Silviase/jgov_v1.4_full_ann huggingface dataset:
## I ntroduction

By the enactment of “The Act on Prevention of Transfer of Criminal Proceeds” in April 1, 2007, the Financial Intelligence Unit (FIU) in charge of the collection, arrangement, analysis, provision, and dissemination of suspicious transaction reports, has been transferred from the Financial Services Agency to the National Public Safety Commission / National Police Agency. And, by the total enforcement of this law on March 1, 2008, the range of specified business operators which should verify identification data of a customer has greatly expanded from financial institutions such as banks, etc., to also include non-financial business and professions, such as finance leasing operators, credit card operators, the real estate transaction business operator, and legal professions and accountants, such as judicial scriveners, certified public accountants.

National Police Agency established Japan Financial Intelligence Center (JAFIC) within Organized Crime Department, Criminal Investigation Bureau at the same time as the enforcement of this law, in order to assist (FIU, formally known as) the National Public Safety Commission. The Task Force specializing in investigation of money laundering has also been established in the Prefectural Police, in order to further eliminate criminal proceeds, and crackdown on illegal fund acquisition activities undertaken by antisocial forces.

Although the total enforcement of this law further advances countermeasures against money laundering in Japan, for the effective implementation of such money laundering countermeasures by the police, the understanding and cooperation in this matter by specified business operators, competent administrative authorities, and national citizens is essential.

Currently, various efforts to eliminate antisocial forces at specified business operators, such as financial institutions and securities industries, have been conducted. The number of reports of suspicious transactions has exceeded 230,000 cases in 2008, approximately 150% of the number of reports in 2007.

Moreover, seminars for specified business operators are held by competent administrative authorities overseeing such specified business operators, as anti-money laundering measures by the cooperation of the government and public.

This year, JAFIC again presents its annual report for the many people in various fields who are involved in anti-money laundering measures, in order to understand 1) the background and need for anti-money laundering measures, 2) the outline of the Act on Prevention of Transfer of Criminal Proceeds, 3) how information regarding suspicious transactions is used, and 4) international cooperation of anti-money laundering measures.

