Silviase/jgov_v1.4_full_ann huggingface dataset:
formation Technology and Other Environmental Changes, which intends to add virtual currency exchange service providers in the category of specified business operators through the partial amendment of the Act on Prevention of Transfer of Criminal Proceeds, was submitted to the 190th Diet session. The bill was enacted on May 25 and promulgated on June 3, 2016. The amended Act is put into effect on April 1, 2017.

## (2) Key points of the amendment

A. Addition of virtual currency exchange service providers in the category of specified business operators

Virtual currency exchange service providers are newly added to the category of specified business operators, who are obliged to conduct verification at the time of transactions, prepare and preserve verification records, and report suspicious transactions.

B. Newly established penal provisions for the provision, etc. of information necessary for the exchange of virtual currencies

The Act on Prevention of Transfer of Criminal Proceeds has penal provisions concerning receipt/delivery/provision of deposit/savings passbooks, etc. with regard to an act by a third party of disguising him/herself as another person and wrongfully using passbooks, etc. for transferring criminal proceeds (see Section 1, 8.). If information, such as IDs and passwords, necessary for receiving the provision of services under a virtual currency exchange contract is given to any third party, this would enable the third party to make transactions by disguising him/herself as another person, posing a risk of a wrongful use of the information such as for the transfer of criminal proceeds. Therefore, penal provisions to the same effect are established with regard to the receipt of information necessary for receiving the provision of services under a virtual currency exchange contract.

## 2 Amendment of the Ordinance for Enforcement of the Act on Prevention of Transfer of Criminal Proceeds in Response to the Occurrence of the Kumamoto Earthquake in 2016

Considering the damage caused by the Kumamoto Earthquake that occurred in April 2016, special provisions were established through the amendment of the Ordinance for Enforcement of the Act on Prevention of Transfer of Criminal Proceeds to introduce measures to admit that verification at the time of transactions for customers who sustained damage due to the earthquake and for whom it is found to be difficult to verify ordinary identifying matters, may be conducted based on declaration made by the customers.

These special provisions are removed on April 1, 2017 through the partial amendment of the Ordinance for Enforcement of the Act on Prevention of Transfer of Criminal Proceeds.

## 3 Other Points of the Amendment

Under the Act on Prevention of Transfer of Criminal Proceeds, with regard to companies, etc. listed on securities markets in jurisdictions of FATF members and those where AML/CFT measures are considered to have been fully implemented, verification of identifying matters of such companies, etc. is not required when conducting specified transactions with
them on the premise that their substantiality has normally been examined upon their listing, and such jurisdictions are to be designated in a public notice.

From this perspective, India, which is a FATF member and is found to have put in place sufficient AML/CFT measures and with whom Japan has been promoting financial cooperation, is decided to be newly added to those designated jurisdictions.
## Chapter 3

## Efforts of Specified Business Operators and Administrative Authorities to Promote Countermeasures against Money Laundering and Terrorist Financing

In order to effectively implement countermeasures against money laundering, it is critical that every obligation imposed on specified business operators is properly enforced. For this purpose, robust efforts have to be made at the private sector level. JAFIC is working together with relevant competent ministries on providing various outreach programs to support their own efforts by organizing an AML/CFT workshop and posting the latest information on the website.

Importantly, JAFIC would, when there is non-compliance, exercise its supervisory power over the non-compliance in consultation with the supervising administrative authority to issue a rectification order against the specified business operators (except for lawyers) concerned.

## Section 1 Efforts of Specified Business Operators

## 1 Banking Industry

The “Japanese Bankers Association” (hereinafter referred to as “JBA”), of which most of the banks operating in Japan are members, established the “Working Committee on Money Laundering Issues” within the JBA in 1990 and, since then, has been taking AML/CFT measures, such as preparing and providing notices on items to keep in mind regarding CDD and STR filing, preparing and distributing seminar handbooks to members, giving seminars for its members, and so on. Furthermore, the JBA prepares leaflets, posters or the like and carries out PR activities using TVs, newspapers or other mass media to inform customers of CDD procedures. In addition, the JBA is promoting organizational measures on issues related to ML/TF inside or outside of Japan by following, at all times, the development of AML/CFT measures at the FATF, exchanging and sharing information constantly with foreign bankers associations or the like, making responses to the FATF’s mutual evaluations of Japan, and so forth. The JBA has been playing a leading part in the efforts of the banking industry, with “Code of Conduct,” (revised in November, 2013) which provides matters on compliance with laws or regulations including the prevention of ML/TF and confrontation with anti-social forces, and has prompted its members to put such into practice.

## 2 Shinkin Banks (Credit Unions)

As for the credit union industry, in 1997 the National Association of Shinkin Banks established the Shinkin Banks Ethics Program (re-named the Shinkin Banks Action Program in
bers to help develop their readiness to exclude anti-social forces from among members, thereby striving to take thorough steps against ML/TF and share information within the credit cooperative industry.

