REGULATORY INSIGHT

Japan's non-face-to-face identity verification changes on 1 April 2027

22 August 2026

On 1 April 2027, amendments to the Ordinance for Enforcement of Japan's Act on Prevention of Transfer of Criminal Proceeds take effect, and the permitted methods of remote identity verification change. The method that has long been the mainstream — sending an image of a photo identity document together with an image of the customer's face — can no longer be used, and the regime moves to methods built on reading the document's IC chip. Tens of thousands of businesses designated under the Act are affected: financial institutions, crypto-asset exchange operators, payment providers, real estate, and the licensed professions.

What stops being available

The change centres on the non-face-to-face methods set out in Article 6, paragraph 1, item 1 of the Ordinance. The method most widely used in practice — having the customer send images of a photo identity document along with images of their face (commonly referred to in Japan as the ho method) — is abolished. Methods that rest on an image of the document have been criticised for their weakness against forgery and alteration.

What replaces them are, principally, methods in which information recorded on the document's IC chip is read and transmitted, and methods using the electronic certificate on the My Number Card. The point is that the signed information held in the chip is used, rather than a picture of the printed face of the card.

This is not a single amendment

What is easily missed in practice is that this change is assembled from several separate orders. Alongside the joint order promulgated on 24 June 2025 (No. 3 of 2025, issued jointly by the Cabinet Office and seven ministries), there is an order promulgated on 6 March 2026 and a further order promulgated on 1 November 2026, each carrying related content.

In other words, to know "the provisions in force as at 1 April 2027" you have to look at the result of laying several amending orders on top of one another. It is not a matter of consulting a single provision. When you update internal rules or a vendor's configuration, unless you record which version, as at which date, you worked from, you will not be able to verify it afterwards.

There are no transitional measures

No transitional measures accompany this change. On the day it takes effect, the old methods stop being available.

A verification already under way when the effective date passes — under which set of provisions is it judged? How do you design the operation for the day of the switch itself?

The longer the lead time an amendment is given, the more reliably it goes untouched until close to the deadline. Migrating to IC chip reading reaches beyond application changes: guidance for customers whose devices or documents cannot support reading, call centre capacity, and revisions to internal rules. Measured in preparation time, April 2027 is already not far off.

Something is circulating that is not in the primary sources

Among the commentary on this amendment, one finds statements to the effect that operators must define alternative procedures in advance. That it is desirable to do so in practice is not in doubt. But as far as we have been able to confirm, that requirement does not appear in the primary sources.

Desirable practice and what the law actually requires need to be held apart. Set your internal response on the basis of the two conflated, and you will either defer work that is genuinely required or spend effort on work that is not. When you are working through this amendment, we would suggest going to the text of the promulgated orders rather than to commentary.

Worth checking now

• Whether the non-face-to-face method you currently use is one that survives the effective date
• Whether you can state the provisions in force as at the effective date, as the result of the amending orders taken together
• Whether, when you switch methods, the record shows which version of the provisions the configuration change was based on
• Whether you have decided, as a matter of operation, how to treat procedures that straddle the effective date
• Where the work is outsourced to a vendor, whether the timing and scope of the switch are agreed

Absorb it in process, or carry it in the system

One approach is to have people follow each amendment by hand and update the internal configuration each time. But where amendments are layered as they are here, where there are no transitional measures, and where the volume of affected procedures is large, the question becomes whether you can afterwards identify the places where that following-along failed.

We research and develop technology that carries conformity with regulation in the system rather than in human process, and we hold the results as patent applications. We have filed several in areas this amendment touches.

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