Japan's Financial Services Agency issued a business improvement order to AEON Bank, Ltd. on 26 December 2024, citing the bank's failure to review thousands of transactions flagged by its own automated monitoring system and its chronic delays in submitting suspicious transaction reports to the authorities.
The FSA found that AEON Bank left at least 14,639 transactions flagged by its automated anti-money-laundering monitoring system without making a determination as to whether they constituted suspicious activity. The unreviewed transactions were identified across two separate periods—June to November 2023 and July to September 2024.
REPORTING DELAYS AND COMPLIANCE FAILURES
Beyond the unreviewed flagged transactions, the FSA identified delays in the bank's reporting of suspicious activity to the relevant competent authorities. AEON Bank had taken increasingly long to report suspicious transactions since May 2023, with the monthly average lag peaking at 152 days in February 2024. Suspicious transaction reporting is required under Japan's Act on Prevention of Transfer of Criminal Proceeds.
AEON Bank is the banking arm of Japan's AEON Group, whose operations include supermarkets and shopping centres.
FSA MANDATES IMPROVEMENT PLAN
Under the terms of the business improvement order, AEON Bank was required to submit a formal business improvement plan to the FSA by 31 January 2025, about five weeks after the order was issued. The bank is also required to submit quarterly progress reports to the agency.
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