Silviase/jgov_v1.4_full_ann huggingface dataset:
times, in 3 different ways. During the authentication procedure, if more than one mistake occurs, access to the terminal is denied to prevent unauthorized use.

(3) Surveillance of Terminal

All processing operated at the terminals, such as file inquiries and printing, is monitored and recorded by the surveillance software. This allows for tracing survey in case of wrongful operation, and prevents improper use of information within the organization.

(4) Physical Measures of Terminals

Each terminal is firmly affixed to a desk with a security wire, to prevent theft.

(5) Strengthening of Server Management

The server that contains reporting information is located in a server room with adequate security measures, and only qualified staffs are allowed to enter.

(6) Encryption of Terminal's Hard Disk Drive Information

The hard disk drives on the terminals that are used to access the database system are all encrypted. Therefore, even if the hard disk drives are removed and taken out, the information recorded in the hard disk drive and all related programs will still be inaccessible.

(7) Encryption of Circuit

Transmission between the server and the terminals is encrypted with a special circuit.

## Section2 Situation of Suspicious Transaction Reports

## 1 The change in the number of reported cases

As described in Chapter 1, although the system of suspicious transaction reports was established with the enforcement of the Anti-Drug Special Provisions Law in 1992, less than 20 cases were reported 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 the Punishment of Organized Crime in 1999 (enforced in February 2000), crimes which are subjects of suspicious transaction reports were expanded from drug-related crimes to serious crimes, and the number of reports exceeded 1,000 cases in 1999. Since the enforcement of the Act on the Punishment of Organized Crime in the year 2000, the number of reports has increased each year, and has rapidly increased since the enforcement of the Act on Prevention of Transfer of Criminal Proceeds. The number of reports in 2010 was 294,305, an increase of 21,980 cases (8.1%) compared to the previous year.

Table 4-1 Trend Diagram of Number of Reports of Suspicious Transactions (1992-2000)

1992	1993	1994	1995	1996	1997	1998	1999	2000
Yearly number of Reports Received	12	17	6	4	5	9	13	1,059	7,242

Note: The reports of 1992 are those made after July, when the reporting system was established.
Figure 4-2 Trend Diagram of Number of Reports of Suspicious Transactions (2001-2010)

Yearly Number of Reports Received	12,372	18,768	43,768	95,315	98,935	113,860	158,041	235,260	272,325	294,305
Yearly Number of Reports Offered	6,752	12,417	30,090	64,675	66,812	71,241	98,629	146,330	189,749	208,650

Note 1: "Number of Reports Received" (2001-2010) is the total number of the reports received by the Financial Services Agency(JAFIO) from January 2001 to March 2007 and those received by the National Public Safety Commission/the National Police Agency (JAFIC) after April 2007.

Note 2: "Number of Reports Offered" (2001-2010) is the total number of the reports offered by JAFIO to the National Police Agency from January 2001 to March 2007 and those offered by JAFIC to investigative agencies etc. after April 2007.

The factors contributing to the increase in reporting numbers can be thought to be

☐ The monitoring system for antisocial forces and illegal funds transfer has been reinforced by financial institutions, with the progress of compliance awareness in society.

☐ The implementation of client management measures based on the Risk Base Approach has been gradually conducted.

Moreover, financial institutions, etc. have taken various measures, both tangibly and intangibly. In particular, some financial institutions whose STRs have been increased, have promoted training on countermeasures against money laundering using resources, such as handbooks for employees, to improve the ability of individual employees, while having strengthened the system to identify suspicious transactions, by increasing personnel in charge of money laundering countermeasures and the introduction of the detection systems for suspicious transactions.
## 2 Number of Reports by Business Types

The number of suspicious transaction reports that each category of business operators filed in 2010 is shown in table 4-2. Banks have the highest number of reports with 271,236 cases, or 92.2% of all reports, followed by Shinkin bank and Credit cooperative (11,156 cases, 3.8%), and financial instrument business operators (5,679 cases, 1.9%).

