Silviase/jgov_v1.4_full_ann huggingface dataset:
# Promotion of International Cooperation

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.

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, 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.

## Section1 Activities of International Institutions

## Paragraph1 FATF

## 1 FATF

FATF 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 2011.

## 2 Activities of FATF

## (1) Main Activities of FATF

1. Formulation and review of international standards in the "FATF Recommendations" concerning
AML/CFT measures

2. Monitoring the status of compliance with the FATF Recommendations in FATF member jurisdictions (Mutual Evaluations)

3. Promotion of compliance with the FATF Recommendations to non-member jurisdictions

4. Study on trends and modus operandi of money laundering and terrorist financing

## (2) The FATF Recommendations

a) FATF 40 Recommendations

In 1990, FATF laid out standards in "the 40 Recommendations", to be applied by each jurisdiction in the field of law enforcement, criminal justice, and financial regulations. In 1996, FATF revised the Recommendations to make the Suspicious Transaction Report obligatory, and for other matters.

With cooperation from private sectors, FATF star ted a re-evaluation process of the Recommendations in 2001 to improve AML/ CFT measures against the worldwide increasing sophistication and complexity of money laundering. The Recommendations was revised again and was publicized in June 2003.

The new "40 Recommendations" contained following additional elements.

○ Clear definition and expansion of scope of money laundering offense

O Undertaking customer due diligence including customer identification

○ Measures to prevent unlawful use of legal persons in relation to ML

○ Application of preventive measures to designated non-financial businesses (real estate agents, dealers in precious metals and stones) and professions (lawyers, accountants and other professions)

○ National and international cooperation among FIUs, supervisory authorities, law enforcement authorities and other governmental organizations handling issues related to money laundering

## b) FATF 9 Special Recommendations

In October 2001, a month after the September 11th US terrorist attacks, FATF held an Emergency Session to discuss countermeasures against terrorist financing. The agreement of the session was reflected in "the Special Recommendations" and was made public. Since FATF added a new recommendation on "cash couriers" to this in October 2004, it is now called "the 9 Special Recommendations on Terrorist Financing." Main components of the 9 Special Recommendations are as follows:

☐ Criminalization of the financing of terrorism

○ Requiring suspicious transaction reporting related to terrorism

○ Requiring financial institutions to include accurate and meaningful originator information (name, address and account number) on fund transfers etc.

c) Revision of FATF Recommendations

FATF 40 Recommendations and 9 Special Recommendations have been further revised for the Forth Mutual Evaluation.

## (3) Mutual Evaluations

FATF employs a peer review approach to encourage its members to implement the Recommendations. Member jurisdictions are evaluated by other members from various viewpoints such as law, regulation or control regime for anti-money laundering and terrorist financing, and arrest for money laundering crime. Mutual Evaluation of Japan was conducted three times in the past, in 1994, 1998, and 2008 (as for the Third Mutual Evaluation of Japan, See Paragraph 3 of Section 2).

## 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 and send staff members to the Plenary and working group meetings held every year.

FATF Plenary Meeting

## 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 2011, the APG consists of 41 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 Plenary Meeting and second typology meeting were both held in Tokyo in March 1998 and March 1999 respectively 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 Plenary Meeting and the typology meetings 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 expertise 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 127 jurisdictions as of the end of December 2011.

## 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 two times a year.

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) develops training methods 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 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

Egmont Group Meeting (Armenia)

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 Plenary Meeting held in Bermuda in May 2007. After joining the Egmont Group, JAFIC has sent its members to both the annual meetings and working groups to participate 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 JAFIO and accepted the role of sponsor FIU for Pakistan FIU at the request of the Egmont Group in 2011.

## Section2 Progress of the International Cooperation in 2011

## Paragraph1 Participation in the Activities of International Organizations

Table 5-1 presents that JAFIC has been actively participating in the activities of international organizations by sending its members to each occasion.
Table 5-1 Participation in the activities of international organizations in 2011

Month	Name of meeting	Location
FATF	February	Plenary Meeting	Paris (France)
Late March - Early April	Working Group	Cape Town (South Africa)
May	Working Group	Paris (France)
June	Plenary Meeting	Mexico City (Mexico)
September	Working Group	Rome (Italy)
October	Plenary Meeting	Paris (France)
December	Working Group	Busan (S. Korea)
APG	July	Annual Meeting	Cochin (India)
December	Typology Meeting	Busan (S. Korea)
Egmont Group	March	Working Group	Oranjestad (Aruba)
July	Annual Meeting	Yerevan (Armenia)

## Paragraph2 Status of Information Exchange with Foreign FlUs

## 1 Establishment of the Framework for Exchange of Information

It is necessary to exchange information on suspicious transactions with foreign FlUs timely in order to detect money laundering and terrorist financing by appropriately tracing criminal proceeds or terrorist financing transferred across borders.

