## 4 Identification of Suspicious Transactions

Specified business operators are expected to determine whether there is any suspicious activity behind the transaction concerned based on their own knowledge and experience in their particular field of business, also taking into account some factors including the nature of transactions or types of customers. In other words, specified business operators should determine whether the transactions are suspected of being related to ML/TF in the context of each transaction conducted. However, not all of them identify ML/TF risks in every transaction and they may find it difficult to make an appropriate determination. Therefore, competent administrative authorities that oversee specified business operators have announced "reference cases of suspicious transactions," based on the characteristics of respective specified business operators. These cases are provided as a reference to help specified business operators find or identify suspicious transactions in their day-to-day operations. Although all the transactions that appear to match the listed samples in the reference cases do not necessarily have to be reported as suspicious, any transaction that specified business operators determine as should be reported. As a result of the full enforcement of the amended Act on Prevention of Transfer of Criminal Proceeds on October 1, 2016, a provision concerning determination related to suspicious transaction reporting was introduced to require that specified business operators make determination as to whether or not to submit a suspicious transaction report under a method(Note) prescribed by the competent ministry's relevant ordinance while taking account of the contents of the NRA in addition to the results of verification at the time of transactions.

Note: Methods, etc. of verification whether there is a suspicion of ML through comparison of the nature of transactions with those of usual transactions, comparison with past transactions with the same customer, and checking of the consistency with the content verified at the time of transactions, etc.

## Section 2 Situation of STR Filings in 2016

## 1 Transition of the Number of STR Filings

Although the suspicious transaction reporting system was established with the enforcement of the Anti-Drug Special Provisions Law in 1992, less than 20 reports were received each year between 1992 and 1998, largely because the subjects of reporting was limited to proceeds derived from drug-related crimes. Under these conditions, that reporting system could not be considered to be fully functional. However, since the enactment of the Act on Punishment of Organized Crimes in 1999, crimes subject to suspicious transaction reports were extended besides drug-related crimes to include other serious crimes as specified by the act, and the number of reports received exceeded 1,000 cases in the same year. Since the enforcement of the Act on Punishment of Organized Crimes in the year 2000, the number of reports has increased every year, and has kept increasing since the partial enforcement of the Act on Prevention of Transfer of Criminal Proceeds in 2007. The number of reports received in 2016 was 401,091, increasing by 1,583 cases (0.4%) from the previous year (see Figure 4-3).