The number of reports filed by business operators who were newly required to report suspicious transactions in accordance with full enforcement of the Act on prevention of Transfer of Criminal Proceeds in March 2008. (Financial Leasing operators, Credit Card operators, Real Estate Agents, Dealers in Precious Metals and Stones, Postal Receiving Service Providers, Telephone Receiving Service Providers) totaled 1,776, an increase of 4.7% over last year.

Table 4-2 Number of Suspicious Transaction Reports by Each Business Type

Business Type	2009	2010	Increase/Decrease rate
Number of reports	%	Number of reports	%	Number of reports	%
Financial Institutions etc.	Bank	252,415	92.7%	271,236	92.2%	18,821	7.5%
Shinkin Bank and Credit Cooperative	10,941	4.0%	11,156	3.8%	215	2.0%
Financial Instruments Business	3,828	1.4%	5,679	1.9%	1,851	48.4%
Money Lending Business	1,148	0.4%	634	0.2%	-514	-44.8%
Norinchukin Bank etc.	281	0.1%	357	0.1%	76	27.0%
Labour Bank	161	0.1%	243	0.1%	82	50.9%
Insurance Company	183	0.1%	202	0.1%	19	10.4%
Fund Transfer Company	73	0.0%	73	-
Currency Exchanging Operator	418	0.2%	1,970	0.7%	1,552	371.3%
Other	1,253	0.5%	979	0.3%	-274	-21.9%
Financial Leasing Operator	60	0.0%	83	0.0%	23	38.3%
Credit Card Operator	1,510	0.6%	1,617	0.5%	107	7.1%
Real Estate Agent	33	0.0%	21	0.0%	-12	-36.4%
Dealer in Precious Metals and Stones	0	0.0%	19	0.0%	19	-
Postal Receiving Service Provider	92	0.0%	36	0.0%	-56	-60.9%
Telephone Receiving Service Provider	2	0.0%	0	0.0%	-2	-100.0%
Total	272,325	100.0%	294,305	100.0%	21,980	8.1%
## 3 Number of notification cases classified by notification methods

According to notifications of suspicious transaction by notification method, notification by electronic application using the e-governance on-line window (e-Gov), and notification other than notification by electronic application (sending documents, etc. to the supervising administrative government agency) are described in Table 4-3.

Table 4-3 Number of Reports by Each Notification Method

Notification Methods	2008	2009	2010
Number of reports	%	Number of reports	%	Number of reports	%
Electronic Application	111,921	47.6%	156,291	57.4%	172,394	58.6%
Other Methods	123,339	52.4%	116,034	42.6%	121,911	41.4%
Total	235,260	100%	272,325	100%	294,305	100%

Notification rate by electronic application in 2010 was 58.6%, an increase of 1.2 points over the previous year. JAFIC has determined to make efforts to publicize notification by electric application, through workshops targeting specified business operators in order to reduce the load of the notifying person.

Section3 Use of Suspicious Transaction Reports

## Paragraph1 Dissemination to Investigative Authorities

JAFIC provides investigative authorities with a part of STRs reported by specified business operators that have been judged to be conducive to the investigation of money laundering crimes or predicate offences. Investigative authorities are Prefectural Police, Public Prosecutors Office, Narcotics Control Department, Japan Coast Guard, and Customs and Securities and Exchange Surveillance Commission.

In 2010, 208,650 reports were disseminated to investigative authorities, an increase of 18,901 cases (10.0%) over the previous year (See figure 4-2). In addition, a request to send copies of records of the information regarding suspicious transaction from an investigative authority was received, so JAFIC sent the copies of the corresponding STRs.

The number of disseminated reports in 2010 accounts for 70.9% of all the STRs and this percentage is an increase of 1.2 points over the previous year. The disseminated information is used by investigative authorities to assist investigations concerning money laundering crimes and predicate offences and for anti-organized crime measures including deprivation of criminal proceeds.

