TOKYO, Oct 13 — Japanese Prime Minister Shinzo Abe’s cabinet approved legislation to freeze terrorist assets amid criticism that the nation lacks measures to halt money laundering and terrorism financing.

The cabinet also endorsed a proposal to amend a law aimed at stopping criminals from transferring proceeds from their activities, the Finance Ministry said October 10.

The moves came after the Financial Action Task Force in June urged Japan to address deficiencies in its efforts to counter money laundering and funding of terrorists. By not addressing the shortcomings, Japan risks becoming the first developed nation to join the global organisation’s list of high-risk jurisdictions that includes North Korea and Syria.

The new terrorist asset-freezing system would allow Japan to regulate domestic transactions of funds by terrorists. The current regime based on the foreign-exchange law limits only overseas money transfers with terrorists designated by the United Nations Security Council.

Proposed changes to the anti-money-laundering law include clarifying how to judge suspicious transactions so that financial institutions can report them to regulators, according to materials distributed by the Finance Ministry October 10.

Regulators from Hong Kong to the US are stepping up efforts to curb money laundering, including boosting measures to catch risk-management failures at banks.

Compliance policy

‘Double Irish’ corporate tax break’s end is weighed by officials

Ireland’s finance ministry officials are weighing phasing out a tax device used by multinational companies including Google Inc, according to a person with knowledge of the matter, as the European Union looks into the practice.

Ireland is considering whether to eliminate a technique known as the “Double Irish”, which allows companies to avoid paying corporate tax on much of their income, or phasing the tax break out over four or five years, said the person, who asked not to be named, as no final decision has been made.

Irish Finance Minister Michael Noonan is under pressure from the European Commission to end incentives that sweeten the nation’s 12.5 per cent corporate tax rate as he prepares his October 14 annual budget speech. The commission said October 10 it asked for information from Ireland on tax residency rules earlier this year.

The finance ministry didn’t respond to a question about whether the abolition of the Double Irish is under consideration.

Malaysia to extend tax incentives for Islamic bonds for 3 years

Tax exemption for expenses incurred on issuance of sukuk based on principles of Islamic finance will be extended by three years from 2015, Malaysian Prime Minister Datuk Seri Najib Razak said in a budget speech delivered to Parliament October 10.

Najib also announced the government will introduce the Investment Account Platform in 2015. The new Shariah-compliant investment product will provide opportunities for those who want to invest in entrepreneurial ventures, Najib said in the speech.

IAP investors will be given an income tax exemption on profits on qualifying investments for three consecutive years, according to speech.

Compliance action

Indian stock exchange told to submit study-sased plan of action

The Securities and Exchange Board of India directed the National Stock Exchange to submit a plan of action report within three months based on a compliance study by an independent expert.

Sebi ordered the exchange to be cautious in dealings in securities markets and comply with legal requirements.

The order pertains to the National Stock Exchange’s October 5, 2012, failure to implement the 10 per cent limit for the index circuit breaker, under the terms of June 2001 Sebi rules requiring index-based market-wide circuit breakers, according to the Sebi order. — Bloomberg