ness was that there was no system in place to collect reported information or to disseminate it to investigative authorities.

To address these problems, “the Act on Punishment of Organized Crimes” was enforced in February 2000 in Japan based on “The 40 Recommendations” as revised in June 1996. This law represented progress in regulations against criminal proceeds on several points. Firstly, the scope of predicate offences for money laundering was extended to include other serious crimes besides drug-related crimes. Secondly, the scope of crimes subject to the suspicious transaction reports regime was also extended to include other serious crimes besides drug crimes. Thirdly, the law mandated the Financial Supervisory Agency (later reorganized to the Financial Services Agency) to serve as the FIU of Japan, and the Japan Financial Intelligence Office (JAFIO) was established within the agency, accordingly.

## 3 Enforcement of “the Act on Punishment of Financing of Offences of Public Intimidation” and “the Act on Customer Identification by Financial Institutions”, and Revision of “the Act on Punishment of Organized Crimes”

As a major development after the terrorist attacks in US, “the Act on the Punishment of Financing of Offences of Public Intimidation” was enforced in July 2002 as a domestic law to implement “the International Convention for the Suppression of the Financing of Terrorism” (not yet ratified at that time), criminalizing terrorist financing and collecting of funds for terrorism. At the same time as the adoption of “the Act on Punishment of Financing Offences of Public Intimidation”, “the Act on Punishment of Organized Crimes” was partially revised, so that the terrorist financing/fund collection offence was included in predicate offences. Moreover, terrorist funds were stipulated as criminal proceeds, which means that assets suspected of terrorist funds are now subject to reporting as suspicious transactions.

Also, to implement the obligations of customer identification and record keeping required under the said Convention and the Recommendations, “the Act on Customer Identification by Financial Institutions (Customer Identification Act)” was adopted (enforced in Jan. 2003).

Because of frequent abuse of bank accounts under other or fictitious names for offences such as Billing Fraud, the Customer Identification Act was revised in December 2004 to provide sanctions to transfer (both receiving/assignment) of passbooks.

## 4 Development of “the Act on Prevention of Transfer of Criminal Proceeds”

In response to the further tightening of “The 40 Recommendations” in 2003 to extend the scope of businesses subject to customer due diligence (CDD) and other obligations to include DNFBPs, “the Headquarters for Promotion of Measures Against Transnational Organized Crime and International Terrorism”, with the Chief Cabinet Secretary as head thereof, in December 2004, publicized “the Action Plan for Prevention of Terrorism” including consideration of the implementation of the re-revised Recommendations. In November 2005, the abovementioned Headquarters decided that the National Police Agency would draft the bill for implementation of the re-revised Recommendations and that the FIU function would be transferred from the Financial Services Agency to the National Public Safety Commission. In addition, the competent administrative authorities would provide guidance and supervision.