Japan FSA Slaps Mizuho over Organized Crime Dealings
Baku, September 28 (AZERTAC). Bankers at Japan`s second-largest lender, Mizuho Bank Co., lent money to crime-syndicate members for more than two years without cutting them off or alerting the authorities, the country`s financial watchdog said Friday, in the latest sign of how hard it`s been to sever dealings with the underworld here.
The transactions were small-mostly auto loans totaling around ¥200 million ($2 million), the Financial Services Agency said. But dealings with criminal groups in Japan are prohibited under a special anti-crime-syndicate law, and the way Mizuho handled matters showed "serious problems" with its compliance systems, the FSA said. The watchdog said it ordered Mizuho to submit a plan to improve its operations by October 28, an action considered a serious reprimand in Japan.
The case is the latest example of a big Japanese lender being reprimanded for violating the country`s increasingly strict rules against dealing with yakuza, or Japanese crime syndicates, which traditionally have had tight ties with business. In 2007, the FSA ordered the Bank of Tokyo-Mitsubishi UFJ, Japan`s biggest lender by asset size, to suspend some operations for a week, after it was found to have made loans to yakuza.
Japan passed laws making yakuza activity and money laundering illegal in 1991, and has been stepping up penalties and stiffening "know your client" rules ever since. Banks are now obliged to check customers` IDs and report information on money laundering, while regulators are given more authority to monitor suspected money-laundering behavior.
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