It is our sincere hope that this annual report, can be of some help to understand anti-money laundering measures for many people who get involved in these AML measures directly or indirectly.
Chapter1 History of Anti-Money Laundering Measures
Section1 Anti-Money Laundering Measures in International Society
1 Anti-Money Laundering Measures as International Countermeasures against Narcotic Drugs
2 Anti-Money Laundering Measures as Countermeasures against International Organized Crime and Terrorism
3 Countermeasures to Sophistication of Modus Operandi of Money Laundering
Section2 Anti-Money Laundering Measures in Japan
1 Enforcement of "the Anti-Drug Special Provisions Law"
2 Enforcement of the Act on the Punishment of Organized Crime
3 Enforcement of "the Act on the Punishment of Financing of Offenses of Public Intimidation" and "Customer Identification Act", and the Revision of "Act on the Punishment of Organized Crime"
4 Enforcement of "the Act on Prevention of Transfer of Criminal Proceeds"
Chapter2 Legal Systems of Countermeasures against Money Laundering
Section1 Outline of the Anti-Drug Special Provisions Law and Act on the Punishment of Organized Crime
1 Anti-Drug Special Provisions Law
(1) Punishment of money laundering
(2) Confiscation, collection of equivalent value and securance measures (Article 11 through 13, 19, 20)
2 Act on the Punishment of Organized Crime
(1) Punishment of money laundering (Article 9 through 11)
(2) Confiscation, collection of equivalent value and securance measures (Article 13 through 16, 22, 23, 42, 43)
Section2 Outline of the Act on Prevention of Transfer of Criminal Proceeds
1 Purpose of the Act (Article 1)
2 Criminal Proceeds (Paragraph 1 of Article 2)
3 Specified Business Operators (Paragraph 2 of Article 2)
4 Responsibilities of the National Public Safety Commission and FlU (Article 3)
5 Measures by Specified Business Operators
6 Dissemination of Information on Suspicious Transactions (Article 11 and 12)
7 Supervisory Measures (Article 13 through 17, 23, 24, 27)
8 Penal Provisions regarding Reception/Delivery/Provision of Deposit/Savings Passbooks, etc. (Article 26)
9 Enforcement
Chapter3 Establishment of JAFIC and Police Activities
Section1 Background
Section2 Mission and Structure
Section3 JAFIC and Partners
Section4 Countermeasures against Criminal Proceeds by the Police
Section5 Cooperation with Business Operators and the Public
Paragraph1 Explanation and Provision of Information, etc., on Seminars Targeting Specified Business Operators
1 Explanation of Seminars targeting Financial Institutions
2 Explanation of Seminars for Currency exchanging Operators
3 Public Service Announcement in Cooperation with Mass Media and PR Activities Using Poster/Leaflets
4 PR on Website
Paragraph2 Provision of Information for Specified Business Operators following the U.N. Security Council Resolution
Paragraph3 Efforts of Specified Business Operators
1 Efforts of Banking Industry
2 Efforts of Securities Industry
3 Efforts of Real Estate Industry
4 Efforts of Lawyers Associations
Section 6 Measures to Ensure the Effectiveness of the "Act on Prevention of Transfer of Criminal Proceeds"
Chapter4 Reports of Suspicious Transactions 23
Section1 Outline of the Suspicious Transaction Report System 23
1 Purpose 23
2 Cases in which Reporting is Required 23
3 Announcement of List of Reference Cases of Suspicious Transactions 23
4 Flow of Suspicious Transactions Reporting 23
5 Information Security Measures 24
Section2 Situation of Suspicious Transactions Reports 25
1 The change in the number of reported cases 25
2 Number of Reports by Business Types 27
3 Number of Reports by Branch Locations of specified business operators 27
Section3 Use of Suspicious Transaction Reports 29
Paragraph1 Dissemination to Investigative Authorities 29
Paragraph2 Outlook of How STRs are Used 29
Chapter5 Promotion of International Cooperation 31
Section1 Need for International Cooperation on AML/CFT Measures 31
Section2 Activities of International Institutions and Japan's Participation 31
Paragraph1 FATF 31
1 FATF 31
2 Activities of FATF 32
3 Participation of JAFIC in FATF 32
Paragraph2 APG 33
1 APG 33
2 Activities of APG 33
3 Participation of JAFIC in APG 33
Paragraph3 Egmont Group 33
1 Egmont Group 33
2 The Main Plenary Meeting of the Egmont Group 34
3 Participation of JAFIC in the Egmont Group 34
Section3 Information Exchange with Foreign FIUs 35
Paragraph1 Establishment of the Framework for Exchange of Information 35
Paragraph2 Status of Information Exchange with Foreign FIUs 35
Section4 FATF Mutual Evaluation of Japan 37
Paragraph1 Implementation of the Third FATF Mutual Evaluation of Japan 37
Paragraph2 Outline of the Results 37
Paragraph3 Plans for the Future Schedule 37
Chapter6 Money Laundering Trends 39
Section1 Cases Cleared for Money Laundering Offences 39
Paragraph1 Cases Cleared for Money Laundering Offences under the Act on the Punishment of Organized Crime 39
1 The number of Cases Cleared 39
2 Modus Operandi of Money Laundering observed in Cleared Cases 40
3 Money Laundering by Members of the Boryokudan, etc. 42
4 Money Laundering committed by Foreign Visitors to Japan 44
Paragraph2 Outline of Cases Cleared for Money Laundering Offences under the Anti-Drug Special Provisions Law 45
Section2 Deprivation of Criminal Proceeds 46
Paragraph1 Confiscation and Collection under the Act on the Punishment of Organized Crime 46
1 Application for Provisions of Confiscation and Collection 46
2 Pre-indictment Confiscation Securance of Criminal Proceeds, etc. 46
Paragraph2 Confiscation and Collection under the Anti-Drug Special Provisions Law 49
1 Application for Provisions of Confiscation and Collection 49
2 Pre-indictment Confiscation Securance Order of Drug Proceeds 49
History of Anti-Money Laundering Measures