## Paragraph2 Outlook of How STRs are Used

The number of cases cleared by prefectural police that were initiated with information regarding STRs (hereinafter referred as “initiated cases”) was 390 cases in 2010, and this is the highest number since the Act on the Punishment of Organized Crime was enforced in 2000. The total number of initiated cases since that year is 1,127 cases.

Table 4-4 shows the initiated cases categorized by crime type, with fraud making up the largest portion at 66.2%.
Table 4-4 Number of Initiated Cases of Each Crime Type

Year Crime	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010
Fraud	3	2	4	6	14	34	81	132	265	258
Violation of the Act on Prevention of Transfer of Criminal Proceeds	6	15	48	76
Drug Offenses	1	2	1	16
Violation of the Money Lending Control Act and the Investment Act	1	3	3	1	2	3	12	9	9
Violation of the Immigration Control and Refugee Recognition Act	2	5	1	2	12	1	3	4	5
Forgery of documents etc.	2	1	2	1	2	2	1	4
Embezzlement	2	1
Gambling	1	1	1
Violation of the Financial Instruments and Exchange Act	2	1	2
Other	5	5	4	2	2	3	9	6	20
Total	14	16	12	13	18	50	99	175	337	390

Note 1: This is the number held by the National Police Agency

Note 2: "Violation of the Act on Prevention of Transfer of Criminal Proceeds" includes violation of the Customer Identification Act, and "Violation of the Financial Instruments and Exchange Act" includes violation of the Securities and Exchange Act

Note 3: "Drug offenses consist of each violations" of the Special Drug Act, the Stimulants Control Act, the Cannabis Control Law, the Narcotics and Psychotropics Control Act and the Opium Act.

The number of cracked cases of money laundering from the initiated cases in 2010 was 17 cases. Table 4-5 shows initiated cases by crime type, and fraud and violation of the Money Lending Business Law and the Law Concerning Receiving of Capital accounted for 70.6%.
Table 4-5 Number of Cleared Cases of Money Laundering following the Initiated Cases

Year Crime	2007	2008	2009	2010
Fraud	6	2	4	8
Violation of the Money-Lending Control Act and the Investment Act	1	6	4	4
Other	2	1	1	5
Total	9	9	9	17

Regarding the number of STRs used for investigation by prefectural police in 2010, 1,642 STRs were used for initiated cases, as shown in Table 4-6. Other than these, there were 86,418 STRs used for other investigations.

Table 4-6 Number of STRs Used

2007	2008	2009	2010
Number of STRs used for investigation of initiated cases	907	668	1,261	1,642
Number of STRs used for investigation of cases other than above mentioned	23,079	44,199	68,680	86,418
Total	23,986	44,867	69,941	88,060

Note 1: "Number of STRs used for investigation of initiated cases" includes the number of all STRs used by the time these cases were cleared.

Note 2: In cases where investigations have been initiated by using STRs but still ongoing, these STRs are counted as "STRs used for investigation of cases other than above mentioned".

Also in the investigations not initiated with STRs, many STRs are used for criminal investigation that started from a different source, for further crimes, and for locating criminal proceeds. In addition, they are used as essential intelligence to promote anti-organized crimes measures, such as for revealing sources of income or operation of Boryokudan's fund.

Moreover, JAFIC tries to obtain a realistic view of the movement of funds of the antisocial forces such as Boryokudan by comprehensive analysis of information contained in the STRs of customers, by matching them with other STRs related to the same customers that were reported in the past; information accumulated for organized crime, countermeasures as well as publicly available information.

These analyses have revealed that antisocial forces make use of Boryokudan affiliated companies, investment partnerships and other kind of corporate vehicles, utilize their funds in various ways and transfer a large amount of funds overseas.