On the other hand, Article 12 of the Act on Prevention of Transfer of Criminal Proceeds stipulates that JAFIC may disseminate information on suspicious transactions to foreign FIUs on condition that there is a framework governing the restrictions on the use of the disseminated information in foreign countries.

In response, JAfic has established the necessary framework by exchanging a document specifying the restrictions on the use of provided information and other matters with foreign FIUs. This document is called the Memorandum of Understanding (MOU).

JAFIC has been coping with the negotiations for setting the frameworks for information exchange with numerous foreign FIUs in order to constructively exchange necessary information with them.

From its establishment of April 2007 till the end of 2010, JAFIC has set the frameworks for information exchange with the FIUs of 26 jurisdictions. Moreover, in 2011, JAFIC has newly established frameworks with 8 FIUs (see Table 5-2).

Table 5-2 [34 jurisdictions which has set the Frameworks for Information Exchange between FIUs, which Japan]

Year of Agreement	Jurisdictions
2007	Hong Kong, Thailand, Malaysia, Belgium, Australia, U.S., Singapore, Canada, Indonesia, U.K., Brazil, Philippine
2008	Switzerland, Italy, Portugal, South Korea, Romania
2009	Paraguay, France, Qatar
2010	Turkey, Mexico, Luxembourg, Chile, Finland, India
2011	Nigeria, China, Cambodia, Macau, Cyprus, Argentina, Spain, San Marino
## 2 Status of Information Exchange with Foreign FlUs

JAFIC exchanges suspicious transaction information with foreign FIUs in a positive and expeditious manner.

JAfic has been strengthening the systems of analysis and as a result, requests to foreign FIUs have increased.

In 2011 regarding strange or unreasonable money transfers to and from foreign countries, which analyses on information of suspicious transaction have revealed, JAFIC, for further analysis, made 136 requests to relevant foreign FIUs for information such as the flow of funds transferred out of Japan, the source of remittance from abroad etc.

Table 5-3 The number of requests for information between JAFIC and foreign FIUs

Year	2007	2008	2009	2010	2011
Category
Number of requests for information from foreign FIUs to JAFIC (foreign country $ \Rightarrow $ Japan)	33	60	47	54	63
Number of requests for information from JAFIC to foreign FIUs (Japan $ \Rightarrow $ foreign country)	16	30	51	78	136

Note: The number of requests for 2007 is data after April 1.

In addition to these requests for information, FIUs in various countries are voluntarily exchanging information which are considered beneficial in preventing money laundering and terrorist financing in other countries.

The number of cases where JAFIC exchanged information with foreign FIUs in 2011 totaled 226, an increase of 74 cases (48.7%) from the previous year, which was the largest since the enforcement of the Act on Prevention of Transfer of Criminal Proceeds in 2007.

Table 5-4 The number of cases where JAFIC exchanged information on criminal proceeds with foreign FIUs

Year	2007	2008	2009	2010	2011
Provision of information from foreign FIUs (foreign country $ \Rightarrow $ Japan)	22	63	70	89	146
Provision of information at the request of JAFIC	12	21	52	66	128
Voluntarily provision of information	10	42	18	23	18
Provision of information to foreign FIUs (Japan $ \Rightarrow $ foreign country)	33	61	50	63	80
Provision of information at the request of foreign FIUs	33	58	44	56	64
Voluntarily provision of information	0	3	6	7	16
Total	55	124	120	152	226

Note 1: Information on criminal proceeds includes STRs and other related information such as publicly etc. Note 2: The number of requests for 2007 is data after April 1.
In order to facilitate exchange of information, JAFIC has actively carried out various activities such as learning how foreign FIUs analyze information and how foreign investigative authorities utilize the funds information etc. JAFIC has also conducted meaningful discussions, for the activation of future exchange of information by visiting FIUs of jurisdictions where there is a need for close coordination especially from the viewpoint of countermeasures against money laundering and terrorism financing, as well as FIUs of other jurisdictions where there still is no framework for information exchange.

## 3 Discussions with Foreign FlUs

The following presents the discussions held with foreign FlUs in 2011:

March Discussion with China FlU (Beijing)

April Information exchange with U.S. FIU (Washington D.C.)

