## 2 Act on the Punishment of Organized Crime

As described in Chapter 1, Act on the Punishment of Organized Crime was enacted based on the extension of predicate offences in the revised FATF "40 Recommendations" and the international agreement on the establishment of an FIU, and was enforced in February 2000. In terms of criminal proceeds regulations, this law is characterized by the extension of the scope of predicate offences from drug crimes stipulated in the Anti-Drug Special Provisions Law to certain serious crimes.

## (1) Punishment of money laundering (Article 9 through 11)

According to the Act on the Punishment of Organized Crime, in addition to acts of disguising, concealing, and receiving stipulated in the Anti-Drug Special Provisions Law, changing a director, etc. as a means of managing an enterprise, etc. using criminal proceeds shall be punished as another type of money laundering crime. The scope of crime which generates criminal proceeds is stipulated in schedule.

## (2) Confiscation, collection of equivalent value and securance measures (Article 13 through 16, 22, 23, 42, 43)

The system of confiscation and collection of equivalent value provided in Act on the Punishment of Organized Crime is subject to the discretion of the court, unlike the system provided in the Anti-Drug Special Provisions Law. However, it has been strengthened compared to the existing system in the Penal Code in that the target is extended to monetary claims, assets obtained as the fruit of criminal proceeds are also within the scope, securance measures have been established, and so on.

At the time of the enactment of Act on the Punishment of Organized Crime, it was stipulated that so-called "Crime victim property", such as proceeds obtained through fraud, etc. may not be confiscated in consideration of damage claims by victims. However, the law was partially revised (enforced in Dec. 2006) to enable confiscation in certain cases where the crime is considerably organized or it will be difficult to recover the damage by civil proceedings due to money laundering or other reasons.

## Section2 Outline of the Act on Prevention of Transfer of Criminal Proceeds

As described in Chapter 1, the Act on Prevention of Transfer of Criminal Proceeds is a new act created on the basis of existing acts, i.e. the whole part of the Customer Identification Act and a part of the Act on the Punishment of Organized Crime and also in response to the revised FATF "40 Recommendations" of 2003 and sophistication of money laundering techniques. The act provides for a system to prevent transfer of criminal proceeds, including customer identification, preparation and preservation of transaction records, suspicious transaction reporting, etc. to be implemented by a certain range of business operators.

For the fundamental structure of the act, please refer to Fig. 2-3.

## 1 Purpose of the Act (Article 1)

The purpose of this act is to prevent the transfer of criminal proceeds and ensure the appropriate enforcement of international treaties concerning the prevention of financing terrorism, etc. and, thereby, to assure the safety and peace of national life and to contribute to the sound development of economic activities by way of devising such measures as the identification of customers, preservation of transaction records or the like, and reporting of suspicious transactions by specified business operators, coupled with other measures stipulated by the Act on the Punishment of Organized Crime and Anti-Drug Special Provisions Law.