Although it can be assumed that the resources of a large part of the funds handled by antisocial forces originate from criminal proceeds, there are many cases that their involvement in particular predicate offences is obscured because various fund activities or utilization in various ways make its source unclear.

As recent cases of arrests typically show, antisocial forces often use affiliated companies as cover, feign normal transactions that hide any connection with Boryokudan, receive cooperation from others who
have various information and specialized knowledge, and thus use their funds. This is one of the main factors which make the fund-raising activity by antisocial forces opaque.

Therefore, in order to have a dearer vision of the actual conditions of fund-raising activities, JAFIC is convinced that it is important to continue to monitor and trace the movement of funds of antisocial forces, and to enhance the control of illegal activities committed in the course of fund-raising activities through the utilization of the analysis of STRs as well as close cooperation with authorities concerned, that is, investigative authorities including Customs and Securities and Exchange Surveillance Commission, as well as foreign FIUs.
# Chapter 5

# Promotion of International Cooperation

## Section1 Need for International Cooperation on AML/CFT Measures

Economy and financial services becoming more widely globalized today, and money transfers can be made instantly across borders. There are a number of cases in which criminal and terrorist organizations attempt to evade law enforcement authorities' investigations by transferring criminal proceeds to foreign countries, or funding terrorists through third-party nations.

Non-cooperative jurisdictions, or those taking insufficient AML/CFT measures are likely to be misused as loopholes for money laundering or terrorist financing.

Taking these situations into consideration, it is essential for relevant authorities in each jurisdiction to cooperate closely with each other and it is also important for all jurisdictions, based on the latest modi operandi of money laundering and terrorist financing, to take necessary and sufficient measures all together with a view to detect money laundering and terrorist financing by tracing accurately the transfer of criminal proceeds across borders, and to prevent the abuse of international financial system by criminal organizations for money laundering and terrorist financing.

Therefore, measures against money laundering and terrorist financing have been taken by various international institutions including FATF (Financial Action Task Force).

Since the inception of the Japan Financial Intelligence Office (JAFIO), Japan FIU has actively participated in the discussions at FATF and other international institutions.

JAFIC (Japan Financial Intelligence Center), which is a Japan's second FIU and was established in April 2007, is expected to seek to collaborate even more vigorously with other countries in promoting implementations of global and effective AML/CFT measures.

## Section2 Activities of International Institutions and Japan's Participation

## Paragraph1 FATF

## 1 FATF

FATF (Financial Action Task Force) is an intergovernmental body established following the "Economic Declaration" of the 1989 Arche Summit Communiqué to promote international cooperation on AML measures. After the September 11th US terrorist attacks of 2001, FATF has also taken the initiative in the promotion of international CFT measures.

FATF has 34 member jurisdictions (including Japan) and 2 international institutions as of December 2010.
## 3 Participation of JAFIC in FATF

As one of the founding members of FATF, Japan has been a very active contributor to its work since its establishment in 1989. Japan chaired the plenary between July 1998 and June 1999 and the former FIU of Japan, JAFIO, which had been established within the Financial Services Agency, participated in tri-annual plenary meetings and working groups which conduct analysis of money laundering typologies. Even after the functions of FIU were transferred from JAFIO to JAFIC, JAFIC has continued to actively participate in the discussion for new frameworks of AML/CTF measures. In

FATF plenary meeting

2010, it sent staff members to the plenary meetings held three times a year and the typology meetings.

## Paragraph2 APG

## 1 APG

APG (Asia/Pacific Group on Money Laundering) is an international cooperative body whose establishment was decided in February 1997 at the FATF 4th Asia/Pacific Money Laundering Symposium held in Thailand to promote anti-money laundering measures in non-FATF member jurisdictions in the Asia/Pacific region.

As of the end of December 2010, the APG consists of 40 jurisdictions, including Japan.

## 2 Activities of APG

The main activities of APG are as follows.