## 4 Agricultural Cooperatives and Fishery Cooperatives

Regarding the prevention of ML/TF, agricultural cooperatives and fishery cooperatives have developed administrative procedures related to the implementation of verification at the time of transactions, suspicious transaction reporting, etc. based on the Act on Prevention of Transfer of Criminal Proceeds and are holding briefing sessions and training sessions for staff members. In addition, they make and issue posters intended to raise members' and users' awareness about the procedures for verification at the time of transactions.

Moreover, regarding measures to eliminate transactions with anti-social forces, the cooperatives have established internal regulations, including basic policies, based on the government's guidelines and have introduced a clause for Boryokudan exclusion in contract documents. They are also implementing examination as to whether or not customers are anti-social forces based on the database when starting transactions.

## 5 Life Insurance Industry

The Life Insurance Association of Japan (LIAJ), of which all domestic life insurance companies in Japan are members, works to achieve appropriate operations by its members by incorporating AML/CFT and anti-social forces in its Code of Conduct.

LIAJ has compiled the “Countermeasures Against Money Laundering and Terrorist Financing Handbook” and the “Countermeasures Against Money Laundering and Terrorist Financing FAQs” (hereinafter referred to as the “Handbooks, etc.”) for both executives and regular employees, thereby assisting members in their efforts. In addition, LIAJ also makes posters and presents important points pertaining to the subject on its website. In response to the partial amendment of the Act on Prevention of Transfer of Criminal Proceeds in 2014, LIAJ has reflected the amended content in these posters, notes and the Handbooks, etc. to widely disseminate the details of the amendment among its members.

To address the issue of anti-social forces, LIAJ has issued a directive entitled “Guidelines for Coping with Anti-social Forces in the Life Insurance Industry.” With a view to dissolving insurance contracts of parties found to be anti-social forces or that are engaged with anti-social forces in a manner unacceptable to society, the LIAJ has issued for members entitled “Insurance Contract Rules and Regulations Regarding Anti-social Forces”. In addition, the LIAJ works with the police and other external specialized institutions, creates industry databases on anti-social forces, and takes other necessary steps.

## 6 Non-Life Insurance Industry

As for the non-life insurance industry, with a view to preventing ML/TF, verification of customer identity procedures regarding savings-type insurance or large cash transactions exposed to a high risk of ML/TF have been implemented since 1990. The General Insurance Association of Japan has acted on an industry-wide basis in providing procedures related to
## Section 2 Collaboration with the Private Sector

## Paragraph 1 AML/CFT Workshop for Information Sharing and Feedback in 2016

## 1 Workshops for Financial Institutions, etc

(1) The National Police Agency jointly held with the Financial Services Agency, the “Suspicious Transaction Reporting Workshop” for financial institutions 14 times, at a total of 12 places around the country, from October to November 2016, where they gave feedback learned from case studies of actual investigations involving STR information and advice with regard to key points in performing the reporting work and explained the overview of the amendment of the Act on Prevention of Transfer of Criminal Proceeds in 2014.

Moreover, personnel of the National Police Agency visited 40 banks and other financial institutions across Japan and provided explanations regarding example cases of suspicious transaction reporting and points of attention concerning reporting work.

(2) In September 2016, the National Police Agency sent personnel to briefing sessions held in seven places across the nation by the Ministry of Finance targeting currency exchanging operators to provide explanations concerning the overview, etc. of the amendment of the Act on Prevention of Transfer of Criminal Proceeds in 2014.

(3) In August 2016, the National Police Agency sent personnel to a briefing session in Tokyo held by the Commodity Futures Association of Japan targeting futures commission merchants to provide explanations concerning the overview, etc. of the amendment of the Act on Prevention of Transfer of Criminal Proceeds in 2014.

## 2 Briefing Sessions for Credit Card Operators

In July 2016, the National Police Agency sent personnel to a briefing session in Tokyo held by the Japan Consumer Credit Association targeting credit card operators to provide explanations concerning the overview, etc. of the amendment of the Act on Prevention of Transfer of Criminal Proceeds in 2014.

## 3 Briefing Sessions for Real Estate Agents

In January and December 2016, the National Police Agency sent personnel to briefing sessions for real estate agents held in two places across the nation by the Ministry of Land, Infrastructure, Transport and Tourism, etc. to provide explanations concerning the overview, etc. of the amendment of the Act on Prevention of Transfer of Criminal Proceeds in 2014.

