Silviase/jgov_v1.4_full_ann huggingface dataset:
to the relevant business sectors over STRs regime.

The National Police Agency drafted the bill, in cooperation with relevant ministries and agencies, quoting all references of Customer Identification Act and a portion of the Act on Punishment of Organized Crimes, and submitted it to the 166th National Diet session in February 2007. "The Act on Prevention of Transfer of Criminal Proceeds" was then adopted in March of that year. Partial enforcement of the act stipulating the transfer of the FlU was carried out in April of the same year, while the expansion of specified business operators subject to the CDD obligation and other remaining provisions were enforced in March, 2008. In April 2011, upon consideration of discussions on recommendations made under the 3rd FATF Mutual Evaluation of Japan, and in light of damages caused by billing fraud in Japan, the following amendments were made to the Act on Prevention of Transfer of Criminal Proceeds: additional points to verify on transactions of specified business operators; addition of call forwarding service providers to the list of specified business operators; addition of measures for accurate verification at the time of transactions; and strengthening punishments on illicit transfer of passbooks. The amended act was fully enforced in April 2013.

Following the G8 Action Plan Principles, Japan also expressed its strong commitment to it by announcing the Japan Action Plan in June 2013, according to which necessary actions including the national risk assessment of money laundering and terrorist financing should be undertaken.

The National Police Agency, together with other relevant government ministries and agencies, has as appropriate amended AML/CFT-related legislation including the Act on Prevention of Transfer of Criminal Proceeds and its subordinate decrees as well as various other ordinances, thereby appropriately responding to changes in social conditions and addressing the deficiencies identified in the FATF Mutual Evaluation Report (MER) of Japan.
# Section 3 Establishment of the Japan Financial Intelligence Center (JAFIC)

## 1 Background

As the scope of business subject to the preventive measures of money laundering and terrorist financing was extended by the Act on Prevention of Transfer of Criminal Proceeds besides financial institutions etc. to include designated non-financial businesses and professions (DNFBPs) such as real estate agents, dealers in precious metals and stones, and other business operators, it was determined that the National Police Agency should play the role of FIU given the facts that:

• the business operators subject to these obligations, and the type of business of these operators, no longer falls under the jurisdiction of the Financial Services Agency alone;

• the National Police Agency plays a major role in countering the boryokudan and other organized crime syndicates and in countermeasures against terrorism, and is better equipped to accurately analyze information.

The Act on Prevention of Transfer of Criminal Proceeds clarified that the National Public Safety Commission (NPSC), which exercises administrative supervision over the National Police Agency and is aided by it, is responsible for prompt and appropriate collection, arrangement, analysis, and dissemination of suspicious transaction reports (STRs) filed by specified business operators. The Act also granted the NPSC a function related to the handling of STRs including its dissemination to foreign FIUs as well as a function to complement supervisory measures against specified business operators. The Japan Financial Intelligence Center (JAFIC) was launched on April 1, 2007, within the Organized Crime Department, the Criminal Investigation Bureau of the National Police Agency, as Japan's new FIU to perform all these functions on behalf of NPSC, in tandem with the partial enforcement of the Act.

## 2 Mission and Structure

JAFIC is tasked with the following works in accordance with the Act on Prevention of Transfer of Criminal Proceeds.

• Collection, arrangement, analysis and dissemination of information on suspicious transactions to investigative authorities etc.

• Dissemination of information to foreign FlUs;

• Provision of information and complement of supervisory measures by administrative authorities to ensure that specified business operators take required measures;

JAFIC also plans and examines the legal system related to AML/CFT and various measures such as “the Guideline for Promotion of the Criminal Proceeds Control”. It also participates in various international AML/CFT standard setting activities.

The structure of JAFIC is illustrated in Fig. 1-2. It is currently composed of about 100 em-
Figure 1-2 Structure of JAFIC

ployees under the Director for Prevention of Money Laundering.

On the other hand, the “Task Force for fact-finding concerning criminal proceeds” is established in each Prefectural Police in charge of tracing criminal proceeds and investigating money laundering and other crimes.

## 3 Partners

While it is specified business operators to take responsibility for actual implementation of an-ti-money laundering measures according to the Act on Prevention of Transfer of Criminal Proceeds, JAFlC In addition to the collection, arrangement, analysis and dissemination of fi-nancial information, endeavors to get across knowledge or expertise it has accumulated with regard to Current money laundering thechi gues, methods and trends or legal systems and relevant countermeasures to support their AML/CFT efforts as well as better understanding of the general public. Relevant ministries and agencies in charge of supervising business oper-ators not only exercise the supervisory function to secure the fulfillment of obligations, but also provide support by issuing Lists of Reference Cases of Suspicious Transactions and holding seminars together with industry organizations. On the other hand, investigative au-
Figure 1-3 Anti-money Laundering Measures in Organization

thorities such as police, make contributions in the area of punishment of money laundering or predicate offences or confiscation of their proceeds.

