Harmonization of Regulations on Beneficial Ownership in the European Union and Japan: a Comparative Legal Analysis and Implications for Global AML Effectiveness

Abstract

This article presents a comparative legal analysis of regulations on beneficial owners (BO) in the European Union and Japan. The European Union is characterized by centralized registers resulting from AMLD IV, V, and VI, as well as the forthcoming Regulation (EU) 2024/1624. Although the 2022 Court of Justice of the European Union (CJEU) judgment restricted public access to these registers, centralization is still generally regarded as significantly facilitating the identification of hidden ownership structures. Meanwhile, despite participating in FATF initiatives, Japan maintains a decentralized system based on the Act on Prevention of Transfer of Criminal Proceeds and detailed guidelines of the Financial Services Agency. On the one hand, this provides a high level of privacy protection, but on the other, it leads to difficulties in the rapid verification of BO data and in cross-border cooperation. The analysis indicates that the lack of harmonization—stemming partly from cultural differences—encourages regulatory arbitrage, thereby undermining the global effectiveness of anti-money laundering and counter-terrorist financing measures. As a result, legal loopholes emerge that may be exploited by entities engaged in illicit transactions, demonstrating the necessity for further harmonization of regulations.

Affiliated Institutions

• War Studies Academy PL

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