## 4 Sending Notification to Postal Receiving Service Providers

In July 2016, the Ministry of Economy, Trade and Industry sent a notification to postal receiving service providers of the overview, etc. of the amendment of the Act on Prevention of Transfer of Criminal Proceeds in 2014 in order to raise awareness about said amendment. In August 2016, the National Police Agency sent personnel to briefing sessions (twice) in To-
kyo and a briefing session in Osaka held by the Ministry to provide explanations concerning the overview, etc. of the amended Act.

## 5 Sending Notification to Telephone Forwarding Service Providers, etc

In May 2016, the Ministry of Internal Affairs and Communications sent to telephone forwarding service providers a notification of the overview of the amendment of the Act on Prevention of Transfer of Criminal Proceeds in 2014 and verification items at the time of transactions in order to raise awareness about information that they need to acquire as telecommunications business operators.

## 6 Briefing Sessions for Judicial Scriveners

The National Police Agency dispatched its officers to seminars for judicial scriveners, which were held by the Japan Federation of Shiho-Shoshi Lawyer’s Associations in two places in January and November 2016, and provided explanations on the outline of the amendment of the Act on Prevention of Transfer of Criminal Proceeds in 2014.

## 7 Publication of List of Reference Cases of Suspicious Transactions

Competent administrative authorities published the “List of Reference Cases of Suspicious Transactions,” which indicates red flags to which the business operators should pay particular attention to find any suspicious activities behind them when performing the reporting obligation.

## 8 PR on Website

The website of JAFIC has been created within the National Police Agency website, and its annual reports, the current status of JAFIC's activities, and a description of the Act on Prevention of Transfer of Criminal Proceeds are made available for public viewing.

Top page of the website of the National Police Agency

http://www.npa.go.jp

Top page of the website of JAFIC

http://www.npa.go.jp/sosikihanzai/jafic/index.htm

JAFIC Annual Report
Poster

# 平成28年10月1日施行 改正 犯罪收益移転防止法

マネー・ローンダリング、

テロ資金供与防止のため

“取引時の確認方法”等が

改正されます。

ご協力、お願いします。

② 法人の“実質的支配者”について

“謙決権の保有その他の手段”により、当該法人を支配する「自然人」まで邇って確認します。

また、以下の取引についても改正がありますのでご協力をお願いします。

・マネー・ローダリングの疑いがあると認められる取引その他の顧客管理を行う上で特別の注意を要する取引についても取引時確認が必要となります。

・1回当たりの取引の金額を減少させるために、取引を分割したことが一見して明らかである場合についても取引時確認が必要となります。

・外国の重要な公的地位にある者等との取引がハイリスク取引に追加されます。

ハイリスク取引はマネー・ローダリングのリスクがい取引のことを指します。また、当取引が200万円を超える期間の移転を伴う場合には、黄皮及び收入の状況を確認が必要です（司法士等士等者を除く）。

警察厅 金融厅 総務省 法務省 財務省 厚生労働省 農林水産省 経済産業省 国土交通省

Leaflet

## Paragraph 2 Calling for Actions by Specified Business Operators upon the Adoption of the United Nations Security Council Resolutions

When the United Nations Security Council adopts a resolution requiring countries to freeze the funds or other assets related to any persons or entities in order to prevent and suppress terrorism and terrorist financing, the National Police Agency, in cooperation with relevant Ministries and Agencies, shall disseminate the content to specified business operators (excluding lawyers, judicial scriveners, certified administrative procedures specialists, certified public accountants and tax accountants; the same applies in this paragraph) and request the thorough CDD and reporting of suspicious transactions on persons or entities subject to the resolutions concerned. And, the targeted persons or entities shall be listed on the website of JAFIC.
1 Measures based on the United Nations Security Council Resolutions (UNSCRs)

Japan implements targeted financial sanctions to freeze assets of persons or entities associated with the Taliban according to UNSCRs concerned. Every time the list of such parties is revised, the National Police Agency requires specified business operators through supervisory authorities to ensure CDD and reporting of all suspicious transactions. Such a requirement was made a total of 12 times in 2016.

## 2 Measures based on the FATF Public Statement

The FATF Plenary held in February, June and October 2016 adopted the Statement which called on all FATF members and other jurisdictions to apply countermeasures to protect the international financial system from ML/TF risks emanating from Islamic Republic of Iran and North Korea. In response, the National Police Agency has issued a notice through supervisory authorities that specified business operators should properly perform CDD and reporting suspicious transactions.

The Plenary also adopted a statement concerning the jurisdictions having strategic deficiencies in the measures against ML/TF, to which the National Police Agency referred in the notice above.

## Paragraph 3 National Risk Assessment of Money Laundering and Terrorist Financing

## 1 Backgrounds

In modern society, where the advance of IT and the globalization of economic activities and financial services are proceeding, the situation surrounding ML/TF is constantly changing. To strenuously implement AML/CFT, global actions based on cooperation between countries need to be taken.