Global Events	Events in Japan
December 1988	Adoption of "UN New Narcotics Convention" (Criminalization of money laundering activities related to illegal proceeds derived from drug crimes .)
July 1989	Arch Summit (Establishment of the FATF (Financial Action Task Force on Money Laundering))
April 1990	FATF issued "the 40 Recommendations" - Customer identification by financial institutions - Reporting of suspicious transactions to financial regulatory authorities	June 1990
June 1996	FATF revised "the 40 Recommendations" - Extending the scope of predicate offences to serious crimes became compulsory.	Notices issued on the requirement of customer identification, etc. (by the Director-General of the Banking Bureau, Ministry of Finance and others)
May 1998	Birmingham Summit (Agreement on establishment of FIU)	Enforcement of "the Anti-Drug Special Provisions Law" (Creation of the "Suspicious transaction report" system relating to drug crimes)
September 2001	Terrorist attacks in the US	February 2000
October 2001	FATF issued "Special Recommendations on terrorist financing" - Criminalization of terrorist financing, Reporting of suspicious transactions related to terrorism.	Enforcement of "Act on the Punishment of Organized Crime" (Extension of the scope of predicate offences to certain serious crimes, establishment of the Japan FIU, etc.)
June 2003	FATF re-revised "the 40 Recommendations" - Application of recommendations to non-financial businesses (building lots and building transaction business, dealers in precious metals, dealers in precious stones, etc.) and professionals (lawyers, accountants, etc.)	With the enforcement of "the Act on Punishment of Financing to Offences of Public Intimidation" and "the revised Act on the Punishment of Organized Crime", terrorist financing offence was added to predicate offences.
January 2003
Enforcement of "the Customer Identification Act" (Obligation of identification of customers, etc. by financial institutions, etc. is legislated.)
December 2004
"The Headquarters for Promotion of Measures Against Transnational Organized Crime and International Terrorism" created the "Action Plan for Prevention of Terrorism".
November 2005
"The Headquarters for Promotion of Measures Against Transnational Organized Crime and International Terrorism" decided on "the Development of laws for implementation of the FATF recommendations"
March 2007
Adoption of "the Act on Prevention of Transfer of Criminal Proceeds"
April 2007
Transfer of the FIU (from the Financial Services Agency to the National Public Safety Commission / the National Police Agency)
March 2008
Enforcement of the application of customer identification obligation, etc. to non-financial business operators, etc.
# Chapter 2 Legal Systems of Countermeasures against Money Laundering

As described in the preceding chapter, legal systems on money laundering both in Japan and foreign countries have realized a gradual development since the 1980s and generally contain the following three elements:

(1) Criminalization of money laundering

(2) Confiscation of criminal proceeds

(3) Obligation of a certain range of business operators to take preventative measures such as, customer due diligence.

Among these standards, (1) and (2) are aimed at the direct effects of weakening, in particular, the financial foundations of criminal organizations to target assets generated through crimes, while (3) is aimed at preventing money laundering itself by making it easier to trace the transfer of illegal funds and making it more difficult to avoid prosecution and confiscation.

In Japan the standards (1) and (2) above are realized mainly by the Anti-Drug Special Provisions Law and Act on the Punishment of Organized Crime, and the standard (3) is realized by the Act on Prevention of Transfer of Criminal Proceeds.

Figure2-1 Relationships of the Act on Prevention of Transfer of Criminal Proceeds, Act on the Punishment of Organized Crime, and the Anti-Drug Special Provisions Law

•Assure the safety and peace of national life

•Assure the sound development of economic activities

•Prevent the transfer of criminal proceeds by punishing money laundering

•Confiscate criminal proceeds, etc.

Act on Prevention of Transfer of Criminal Proceeds

Customer identification / Preparation and preservation of transaction records, etc.

Reports of suspicious transactions

Concealment of criminal proceeds (including drug crime proceeds)

Confiscation of proceeds
Government organs that perform collection, arrangement and analysis of suspicious transaction reports and disseminate them to investigative authorities are generally called FIUs (Financial Intelligence Units). Japanese FIU used to belong to Financial Services Agency. Under the new law, National Public Safety Commission took over this function from the Financial Services Agency, in connection with the extension of the scope of specified business operators. For this purpose, the Japan Financial Intelligence Center (JAFIC) was established in the National Police Agency, in charge of police administration under the control of the National Public Safety Commission, on April 1, 2007.