1. Promotion of compliance with the FATF Recommendations in the Asia/Pacific region

2. Promotion of legislation on AML/CFT in the APG member jurisdictions

3. Mutual Evaluations on APG member jurisdictions

4. Information exchange and analysis on the trend of money-laundering in the Asia/Pacific region

## 3 Participation of JAFIC in APG

Japan is one of the founding members of APG and has been actively contributing to the activities of APG, much as it has with FATF. For example, the first and second typologies meetings in March 1998 and March 1999 were both held in Tokyo and Japan took the role of co-chair with Australia between July 2004 and June 2006.

This approach has not been changed even after the functions of FIU were transferred to JAFIC. Since its establishment, JAFIC has continued to send staff members to the annual meetings and the typology meetings. In July 2010, the delegates participated in the annual meeting held in Singapore, and discussed the Mutual Evaluations of Brunei, Solomon Islands, Tonga, and other jurisdictions.

Furthermore, staff members were also sent from JAFIC to the typology meeting held in Bangladesh in October 2010 to participate in the study on the best practice of information analysis conducted by FIUs and on the latest modus operandi and trend of money laundering.

## Paragraph 3 Egmont Group

## 1 Egmont Group

The Egmont Group is an international forum established mainly by FIUs of several European nations and
the United States in April 1995 with the goal of promoting cooperation on information exchange trainings and expertises between FIUs around the world engaging in AML measures. The group is named after the Egmont castle in Belgium where the first plenary session was held. Although the Egmont Group was established as an informal forum at the beginning, it has become an internationally-recognized official body at present, through the adoption of the Egmont Group Charter at the May 2007 annual plenary in Bermuda and the establishment of its permanent Secretariat in Toronto, Canada. The Egmont Group consists of FIUs of 120 jurisdictions as of the end of December 2010.

## 2 Various Meetings of the Egmont Group

In addition to the annual plenary meeting which representatives from all member FIUs attend, the Egmont Group has the following working groups, which are held about three times a year respectively.

1. The Legal Working Group (LWG) reviews the candidacy of potential members and handles all legal aspects and matters of principle within Egmont members.

2. The Outreach Working Group (OWG), which works to create a global network of FIUs by identifying candidates for membership and working with those countries to ensure that they meet international standards

3. The Training Working Group (TWG) identifies training needs and opportunities for FIU personnel, and conducts training seminars for Egmont members as well as for non-Egmont jurisdictions.

4. The Operational Working Group (OpWG) seeks to bring FIUs together on typologies development and long-term strategic analytical project.

5. The IT Working Group (ITWG) provides advice and research analysis support software for IT systems of the new and existing FIUs.

## 3 Participation of JAFIC in the Egmont Group

Upon establishing JAFIO in February 2000 within the Financial Supervisory Agency (later the Financial Services Agency) as a Japanese version of FIU, Japan applied for membership in the Egmont Group, and was granted it in May 2000 at the 8th annual plenary held in Panama.

Since then, JAFIO had actively participated in the activities of the Egmont Group. It sent staff members to working group meetings and the annual plenary meetings, and took part in the drafting of the Egmont Group Charter. JAFIO also undertook the role of sponsor FIU (in co-sponsorship with the Thailand FIU) in the application procedures for Myanmar FIU, which is currently not yet an Egmont Group member.

JAFIC, which took over the functions of Japan FIU from JAFIO in April 2007, was granted the Egmont Group membership as the new Japan FIU at the 15th Annual Plenary Meeting held in Bermuda in May 2007.

In 2010, its staff members were sent to the working group meetings in Mauritius in March, the annual meeting held in Columbia in June and the working group meetings in Moldova in October. They participated in the discussions on the principles related to information exchange between FIUs and other matters.

Moreover, JAFIC has taken over the role of sponsor FIU for the FIU of Myanmar in the application procedures into the Egmont Group, from the JAFIO.

Egmont Group Meeting (Moldova)