### Section 4. Measures to Prevent Transfer of Criminal Proceeds

### 1. Activities based on Implementation of the Act on Prevention of Transfer of Criminal Proceeds

Criminal proceeds obtained by organized crime syndicates such as Boryokudans are used for “activity funds” for new crimes or for expenses on procuring weapons, which maintain and strengthen the crime syndicates, as well as fostering organized crime. Thus it is important to prevent the transfer of criminal proceeds as well as ensuring that criminals are deprived of them in order to undermine these organizations and drive them to extermination. Laws relating to the prevention of the transfer of criminal proceeds (hereafter “Act on Prevention of Transfer of Criminal Proceeds”) were introduced in two stages; on 1 April 2007, and on 1 March 2008. The police are cooperating with related organizations, businesses, and related foreign institutions to promote measures against criminal proceeds based on these laws.

## (1) Specified Business Operators and Measures to Secure the Proper Observation of the Law

With the complete implementation of the Act on Prevention of Transfer of Criminal Proceeds from 1 March 2008, the scope of business operators taking measures such as confirming ID of customers, creating and saving transaction records, and reporting suspicious transactions has expanded. The National Public Security Commission and the NPA are making efforts to advance understanding and cooperation toward the Act on Prevention of Transfer of Criminal Proceeds through various seminars for specified business operators $ ^{1} $ , websites, and other means in cooperation with relevant organizations in order to secure the proper observation of the law by specified business operators.

## (2) Suspicious Transaction Report

The report of suspicious transaction stipulated in the Act on Prevention of Transfer of Criminal Proceeds is a system which requires the report of suspicious transactions to financial institutions, in cases where received money by a business $ ^{2} $ is suspected to be criminal proceeds to a financial institution. The information submitted by these businesses to their respective presiding administrative agencies is compiled by the National Public Safety Commission and NPA for sorting and analysis and then submitted to investigative institutions such as Prefectural Police Forces and the public prosecutor's office for use in investigations, etc of money laundering offenses. In 2008, the number of cases in which information concerning suspicious transactions has provided clues leading to a case clearance was 175 cases, which is an increase of 76 cases (76.8%), among which 132 cases were fraud cases, occupying 75.4% of the total. There were 9 cases leading to clearances of money laundering offenses.

In addition, the NPSC and NPA have been appointed to carry out an analysis of information regarding suspicious information, and provide such analysis results to investigative agencies and foreign FIUs $ ^{3} $ , as well as provide information and assistance to specified business operators, as Japan’s FIU (Japan Financial Intelligence Center: JAFIC), instead of the Financial Services Agency.

Note 1: Businesses stipulated in Article 2 paragraph 2 of Act on Prevention of Transfer of Criminal Proceeds

2: Financial institutions, financial lease contractors, credit card providers, real estate agents, dealers in precious metals, mail receipt and telephone receptionist service providers, lawyers, judicial scriveners, administrative scriveners, certified public accountants, certified tax accountants, etc.

3: Abbreviation of Financial Intelligence Unit. Organizations established in each country to gather and analyze information on suspicious transactions and provide such information to investigative authorities and other organizations. The National Public Safety Commission and the NPA are in charge of Japan’s FIU which is called the Japan Financial Intelligence Center (JAFIC).