In May 2007, JAFIC became a member of the Egmont Group, an international framework aiming at communication between FIUs.

The outline of the structure of JAFIC will be detailed in Chapter 3.

Figure2-2 Responsibilities of the National Public Safety Commission (Article 3 of the Act on Prevention of Transfer of Criminal Proceeds)

Support such as provision of information on modus operandi, contributing to the implementation of measures by specified business operators, and enhancement of public awareness

Collection, arrangement and analysis of information on criminal proceeds contributing to criminal investigation and international exchange of information

Functions Of FIU

## 5 Measures by Specified Business Operator

By the act, specified business operator is obliged to conduct the following:

## (1) Customer Identification (Article 4)

In conducting a certain transaction, verify identification data of a customer such as the name and domicile by asking for his/her driver's license or other identification documents;

## (2) Preparation of customer identification records (Article 6)

Prepare and keep the record of identification data and measures taken for customer identification, etc. for seven years;

### (3) Preparation of transaction records, etc. (Article 7)

Prepare and keep the record of the date and contents, etc. of transactions concerned for seven years;

## (4) Reporting of suspicious transactions (Article 9)

Report transactions that are suspected of being related to criminal proceeds to the competent authority, except for judicial scriveners, administrative scriveners, certified public accountants, certified tax accountants and lawyers;

## (5) Notification pertaining to foreign exchange transactions (Article 10)

In conducting a cross-border payment, notify the receiving institutions of certain items such as the name and the account number. This article is applied only to financial institutions that can conduct exchange transactions;

## (6) Measures by lawyers (Article 8)

It is established by special provision, that lawyers shall conduct measures relevant to those described in (1) through (3) above based on Rule of the Japan Federation of Bar Association pursuant to the examples of judicial scrivener, etc.
These measures are classified by the types of business operators in Table 2-1. Also, "Specified Business Affairs" subject to obligations and "Specified Transaction" subject to customer identification obligation are listed in Table 2-2.

Customer identification, preparation and preservation of customer identification records and transaction records described in (1) through (3) above are expected to work as warnings against persons who attempt to transfer criminal proceeds and to enable tracing proceeds afterwards.

Suspicious transaction reports described in (4) will be used for investigations into money laundering crimes and predicate offences and will prevent criminals from abusing economic and financial systems, and assure its soundness.

The purpose of notification pertaining to foreign exchange transactions described in (5) is to enable tracing funds internationally and also respond to the FATF Special Recommendations regarding terrorist financing.

Table2-1 Measures of specified business operators obliged by the Act

Specified Business Operators (Paragraph 2 of Article 2)	Customer identification (Article 4)	Preparation and preservation of customer identification records (Article 6)	Preparation and preservation of transaction records (Article 7)	Reporting of suspicious transactions (Article 9)
Financial institutions, etc. (Item 1 through 33)	○	○	○	○
Finance leasing operators (Item 34)
Credit card operators (Item 35)
Building lots and building transaction business operator (Item 36)
Business operators dealing with jewelry, precious metals, etc. (Item 37)
Business operators providing a service of receiving postal items (Item 38)
Judicial scrivener (Item 40)
Administrative scrivener (Item 41)
Certified public accountant (Item 42)
Certified tax accountant (Item 43)
Lawyer (Item 39)	To be prescribed in the Rules of the Japan Federation of Bar Associations in line with cases of judicial scriveners, etc. (Article 8)
## 6 Dissemination of Information on Suspicious Transactions (Article 11 and 12)

In order to make use of information on suspicious transactions for domestic and overseas investigation, etc., the National Public Safety Commission may disseminate information to authorities in charge of investigating criminal cases such as a public prosecutor, assistant officers to prosecutors, judicial police officials (police officers, narcotics control agents, coast guards) customs officer and personnel of the Securities and Exchange Surveillance Commission and to a foreign FIU under certain conditions. The STR regime is detailed in Chapter 4 (Reports of Suspicious Transactions) and Chapter 5 (Promotion of International Cooperation).

