## I ntroduction

Crime syndicates such as Boryokudan gangsters gain criminal proceeds by way of various crimes, and allocate them to commitment of other crimes and procurement of weapons in order to maintain and strengthen the syndicates. To weaken and destroy crime syndicates, taking measures such as identifying and confiscating criminal proceeds as much as possible and using them for the recovery of damage are extremely important. In response, criminals carry out so-called money laundering, i.e., consecutive transfers of criminal proceeds to conceal the source and beneficial owner, in an attempt to avoid the detection of the proceeds and arrest by investigative agencies.

To counter these criminals’ movement, the efforts to prevent or detect such transfers and to confiscate the criminal proceeds have been made through cooperation with specified business operators such as financial institutions. For example, based on the Act on Prevention of Transfer of Criminal Proceeds, they ensure the traceability of the proceeds by customer identification and record-keeping, and report the transactions suspected of money laundering to the administrative agencies.

It has been about four years since the total enforcement of the Act on Prevention of Transfer of Criminal Proceeds. During this period, the number of reported suspicious transactions has continued to rise and so has the number of arrests triggered by such reports, which suggests the steady establishment of law enforcement.

Meanwhile, techniques of money laundering have become more complex and more sophisticated, resulting in abuse of business operators not specified in the Act on Prevention of Transfer of Criminal Proceeds and cases of specified business operators' overlooking money laundering due to failure to detect suspicious transactions. The Financial Action Task Force (FATF) that leads the international measures against money laundering has pointed out that Japan's Customer due diligence systems are inadequate. Taking into account this and other domestic and international situations, the bill for amendment of the Act on Prevention of Transfer of Criminal Proceeds was passed at the 177th session of the Diet in April 2011 and promulgated.

Chapter 2 provides an overview of the amended law. It is important that we continue to firmly implement measures against criminal proceeds while accurately understanding the criminal situation or international demands regarding money laundering. This requires the understanding and cooperation not only of specified business operators and related institutions, but also of the broad public of Japan. We hope that this annual report will help the public better understand our crime prevention efforts.

## (note)

Strictly speaking, administrative work related to the enforcement of the Act on Prevention of Transfer of Criminal Proceeds is carried out by the Director for Prevention of Money Laundering or an employee of the agency with such occupational title, but in this article, the organization, including employees of the agency, is described as the “Director for Prevention of Money Laundering” for convenience, except in special instances.

Furthermore, this organization is referred to under its common international title, JAFIC (Japan Financial Intelligence Center).

February, 2012

高須 一弘

Kazuhiro Takasu

Director for Prevention of Money Laundering