Fox on getting interrogated at Sumitomo Prestia Bank in Kobe. Thanks to new FSA regulations that encourage even more racial profiling.


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Hi Blog.  My old friend Fox in Japan writes in with a tale of being, as he puts it, “interrogated” at the bank for trying to send $500 overseas while foreign.  And if you think the claim “while foreign” is a bit of an exaggeration, has numerous records of racial profiling by Japanese banks for sending or receiving funds (or exchanging money) of even minuscule amounts (such as 500 yen).

New regulations, however, require a “risk-based approach” (which is, according to the Nikkei, recommended but not required), meaning the scale of “risk” depends on how much money the sender/receiver has in that bank.  Or as the Nikkei puts it, “Consider a customer with a direct payroll deposit of 300,000 yen ($2,660) a month who receives 200 million yen from an overseas bank. The government would require that the bank not only follow up confirming the identity of the person withdrawing the funds, but also check the deposit history and what the cash will be used for.”  Meaning that this is no longer a matter of transfer amount — i.e., a large transfer of 5,000,000 yen (later 2,000,000 yen) used to raise flags while smaller transfers didn’t.  (Japan’s FSA Guidelines of 2018 mention no money amount whatsoever.)

The problem now becomes, without an objective minimum transfer amount to be flagged, that any “foreigner” can be arbitrarily deemed “risky” at any time simply by dint.  It encourages racial profiling even further, in addition to what you already have at Japan’s hotels and other public accommodation, police instant ID checkpoints, and tax agencies.  (See here too).  More Embedded Racism.  Debito Arudou Ph.D.


Interrogation at the Bank
By Fox in Japan, March 14, 2019

Dropped into Sumitomo Prestia in Kobe to send a telegraphic transfer to a friend in Africa. Completed the form two days ago, but the IBAN number was incorrect. Brought the corrected form in today. Under the category of “purpose,” I have written in “education fees.” The amount is $500. The following dialogue ensued. We are speaking in Japanese.

T= teller

T: So this if for “gakuhi” (tuition)?
M: Yes.
T: And who is the person receiving the transfer?
M: A friend.
T: Is this money for your own child’s education expenses?
M: No.
T: Who is it for?
M: My friend’s child.

The bank teller’s face becomes pained. This the stereotypical expression indicating that a request will be rejected. My blood slowly starts to boil.

T: Have you ever sent money to this person before?
M: Yes, during the days of Citibank.

(Note: Prestia took over Citibank some years ago).

T: Well, things have changed since then.

M: Is that right?

T: Hmm, so you are not sending this for your own child?
M: No.

T: Well, what is your relationship with this person.
M: He is a friend.

(More pained looks)

T: So, you are sending this to someone you know?

M: Yes, that’s what I just told you.

T: Is this a gift?
M: It might be.

T: Well, is it, or is it not?

M: What is the purpose of the question?

T: We have strict rules now about money being sent overseas.

M: Look, this is only $500, not five hundred man ($45,000). Listen. (My voice rises to crescendo, and the bank is extraordinarily quiet.) I was in your Osaka branch two days ago and they did not ask me any of these questions.

T: They didn’t?

M: No. I am not going to answer any more questions. Please call the branch manager!

A woman who has overheard this heated exchange conversation sneaks out of the office and the two begin to chat.

T: Please be seated.

The women exchange words and the original teller is on the phone.

Some ten minutes later, I am called back to the counter.

T: We just phoned the Osaka branch and they admit that they did not question the purpose of the transaction.

M: Is that right? (Ah soo desu ka)

T: The branch in Osaka said that you looked up some information on your computer when at the counter.

M: Uh-huh.

T: Well, we have very stringent rules now. If it is not for your own child, then….do you have an invoice “seikyusho” for the school expenses?

M: I certainly do not.

T: For your own children, sending money is OK, but for other’s children, it is …

M: Should I change the purpose to “living expenses then?”

