Japanese Regulator Orders Local Revolut Unit to Improve AML Measures

by Arnab Shome
  • The company has 'serious problems' in several business areas.
  • It now needs to submit a business improvement plan to the regulator.
liquid, ftx

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 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 . 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.

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 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 . 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.

About the Author: Arnab Shome
Arnab Shome
  • 6306 Articles
  • 80 Followers
About the Author: Arnab Shome
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
  • 6306 Articles
  • 80 Followers

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