## 7 Supervisory Measures (Article 13 through 17, 23, 24, 27)

The law provides inspection power to competent administrative authorities so that they can detect irregularities by specified business operators. The authorities can also employ various supervisory methods such as guidance, advice, suggestion, and order for rectification in the case of violation for a better compliance by specified business operators. A person who violates an order for rectification may be punished with imprisonment with labor for not more than two years or a fine of not more than three million yen.

Moreover, to complement supervisory function, the National Public Safety Commission is authorized the authority to state its opinion to competent administrative authorities (and make necessary inspections on business operators) when it detected violations.

### 8 Penal Provisions regarding Reception/Delivery/Provision of Deposit/Savings Passbooks, etc. (Article 26)

Sold or bought deposit/savings passbooks, ATM cards, etc., can be sold, bought, and misused in various crimes such as money laundering. In order to prevent this, the Act on Prevention of Transfer of Criminal Proceeds regulates persons who take over, receive or obtain a deposit/savings passbook, etc. for value or onerously, shall be punished by a fine of not more than 500,000 yen and a man who has committed, as a business, these crimes shall be punished by imprisonment with work for not more than 2 years or a fine of not more than 3,000,000 yen (optional cumulative imposition).

Furthermore, persons who invite or solicit another party to assign, deliver or provide a deposit/savings passbook, etc., for value or onerously, shall be punished by a fine of not more than 500,000 yen.

In addition, these penal provisions have been taken over from the Customer Identification Act, Article 16-2.

## 9 Enforcement

A part of the law, matters related to the function of FIU, such as the responsibilities of National Public Safety Commission, have been enforced since April 1, 2007, the range of specified business operators who are required to take measures for customer identification has expanded to include non-financial business professions, etc., since March 1, 2008.
JAFIC is in charge of the following tasks provided in the Act on Prevention of Transfer of Criminal Proceeds:

- Collection, arrangement, analysis and dissemination of reports to investigative authorities, etc. of suspicious transactions;

- Dissemination of information to foreign FLUs;

- Provision of information and complementation of supervisory measures by administrative authorities to ensure that specified business operators take the required measures;

JAFIC also plans and examines the legal system related to AML/CFT and "the Guideline for Promotion of the Criminal Proceeds Control", etc., described in Section 4, as well as participating in establishing international standards.

Among these tasks, the status of the analysis and dissemination of STRs will be explained in Chapter 4, while cooperation with foreign FIUs and international institutions will be described in Chapter 5.

The structure of JAFIC is illustrated by Fig. 3-1. It is currently composed of about 50 employees under the Director.

On the other hand, the "Task Force specializing in investigation of money laundering" is established in each Prefectural Police in charge of tracing criminal proceeds and money laundering control, etc.

Figure3-1 Structure of JAFIC
## Section3 JAfic and Partners

Specified business operators including financial institutions should take initial anti-money laundering measures according to the Act on Prevention of Transfer of Criminal Proceeds. As stated in this chapter separately, in addition to the analysis of financial intelligence, JAFIC endeavors to make public actual conditions of money laundering and legal systems and relevant countermeasures in order that specified business operators take the proper actions and gain cooperation from the public. Relevant ministries and agencies in charge of supervising business operators should not only exercise the supervisory function to secure the fulfillment of obligations, but should also issue List of Reference Cases of Suspicious Transactions, and seminars in cooperation with industry organizations. On the other hand, investigative authorities, such as the police, detect money laundering and predicate offences and, as a result, confiscate criminal proceeds within their respective jurisdictions.

These ministries and agencies carry out their duties in each position, while also cooperating with each other by exchanging useful information, discussing issues in preventing money laundering and other ways.

Also, for the purpose of promoting effective and appropriate measures against transnational organized crimes and international terrorism in a comprehensive and active manner, the "Headquarters for the Promotion of Measures against Transnational Organized Crime and Other Relative Issues and International Terrorism" was established in a Cabinet Meeting in August 2004. In addition, the "Ministerial Meeting Concerning Measures against Crime" which was started by the cabinet meeting agreement on September 2003, frequently discusses anti-money laundering measures.

Figure3-2 Anti-money laundering measures in each governmental organization