(Note- I have frequently sent money overseas for this purpose-without any hassle.)

The teller looks bewildered.

T: Is it for living expenses, you said it was for educational expenses.

M: Yeah, that’s right.

In the end I succeeded and the money was sent.

I looked around at other customers in the bank, all Japanese, all of whom look very sunao. I wonder how they would react to the teller’s questions? Would they just say “shigata ga nai,” and walk away? And then forget that a bright young promising social science student in Malawi will soon be tossed out of college?

On the other hand, who knows if Japanese countrymen are even being interrogated like this? Has a directive been issued to hassle foreigners-all of whom are likely prone to money laundering?

But in fact, harassment it is. Financial transactions, both local and international, are regulated by strict laws. Not policies, but laws. My transaction was completed, and this means that it was perfectly legal. Apparently, Prestia has a policy of harassing customers (certainly foreign customers) who wish to send even even low amounts of money overseas.

Are all foreign clients of the bank potential money launderers? I urge all good people to stand up and question authority.  

Sincerely, Fox in Japan


The referenced Nikkei articles, for the record:

Japan to strengthen money-laundering guidelines
Banks adopting a risk-based approach to flag suspicious actions

TOKYO — Japan will issue new guidelines against money laundering in an effort to prevent funds from getting into the hands of terrorist and criminal organizations and to shake its reputation as weak on dirty money.

The Financial Services Agency is expected to announce the rules soon and implement them as early as January. Currently, Japan’s law preventing the transfer of criminal proceeds only says that suspicious transactions should be reported to authorities after the fact. Risk-based approaches are recommended but not required.

But the agency will now demand that financial institutions use a risk-based approach. Consider a customer with a direct payroll deposit of 300,000 yen ($2,660) a month who receives 200 million yen from an overseas bank. The government would require that the bank not only follow up confirming the identity of the person withdrawing the funds, but also check the deposit history and what the cash will be used for.

Although it is difficult to tell whether an account is related to criminal activity when first opened, this proactive approach identifies high-risk transactions early so that they can be continuously monitored.

The agency will verify that financial institutions are following the guidelines through questioning and on-site inspections. It will also order operational improvements to be made if it catches lax compliance that could invite money laundering.

The Financial Action Task Force, an intergovernmental body that combats money laundering, plans to examine Japan’s financial sector in 2019, the year before the Tokyo Olympics. Public and private institutions are cooperating to strengthen their prevention systems.

Japan’s FSA beefs up anti-money laundering measures
Financial regulator highlights steps taken ahead of visit by international watchdog
TAKERO MINAMI, Nikkei staff writer

TOKYO — The Financial Services Agency has made anti-money laundering measures a top priority in its annual policy report as it braces for inspections by an intergovernmental watchdog next spring.

The latest guidelines, which outline steps the regulator is taking over the next 12 months, highlight measures against money laundering and terrorism funding, including on-site inspections of financial institutions.

The Financial Action Task Force has previously criticized Japan for insufficient legal safeguards against money laundering. The government hopes to clean up its tarnished image, particularly as it will host the Group of 20 summit next year.

Financial authorities around the world are taking steps to prevent countries under United Nations sanctions, such as North Korea, from conducting prohibited transactions. Japan wants to avoid becoming a target for international criticism again.

The report urges financial institutions to take steps to halt money laundering, requiring them to identify and analyze the risks associated with certain types of transactions, such as the stated purpose of cross-border cash transfers, customer attributes and countries of origin or destination.

In February, the FSA issued anti-money laundering guidelines and directed smaller financial institutions such as regional banks and shinkin banks to conduct emergency inspections. To close the loopholes on overseas remittances, the policy requires institutions to come up with plans to train staff.

“Our inspections have shown that many financial institutions still fall short of requirements,” said an FSA official. “Stopgap measures will not be enough, and regional banks should put anti-money laundering measures at the top of their agenda,” said another senior FSA official.