The FATF Recommendations revised in February 2012 (new FATF 40 Recommendations) call on individual countries to identify and assess risks of ML/TF for the country.

In light of the fact that legal persons and legal arrangements are being misused for money laundering and tax evasion due to a lack of transparency over their ownership and control, at the G8 Lough Erne Summit held in June 2013, an agreement was reached on the G8 Action Plan Principles to prevent the misuse of legal persons and legal arrangements, which calls for concrete actions including that authorities should understand the risks to which their AML/CFT regime is exposed and implement proportionate measures to target those risks.

Japan formulated the national action plan in the same month to establish an inter-ministerial working team consisting of the Financial Service Agency and other relevant ministries and agencies under the chair of the National Police Agency and conduct the national risk assessment. Based on this national action plan, relevant ministries and agencies published the “National Risk Assessment of Money Laundering and Terrorist Financing” in December 2014.

Furthermore, through the partial amendment of the Act on Prevention of Transfer of Criminal Proceeds in 2014, the National Public Safety Commission has been required to prepare and
publish the National Risk Assessment Report every year since 2015, and the Commission published the report for 2016 in November.

## 2 Purpose

The national risk assessment should serve as a basis of the risk-based approach which specified business operators apply in order to perform AML/CFT measures more effectively and efficiently in a way commensurate with the level of risk of each transaction and the customer or business relationship identified through the NRA.

## 3 Overview of National Risk Assessment Report

The National Risk Assessment Report, published in November 2016, analyzed the specific characteristics of the following risk factors, measures to mitigate the risk and example cases of arrest, and indicated the risk level.

The National Risk Assessment Report is available on JAFIC's website.

Factors related to products and services

Transactions related to deposit and savings accounts, domestic exchange, safe deposit boxes, bills, cheques, etc.

Factors related to transaction type

Non-face-to-face transactions, cash transactions, etc.

Factors related to countries and jurisdictions

Countries and jurisdictions indicated in the FATF Public Statement of their deficiencies on measures against ML/TF

Factors related to customers

Anti-social forces, international terrorists, non-residents, etc.

## Section 3 Requests to Submit Reports and Opinion Statements in 2016

When suspicion surfaces during the investigation of cases including special fraud cases by the Prefectural Police with regard to the possibility that a specific business operator (excluding lawyers; the same applies in this section) violates the obligation of customer identity verification and other matters prescribed in the Act on Prevention of Transfer of Criminal Proceeds, the National Public Safety Commission/the National Police Agency make requests to the alleged specified business operators for submission of reports, and make opinion statements to competent administrative authorities.

## 1 Requests to Submit Reports and Opinion Statements by the National Public Safety Commission/the National Police Agency

In 2016, the National Public Safety Commission/the National Police Agency made 9 requests to submit reports to Postal Receiving Service Providers. In addition, based on the past reports submitted, they issued to competent administrative authorities in charge of supervising specified business operators opinion statements to the effect that necessary
measures should be implemented in order to rectify violations of the Act on Prevention of Transfer of Criminal Proceeds by specified business operators in 2016; specifically, eight statements to the Minister of Economy, Trade and Industry, which is the authority over postal receiving service providers.

No onsite inspections by police officers were performed.

Table 3-1 Number of Supervisory Actions

Year	2012	2013	2014	2015	2016
Number of requests to submit reports to specified business operators	9	11	10	11	9
Postal receiving service providers	8	10	8	9	9
Telephone receiving service providers	1	0	0	0	0
Telephone forwarding service providers	0	0	2	0	0
Providers of both postal receiving service and telephone forwarding service	0	1	0	2	0
Number of directions to conduct inquiry to prefectural police	3	1	5	2	0
Postal receiving service providers	3	0	4	2	0
Telephone forwarding service providers	0	0	1	0	0
Providers of both postal receiving service and telephone receiving service	0	1	0	0	0
Number of opinion statements made to competent administrative authorities	10	10	11	10	8
Postal receiving service providers	8	9	9	8	8
Telephone receiving service providers	1	1	0	0	0
Telephone forwarding service providers	0	0	2	2	0
Certified administrative procedures specialists	1	0	0	0	0

## 2 Issuing of Rectification Order by Competent Administrative Authorities Based on Opinion Statements

In 2016, no rectification orders were issued by competent administrative authorities based on Opinion Statements issued by the National Public Safety Commission/the National Police Agency.

Table 3-2 Number of Rectification Orders by Competent Administrative Authorities

Year	2012	2013	2014	2015	2016
Category
Number of rectification orders based on Opinion Statements	9	7	3	5	0
Postal receiving service providers	8	6	3	5	0
Telephone receiving service providers	0	0	0	0	0
Certified administrative procedures specialists	1	1	0	0	0