TOKYO REPORT: Counterfeit U.S. Bills on the Increase in Japan

June 28, 2018

Tokyo- With tourists from abroad arriving in Japan at record-breaking numbers, more and more counterfeit U.S. currency is entering the country.

In October last year, more than 160 counterfeit 100-dollar bills were found to have been exchanged at currency exchange counters in Tokyo.

Experts on counterfeiting who have seen the fake 100-dollar bills said they are poorly produced and easily recognizable. For example, the feel of the bills is evidently different from that of genuine 100-dollar bills and their holograms, three-dimensional images projected on a 2-D surface, do not work, one expert said, adding that they resemble "toy money."

However, because special paint that reacts to ultraviolet light has been used in the printing process, the forged bills can pass certain detection machines.

The bogus bills were used at stores where employees are unfamiliar with U.S. currency and merely put the bills through detection machines, said the head of a private counterfeit detection center that examined them. The official stressed the need for visual and other over-the-counter checks.

Bogus dollar bills have also been used at cash voucher stores and brought to currency exchange bureaus, while apparently forged U.S. currency was found in Osaka in December.

"International crime syndicates can readily convert counterfeit U.S. bills to cash in Japan," warned Takashi Kubota, a professor at Waseda University familiar with money laundering.

Japan revised its foreign exchange law in 1998, enabling anyone to set up a currency exchange service. Currently, more than 400 companies each exchange currencies worth more than one million yen per month, according to the Ministry of Finance.

Financial regulators, meanwhile, tend to focus on large-scale illegal remittance and other transactions. They only conduct about 20 on-the-spot inspections of money exchangers annually.

The number of bogus 100-dollar bills discovered in Japan rose to 57 in 2016 from 26 in 2014, according to the National Police Agency.

Due to strict crackdowns on counterfeit money overseas, experts on money laundering warn that members of organized crime may be entering Japan as tourists to convert counterfeit bills to Japanese yen.

As an anticounterfeit measure, major banks and other such concerns do not issue U.S. dollar bills they receive, offering only new bills.

Masataka Hanaki, an associate professor at Kindai University and expert on foreign exchange, called for industrywide rules to prevent an increase in the exchange of bogus bills. The rules would require currency exchange counters and other businesses that are involved to share information immediately on frequent or large-lot currency exchanges. Jiji Press