Japan is not the only country to have run into problems over money laundering. Danske Bank, Denmark’s largest bank, faces allegations that its Estonian unit illegally remitted as much as $230 billion, forcing CEO Thomas Borgen to resign.

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14 comments on “Fox on getting interrogated at Sumitomo Prestia Bank in Kobe. Thanks to new FSA regulations that encourage even more racial profiling.

  • Money Smuggler says:

    Half jokingly: I saw this coming…

    But speaking seriously, everyone who is considering moving out of the country eventually, in the I’m-not-sure-how-likely event of having similar problems while transferring your whole bank balance outside Japan, please consider getting out large amounts of cash* every time you go (back|to your next) home.

    *As of December last year, up to 1 million JPY could be brought outside Japan without declaring anything. However, keep in mind the other end of the trip as well. For example, as of December last year, the EU allowed bringing up to 10000 EUR without any customs declarations – which is more than 1 million JPY, but your destination’s regulations may vary.

  • Jim Di Griz says:

    I used to use the Citi Bank in Japan all the time to send money to relatives back home (mainly to reimburse them for something they sent me) and to have some savings outside of Japan. All the bank staff could speak English and were very polite. It was very simple, and could be done 24/7 by depositing the cash in the banks ATM in the foyer and then using the phone next to the ATM to transfer the cash by speaking to an English speaking operator at the bank. Took 5 minutes.

    Then SMBC bought out Citi Bank as Citi left Japan in the face of Abe’s economic nationalism.
    When it became Prestia, all the English speaking staff disappeared, the 24/7 phone service stopped (even in Japanese), and every time I went in to send money overseas it was like opening a new bank account from scratch; mountains of forms to fill in and hours of waiting. And they stopped accepting my signature and started demanding my ‘My Number’ number.
    It was so much hassle. But I guess that’s the point; what’s the use in accepting NJ workers to ‘boost’ your economy if you’re going to let them send money outside of Japan? The money HAS to stay in Japan (of course, this overlooks the Japanese sending a couple of million ¥ to their kids studying abroad).

    Who has time for that? Citi Bank didn’t. They saw My Number coming and decided that wasn’t how they were going to do business.

    When I send money home, I always say it’s ‘savings’ if it goes to my bank account, or ‘a gift’ if I send to someone else, and the staff never bat an eyelid.

    But yeah, Prestia doesn’t like NJ. They are a ‘prestige’ banking operation for ‘well heeled’ and ‘internationally connected’ elite wannabe Japanese. They don’t want lowly NJ residents using their services.

    • Loverilakkuma says:

      Yes, I found out that my saving account has been blocked due to ‘My Number’ requirement for foreign transaction. It became effective as of Jan.1, 2019. So, I’ll have to fill out the form and mail it to clear this off. Not a big deal to me, personally, but I understand why this adds another hurdle to NJ customers.

      If you already have a bank account with Citi/SMBC Prestia, I suggest you switch to online money transfer so that you can save time by avoiding nuisance from a robotic teller. If not, I think you can still open an account online if you have a registered address in Japan(Unfortunately, there are some exceptions.)

      My biggest concern so far is that they still hold the previous restriction applied to particular NJ, retroactive from the period of CitiBank ownership. That is, if you are a US tax resident (a legal citizen, resident alien, or a green card holder), you cannot open a bank account online. This is problematic since SMBC is a local/domestic bank. They are not subject to US FDIC whatsoever. They are not a subsidiary or oversea branch of Citi or any US Commercial Bank, but they intend to keep their predecessor’s rule under their name? Please. That sounds like confidence game, to me.

    • So I checked TransferWise out and they say they can’t guarantee any specific fee for transfers into Japan above 1,000,000 yen. And they have to do all the same banking procedures.

      • If you are receiving funds from abroad Shinsei Bank is pretty good -they have foreign currency accounts so you can choose to have the funds arrive in the other currency without changing it to yen, and so far I have never been asked any questions about any transfer, even larger ones (6 million yen).