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

The “Ministerial Meeting Concerning Measures against Crime” which was launched by a Cabinet Meeting Agreement in September 2003, frequently discusses anti-money laundering measures. 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 International Terrorism” was established in a Cabinet Meeting in August 2004.

## 4 Guideline for Promotion of the Criminal Proceeds Control

With an awareness of importance damaging the financial bases of criminal organizations, the police have been promoting countermeasures against criminal proceeds by, among others, cracking down on illegal acts and other fund raising activities undertaken by Boryoku-dan. The Act on the Prevention of Transfer of Criminal Proceeds is expected to make these countermeasures more effective with the cooperation of a wide range of business operators.
who may deal with criminal proceeds. The National Police Agency, playing a central part in enforcing the act, issued “the Guideline for Promotion of the Criminal Proceeds Control” with the notice of the Deputy Commissioner General of the National Police Agency in April 2007 with a view to enhancing countermeasures against criminal proceeds taken by police departments across the country

Fundamental items in carrying out measures against criminal proceeds indicated by “the Guideline for Promotion of the Criminal Proceeds Control” are composed of four core principles, six key areas and confidentiality of STR information as follows:

## 1 Core Principles for AML/CFT

(1) Promotion of voluntary efforts by specified business operators and of public awareness

(2) Analysis and utilization of information on criminal proceeds

(3) Promotion of crackdown on crimes related to criminal proceeds and deprivation of criminal proceed

(4) Promotion of international cooperation on criminal proceeds control

## 2 Key areas

(1) Arrangement of the system for the promotion of countermeasures

The National Police Agency and each prefectural police should develop a system necessary for countermeasures against criminal proceeds. Each prefectural police establish a Task Force for fact-finding concerning criminal proceeds and develop the investigation system for crimes related to criminal proceeds in each relevant division.

(2) Promotion of voluntary efforts by specified business operators and public awareness

The National Police Agency should provide information on the transfer of criminal proceeds, instruction and advice to specified business operators. The National Police Agency and each prefectural police force should conduct public relations and educational activities to deepen general understanding about importance of criminal proceeds control.

(3) Collection, arrangement and analysis of information on criminal proceeds

(3) Collection, arrangement and analysis of information on criminal proceeds

The National Police Agency should collect, arrange, analyze and disseminate information on criminal proceeds. Each prefectural police should collect the information necessary for effective countermeasures against criminal proceeds by maintaining close cooperation among relevant divisions.

(4) Promotion of countermeasures against criminal proceeds

The National Police Agency should provide instruction to and coordinate among prefectural police departments which investigate crimes related to criminal proceeds, as well as clarify actual conditions of criminal organizations etc. In order to cut off the source of funds for criminal organizations etc., each prefectural police department should promote investigation where STRs are utilized, and attempt to make arrests in a proactive manner by applying the Act on Punishment of Organized Crimes, the Anti-Drug Special Provisions Law and other laws, while it should also promote information collection activities.
## (5) Promotion to deprive Criminal Proceeds

Each prefectural police force shall carry out measures to prevent the transfer of criminal proceeds by not only arresting suspects, but also by detecting criminal proceeds and utilizing the temporary restriction order before institution of prosecution. Also, close coordination with the Public Prosecutor's Office shall be further strengthened with regards to the deprivation of criminal proceeds.

## (6) Promotion of international cooperation

The National Police Agency should take initiative in the areas of, for example, inter-FUI information exchange, compliance with the FATF Recommendations, and support the global compliance in an effort to enhance international cooperation on AML/CFT.

## 3 Confidentiality

Necessary and appropriate measures have to be taken to ensure confidentiality and prevent any leakage with regard to any use of STR information in any phase of their duties.

Figure 1-4 Overview of the Guideline for Promotion of the Criminal Proceeds Control
## Chapter 2

## Legislative Regime on AML/CFT

AML/CFT regime in Japan has been developed since the 1980s, in order to achieve the following three objectives:

(1) Criminalization of money laundering

(2) Confiscation of criminal proceeds

(3) Imposing CDD and other necessary obligation on financial institutions and DNFBPs (collectively referred to as "specified business operators")

Of these, (1) and (2) are primarily targeting criminal organizations to root out their sources of fund while (3) is intended to put in place preventive measures against money laundering in order to ensure the traceability and transparency of customers on which investigations for prosecution or confiscation can also rely.