June Information exchange with Malaysia FIU (Kuala Lumpur)

Information exchange with Indonesia FIU (Jakarta)

Information exchange with Hong Kong FIU (Hong Kong)

September Information exchange with Italy FIU (Rome)

Information exchange with U.S. FIU (Tokyo)

Discussion with Colombia FlU (Bogotá)

October Discussion with Peru FIU (Lima)

November Information exchange with South Korea FIU (Seoul)

Discussion with New Zealand FIU (Wellington)

## Note: locations of the meetings are in parentheses ()

Information Exchange with Canada FIU

Discussion with New Zealand FIU

## Paragraph 3 FATF Mutual Evaluation of Japan

## 1 Implementation of the Third FATF Mutual Evaluation of Japan

The FATF Mutual Evaluation of Japan was conducted three times; and the third round, the most recent one, was conducted from late 2007 to late 2008 with JAFIC and related government agencies responding. The main process and procedure of the FATF Mutual Evaluation of assessed countries are as follows:

1. response to the Mutual Evaluation Questionnaire (MEQ),

2. On-site visit to directly confirm the actual status by assessors,

3. discussion at the FATF Plenary Meeting.
Table 5-5 Results of the Third FATF Mutual Evaluation of Japan

Recommendation	Outline of Recommendation	Rating	Recommendation	Outline of Recommendation	Rating
1	Money laundering offence	LC	25	Guideline & feedback	LC
2	Money laundering offence - mental element and corporate liability	LC	26	FIU	LC
3	Confiscation and provisional measures	LC	27	Investigation for money laundering and terrorist financing	LC
4	Secrecy laws consistent with the Recommendations	C	28	Power of competent authorities	C
5	Customer due diligence (financial institutions)	NC	29	Supervisory authorities	LC
6	Individuals who are or have been entrusted with prominent public function in a foreign country	NC	30	Resources, integrity and training	LC
31	National cooperation	LC
7	Correspondent banking	NC	32	Statistics	LC
8	Misuse of new technologies & non face-to-face business	PC	33	Legal person-beneficial owners	NC
9	Rely on third parties and introducers for Customer due diligence	N/A	34	Legal arrangements (trust) - beneficial owners	NC
10	Obligation to maintain records of customer identification and transaction record	LC	35	Convention	PC
11	Obligation to pay special attention for unusual transaction	PC	36	Mutual legal assistance	PC
12	Customer due diligence by DNFBP (designated non-financial businesses and professions)	NC	37	Dual criminality	PC
13	Suspicious Transaction Report by financial institutions	LC	38	Mutual legal assistance on confiscation and freezing	LC
14	Obligation to protect reporter	LC	39	Extradition	PC
15	Obligation to maintain internal controls	NC	40	International cooperation (information exchange with foreign counterparts)	LC
16	Suspicious Transaction Report by DNFBP	PC	I	Implement United Nation instruments	PC
17	Sanction for non-compliance	LC	II	Criminalise terrorist financing	PC
18	Shell bank (bank incorporated in a jurisdiction in which it has no physical presence)	PC	III	Freeze and confiscate terrorist assets	PC
19	Other forms of reporting	C	IV	Suspicious transaction reporting related to terrorism	LC
20	Other DNFBP & secure transaction technique	C	V	International cooperation for terrorism	PC
21	Special attention for higher risk countries	NC	VI	Money/value transfer services	PC
22	Foreign branches & subsidiaries	NC	VII	Wire transfer rules	LC
23	Supervisory obligation for financial institutions	LC	VIII	Non profit organization	PC
24	Supervisory obligation for DNFBP	PC	IX	Cross border declaration & disclosure (Cash courier)	NC
# Trends in Offences Related to Money Laundering in 2011

In order to take effective AML measures, it is essential to understand the scale and modus operandi of money laundering. Accordingly, Section 1 of this Chapter reviews the arrests made for illegal trade of savings passbooks allegedly used as tools for money laundering and Section 2 describes the current state based on the cleared cases of money laundering.

As explained in Chapter 2, money laundering defined in Japan consists of control of management of enterprises of legal persons and other entities through illicit proceeds (Article 9), concealment of criminal proceeds etc. (Article 10) and receipt of criminal proceeds etc. (Article 11) each stipulated in the Act on Punishment of Organized Crimes, and also concealment of drug-related criminal proceeds etc. (Article 6) and receipt of drug-related criminal proceeds etc. (Article 7) each stipulated in the Anti-Drug Special Provisions Law. They include typical money laundering activities such as transferring criminal proceeds to a certain place so that these proceeds would not be traceable and depositing criminal proceeds in a bank account under the name of another person, although all the activities to transfer criminal proceeds are not yet covered.

The AML achievement in Japan could be grasped to some extent by looking into the number of cleared cases of money laundering. The amounts of confiscation of criminal proceeds following the cleared cases could also reflect the effectiveness of the AML measures. Sections 3 and 4 of this Chapter consequently describe the situation of confiscation of criminal proceeds.

### Section 1 Arrests made for the violation of the Act on Prevention of Transfer of Criminal Proceeds (illicit transfer of savings passbooks etc.)

As described in Section 2, deposit or savings passbooks in a name other than the user are misused in a number of money laundering offences. Article 26 of the Act stipulates penalties on the trade of savings passbooks, and the police is enhancing its effort to crack down on such practices. The number of arrests for the violation of this law made in 2011 was 1,261, an increase of 496 (64.8%) from the previous year and the largest number since the enforcement of the Act in 2007.