## Section 1 Outline of the Anti-Drug Special Provisions Law and The Act on Punishment of Organized Crimes

## 1 Anti-Drug Special Provisions Law

As described in Chapter 1, the Anti-Drug Special Provisions Law was enacted for the purpose of blocking cycles of illegal proceeds derived from drug crimes, directly triggered by the UN New Narcotics Convention adopted in 1988 and the FATF "40 Recommendations" issued in 1990, and enforced on July 1, 1992. This law contains two items with regard to measures against drug crime proceeds as below.

The Anti-Drug Special Provisions Law included, at the time of enactment, provisions on reports of suspicious transactions, which have been taken over by the Act on Punishment of Organized Crimes, then by the Act on Prevention of Transfer of Criminal Proceeds.

## (1) Punishment of money laundering

The Anti-Drug Special Provisions Law defines the act of money laundering as a new crime in that it has such aspects as encouraging further (drug) crimes.

a. Concealment of drug crime proceeds etc. (Article 6)

The following acts are criminalized by this article: (i) Act of "disguising facts with respect to acquisition or disposition of drug crime proceeds etc." (ii) Act of "concealing drug crime proceeds etc." and (iii) Act of "disguising facts with respect to the source of drug crime proceeds etc."

Examples of the act (i), "Act of disguising facts with respect to acquisition" is the act of depositing drug crime proceeds etc. under the name of another person, the act of manipulating the books by pretending profits were gained by legitimate business activities, or the like.

An example of the act (i), "Act of disguising facts with respect to disposition" is the act of purchasing goods under the name of another person, using drug crime proceeds etc. or the like. Examples of the act (ii), "concealing" is actions such as physically concealing and sending money to a country or region where it is considerably difficult to trace the funds, or the like.

An example of the act (iii), "Act of disguising facts with respect to the source" is the drug purchaser's act of pretending the payment for purchase is a repayment of a fictitious debt.

b. Crime of receipt of drug crime proceeds etc. (Article 7)

The act of "knowingly receiving drug crime proceeds etc." is criminalized by this article.

An act in which a main member of Boryokudan group receives money as part of a protection racket, knowing that the money has been obtained from drug crime, is an example of this case.

(2) Confiscation, collection of equivalent value and securance measures (Article 11 through 13, 19, 20)

Drug crime proceeds shall be confiscated. If it cannot be confiscated because, for example, it has already been consumed or the right thereof has been transferred, collection of equivalent value will be ordered. The system of confiscation and collection of equivalent value provided in Anti-Drug Special Provisions Law has been strengthened compared to the existing system of confiscation and collection of equivalent value in the Penal Code in that the target is not limited to tangible property, but is extended to deposit claims etc. and that confiscation and collection of equivalent value are compulsory. Moreover, it can be prohibited by court order to dispose of drug crime proceeds which should be confiscated prior to court decision in order to ensure the confiscation of the proceeds. As the risk of disposal by a criminal will be raised if he/she knows of the commencement of investigation, the court can issue a securance order even before the prosecution upon request of a police officer etc. with a fixed period of 30 days, which could be renewable.