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

Figure 2-1 Relationships of the Act on Prevention of Transfer of Criminal Proceeds, Act on Punishment of Organized Crimes, and the Anti-Drug Special Provisions Law

Purposes

•Assure the safety and peace of national life

•Assure the sound development of economic activities

Effects

•Confiscation of criminal proceeds

Provisions on prevention of transfer of criminal proceeds

The Act on Prevention of Transfer of Criminal Proceeds

Customer identification

Preparation and preservation

of transaction records, etc.

Reports of suspicious transactions

The Act on Punishment of Organized Crimes

Provisions on controlling criminal proceeds

The Anti-Drug Special Provisions Law

Punishment of money laundering

Managing enterprises etc. through illegal proceeds etc.

Concealment of criminal proceeds etc. (including drug crime proceeds)

Receipt of criminal proceeds etc. (including drug crime proceeds)

Confiscation

Confiscation of criminal proceeds

Collection of equivalent value

Temporary restraining order for confiscation or collection of equivalent value
## Section 1 Outline of the Act on Prevention of Transfer of Criminal Proceeds

The Act on Prevention of Transfer of Criminal Proceeds was created based on the two laws; the amended Customer Identification Act and a portion of the Act on Punishment of Organized Crimes in order to deal with changes in money laundering techniques more effectively and comprehensively in a way consistent with global standards set out by the FATF 40 Recommendations in 2003.

The Act provides for preventive measures in combating money laundering and terrorist financing, by imposing obligations on specified business operators to perform CDD, record keeping, filing STRs, etc. In 2011, the following amendments were made to the Act for the first time since it was enacted in 2007: addition of verifying details for transactions; addition of telephone forwarding service providers to the list of specified business operators; addition of measures for accurate verification at the time of transactions; and increased punishments on illicit transfer of passbooks, etc. The amended Act was fully enforced on April 1, 2013.

The following are few sections that will explain the important parts of the Act. For the fundamental structure of the Act, please refer to Fig. 2-2.

Figure 2-2 Overview of the Act on Prevention of Transfer of Criminal Proceeds

※ 1 Amongst financial institutions etc., those operators involved in foreign exchange are required to provide notification on money remitters in addition to the above.

$ ^{*} $ 2 Professions such as judicial scriveners, certified administrative procedure specialists, certified public accountants, and certified tax accountants are required to verify the information in ①only.

$ ^{*} $ 3 The Japan Federation of Bar Associations defines, in its bylaws, measures to ensure accurate verification on transactions, and preparation/preservation of verification records and transaction records by lawyers. These rules are based on examples of judicial scriveners and other professions contained in the Act on Prevention of Transfer of Criminal Proceeds.
## 1 Purpose of the Act (Article 1)

The purpose of the Act is to prevent the transfer of criminal proceeds and to ensure the appropriate enforcement of international treaties, etc., concerning the prevention of terrorist financing and thereby, to ensure 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 verification of customer identification data, preservation of transaction records or the like, and reporting of suspicious transactions by a specified business operator, as described in 3, coupled with other measures stipulated by the Act on Punishment of Organized Crimes and the Anti-Drug Special Provisions Law.

## 2 Criminal Proceeds (Paragraph 1 of Article 2)

The term “criminal proceeds” as used in the Act means criminal proceeds etc. prescribed in Article 2, paragraph 4 of the Act on Punishment of Organized Crimes or drug-related criminal proceeds etc. prescribed in Article 2, paragraph 5 of the Anti-Drug Special Provisions Law.

## 3 Specified Business Operators (Paragraph 2 of Article 2)

Any financial institution or DNFBP which falls under the Act and thus is required to perform CDD and other obligations, should be called “Specified business operator,” whose designation would occur in line with the FATF standards and also the domestic business context. At the time when the Act was enforced, nevertheless, it had already been put in place that financial institutions performed customer identification under the Customer Identification Act and its related regulations.

