, rising to 5 years or 10 million yen when it is done as a business. Soliciting or advertising such deals is an offence in itself, so responding to a pitch like "just lend us the account you never use" or "you get a rental fee" already puts you on the offending side.
The list of specified businesses has widened in stages. Crypto-asset exchange operators, called virtual currency exchanges at the time, were added in April 2017, and issuers of prepaid payment instruments capable of high-value electronic transfers followed in June 2023, extending identity verification duties to those services. Together with the Fraud Relief Act, prevention and victim recovery are tackled from both ends. See the guide to preventing transfer fraud for practical steps.