        Good luck!

      • Thank you!
        Now we know that TransferWise takes an objective approach and has a threshold amount of 1,000,000¥.

        It is hugely problematic that the Financial Services Agency gives no specific amounts and leaves it all at the discretion of the banks and tellers. Even if I believed Wajin would be questioned as much (I doubt it, since it’s completely up to the employees), it will still end up in harassment of foreigners and non-wajin. By definition we have more family and friends outside of Japan.

  • Money lauderers don’t operate by sending weekly units of $500.

    But bank staff are too cowardly to question the powerful Japanese launderers so they harass the gaijin.

    Weak sauce Japan.

  • Hello,

    As usual, In the name of terrorism. Shinsei Bank send to its customers the following email:
    ( the same in japanese: )

    [Important】Notice to customers receiving incoming international transfers.

    Thank you for using Shinsei Bank.

    This email is being sent to customers who have received incoming international money transfers.

    In recent years, measures implemented to prevent money laundering and the supply of funds to terrorist organizations have become increasingly important in response to the increase of terrorism, etc. in the international society. Accordingly, in the event of an incoming money transfer from overseas we may contact customers to inquire as to the nature of the remittance or request submittal of evidential documentation showing the details of the transaction in accordance with relevant laws and guidelines. We appreciate your understanding and cooperation.
     ・We may need to confirm the birthdate and nationality of the sender, as well as the purpose of remittance and relationship to the beneficiary.
     ・We may ask for evidential documentation that shows details regarding the purpose of the remittance.
     ・Responses to our inquiries and documents submitted will be recorded and stored by Shinsei Bank.
     ・Payments may be rejected in the event of failure to cooperate with our inquiries, inability to contact customers, or as a result of information provided by customers.

    We appreciate your understanding.

    Before depositing funds to customers’ accounts we will contact customers by email, telephone or post. Please ensure that your up-to-date e-mail address, telephone number and home address are registered with Shinsei Bank.


    I asked them if I could pre-register a company that send it. I wouldnt like to be bothered by phones but rather have smooth transaction.
    However their reply to my inquiry was the same above message. Like a robot who copy and paste.

  • Jim Di Griz says:

    Yep, Japan is becoming a world class location for international elites and the easiest place in the world to do business, just like Abe promised!

  • Loverilakkuma says:

    Never mind that Africa is NOT in the Restricted Country list for international wire transaction. Nor is Africa in the list of country that would become a ground for invoking OFAC against payees. And never mind that $500 is nothing more than a modicum of monthly direct deposit payroll for average business professionals ($2500-5,000). I can see why some people choose online over OTC. It’s not just about convenience. No one wants to waste time for this unnecessary inquiry. Hope we won’t see a similar claptrap in online transaction. That would become even more problematic should it happen in the future.

  • Baudrillard says:

    Citi left Japan in the face of Abe’s economic nationalism. This is what Abenomics really means. Its not recovery, its just getting the foreigners out.
    Dovetails with NIssan breaking from Renault.

  • Same as Mainland China, again. The money HAS to stay in Japan (of course, this overlooks the Japanese sending a couple of million ¥ to their kids studying abroad).

  • realitycheck says:

    Why are you surprised? It’s always the same ol same ol in any country – go for the law abiding, low hanging fruit, the ordinary people. Place limits on them, hedge their handling of their own legally earned money with restrictions.
    Meanwhile actual money laundering goes on in real estate businesses especially here in Japan, hot money as in dubious origin from China entering property markets in Orange County, Sydney, Vancouver to name just one example of international money laundering and not to say hot money comes from China only, etc.
    The authorities the world over, Japan included, know and understand this. It’s why in Delaware and New York money from foreign sources can still be placed anonymously under different layers in the same banks that give you hell for wanting to deposit or withdraw your legally earned, taxed savings.


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