## Specified business operators

○Financial institutions (Item 1 through 36):

Bank; Shinkin bank; Federation of Shinkin banks; Labor bank; Federation of labor banks; Credit cooperative; Federation of credit cooperatives; Agricultural cooperative; Federation of agricultural cooperatives; Fishery cooperative; Federation of fishery cooperatives; Fishery processing cooperative; Federation of fishery processing cooperatives: Norinchukin Bank; Shokochukin Bank; Development Bank of Japan; Insurance company; Foreign insurance company, etc.; Small-claims/short term insurance business operator; Federation of fishery cooperatives for mutual aid; Financial instruments business; Securities finance company; Specially permitted business notifying person; Trust company; Self-trusteed companies; Real estate specified joint enterprise operator special business operators; Mutual loan company; Money lender; Call money market broker; Fund transfer companies; Futures commission merchant; Book-entry, transfer institution; Account management institution; electronic receivables recording organizations; Management Organization for Postal Savings and Postal Life Insurance; Currency exchanging operator

○Financial leasing operator (Item 37)

○Credit card operator (Item 38)
Real estate agents (Item 39)

Dealers in precious metals and stones (Item 40)

○Postal receiving service providers, telephone receiving service, providers and telephone forwarding service providers (Item 41)

○Lawyer or legal profession corporation (Item 42)

○Judicial scrivener or judicial scrivener corporation (Item 43)

Certified administrative procedures specialists or administrative scrivener corporation (Item 44)

○Certified public accountant or audit firm (Item 45)

○Certified public tax accountants or certified tax accountant corporation (Item 46)

## 4 Responsibilities of the National Public Safety Commission and FIU (Article 3)

The Act provides that the National Public Safety Commission has responsibilities to endeavor 1) to enhance public awareness on the importance of the prevention of the transfer of criminal proceeds in order to ensure specified business operators conduct appropriate measures in performing CDD, and to provide them with support including the provision of information on the modus operandi; regarding the transfer of criminal proceeds, and 2) to promptly and appropriately collect, arrange and analyze information on criminal proceeds including information on suspicious transactions reported by specified business operators so that such information can be effectively utilized in the investigation into criminal cases and related international cooperation.

## 5 Measures by Specified Business Operator

Under the Act, specified business operators are obligated to engage in the following matters.

Specified business operators, specified business affairs subject to obligations, specified transactions subject to the verification at the time of transaction, and related obligations are shown in Figure 2-1.

## (1) Verification at the time of transaction (Article 4)

In conducting transactions falling under “specified transactions” or whenever money laundering is suspected behind the transactions because of, for example, a suspicion of falsifying the purpose of transaction, specified business operators are required to perform CDD to verify identification data of a customer such as: the name and domicile by asking for his/her identification documents such as driver’s license; purpose and intended nature of the transaction; type of business; information on the beneficial owner; etc. (for professions such as judicial scriveners, administrative scriveners, certified public accountants and tax accountants, verification of identification data alone is applicable). For higher risk transactions, enhanced measures must be taken, which is requiring additional information as to assets/income of the customer. (For details, see the Japan Financial Intelligence Center (JAFIC) Website)

Methods of verification at the time of transactions are as shown in Figure 2-3.
## (2) Preparation and preservation of verification records (Article 6)

Prepare and keep records of verification records collected at the time of transaction, as well as measures taken for verification of the customer at the time of the transaction, for seven years from the day when the transactions were completed or terminated;

(3) Preparation and preservation of transaction records etc. (Article 7)

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

(4) Reporting of suspicious transactions (Article 8)

Report transactions that are suspected of being related to criminal proceeds to a competent administrative authority, except for professions such as judicial scriveners;

(5) Notification pertaining to foreign exchange transactions (Article 9)

In conducting exchange transactions pertaining to payment from Japan to foreign countries, 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 to ensure thorough and effective CDD measures to be taken (Article 10)

Specified business operators are required to perform on going due diligence, and to set up other systems as necessary.

(7) Measures by lawyers (Article 11)

It is established by special provision, that lawyers shall conduct measures relevant to those described in (1) through (3) and (6) above based on The Rule of the Japan Federation of Bar Associations in line with cases of judicial scrivener.

The CDD regime in which measures as described in (1) through (3) above are undertaken is intended to make the financial or other services less attractive to those who try to use them for money laundering or any other illicit purposes and to ensure traceability of illicit funds. Meanwhile, the STR regime as described in (4) in which reported information will be used for investigations into money laundering and/or predicate offences, is also intended to protect the financial system from misuse to ensure its soundness. Measures (as noted in (6)) are intended to ensure accuracy of the customer identification process during transactions, making the process more efficient. These measures are expected to help business operators be more aware of money laundering risks, facilitating a greater degree of comprehensiveness and efficiency.

The purpose of notification pertaining to foreign exchange transactions described in (5)