Silviase/jgov_v1.4_full_ann huggingface dataset:
crime in cooperation with prefecture police, etc. in order to use for the JAFIC to sort and analyze information regarding STRs, as information provision to the specified business operators that is regulated in the Act on Prevention of Transfer of Criminal Proceeds, Article 3.

## 5 Flow of Suspicious Transactions Reporting

Information reported by specified business operators are collected at National Public Safety Commission / National Police Agency (JAFIC), via the competent administrative authorities. JAFIC sorts, analyzes and selects STRs, and then disseminates these STRs to investigative authorities such as the Prefectural Police, the Public Prosecutor's Office, etc.

The investigative authority receives and uses STRs as clues for criminal investigation, detection of criminal proceeds, and tracing the source of illicit funds, etc. Moreover, JAFIC provides foreign FLUs with information, etc. of overseas transactions as needed, in order to trace criminal proceeds transferred across international borders.

Furthermore at JAFIC, a detailed analysis of STRs is carried out using the information gathered by the police for organized crime countermeasures, etc. and the result of analysis are disseminated to related Prefectural Police.

Figure 4-1 Flow of STRs from Specified Business Operators, through JAFIC to Investigative Authorities

## 6 Information Security Measures

Since STRs include sensitive information on individuals and business activities, JAFIC carries out due information security measures to prevent leakage, loss, damage, or other misconduct. The handling of relevant information is set forth in the regulations of the National Public Safety Commission.

In particular, since a large amount of information is stored in the database system which manages suspicious transactions, sufficient security measures are required. Various security measures taken by JAFIC are as follows.

## (1) Management of Entering and Exiting

Terminals that can access information stored in JAfic database are located in a room with a door that is controlled by a biometric authentication system. Only a limited number of staff members are permitted to enter the room.

## (2) Three steps of Authentication

In order to access the information in JAFIC database, three levels of authentication are required. In other words, the information can be reached only after authentication is done 3 times, in 3 different ways. In the authentication procedure, if more than one mistake occurs, access from the terminal is prohibited, and in this way use without permission is securely prevented.
(3) Surveillance of Terminal

All processing operated at the terminal, such as file inquiries and printing, is monitored and recorded by surveillance software. This allows for tracing survey in case of illegal operation, as well as restraining illegal operation within the organization.

(4) Physical Measures of Terminal

Each terminal is firmly affixed to a desk with a security wire, to prevent theft. Chapter 4 Reports of Suspicious Transactions.

(5) Strengthening of Server Management

The server that contains reporting information is located in a server room with adequate security measures, and only qualified staffs are allowed to enter.

(6) Encryption of Terminal's Hard Disk Drive Information

The hard disk drives on the terminals that are used to access the database system are all encrypted. Therefore, if the hard disk drives are removed and taken out, the information recorded in the hard disk drive and all related programs will still be inaccessible.

(7) Encryption of Circuit

Transmission between the server and terminals is encrypted with a special circuit.

## Section2 Situation of Suspicious Transaction Reports

## 1 The change in the number of reported cases

As described in Chapter 1, although the system of suspicious transaction reports was established by the enforcement of the Anti-Drug Special Provisions Law in 1992, less than 20 cases were reported each year between 1992 and 1998, largely because the subjects of reporting was limited to proceeds derived from drug-related crimes. Under these conditions, that reporting system could not be considered to be fully functional. However, since the enactment of the Act on the Punishment of Organized Crime in 1999 (enforced in February 2000), crimes subjected in suspicious transaction reports was expanded from drug-related crimes to serious crimes, and the number of reports exceeded 1,000 cases in 1999. Since the enforcement of the Act on the Punishment of Organized Crime in the year 2000, the number of reports has increased each year, and has rapidly increased since the enforcement of the Act on Prevention of Transfer of Criminal Proceeds. The number of reports in 2009 was 272,325, an increase of 37,065 cases (15.8%), about 37.6 times increase compared to 2000.

Table 4-1 Trend Diagram of Number of Reports of Suspicious Transactions (1992-1999)

1992	1993	1994	1995	1996	1997	1998	1999
Yearly number of Reports Received	12	17	6	4	5	9	13	1,059

Note: The notifications of 1992 are those made after July, the month the notification system was established.
Figure 4-2 Trend Diagram of Number of Reports of Suspicious Transactions (2000-2009)

Number of Reports Received	7,242	12,372	18,768	43,768	95,315	98,935	113,860	158,041	235,260	272,325
Number of Reports Offered	5,329	6,752	12,417	30,090	64,675	66,812	71,241	98,629	146,330	189,749

Note 1: Annual reports are the reports received by the Financial Services Agency between February 2000 and March 2007 and by the National Public Safety Commission and the National Police Agency after April 2007. And received cases in 2007 are the total received reports of Financial Services Agency, National Public Safety Commission and the National Police Agency.

Note 2: Annual provided reports are those disseminated by the Financial Services Agency to the National Police Agency between February 2000 and March 2007 and by the National Public Safety Commission / National Police Agency(JAFIC) to investigation agencies, etc. after April 2007. The provided number in 2007 is the total provided cases by Financial Services Agency and National Public Safety Commission / National Police Agency (JAFIC).

The circumstances regarding the increase in reporting numbers can be thought to be

☐ The monitoring system for illegal funds has been reinforced by financial institutions, along with an overall improvement of compliance awareness in society.

The implementation of client management measures based on the Risk Base Approach have gradually conducted.

☐ The notification system of suspicious transaction to new business operators such as credit card business, etc. has expanded.

Moreover, financial institutions, etc. have taken various measures, both tangibly and intangibly. In particular, some financial institutions, whose STRs have been increased, have promoted training on countermeasures against money laundering using resources, such as handbooks for employees, and have improved the ability of individual employees, as well as strengthening the system to identify suspicious transactions, by increasing personnel in charge of money laundering countermeasures and the introduction of the detection systems for suspicious transactions.
## 2 Number of Reports by Business Types

The number of suspicious transaction reports that each category of businesses filed in 2009 is shown in table 4-2. Banks have the highest number of reports with 252,415 cases, or 92.7% of all reports, followed by Shinkin bank and Credit cooperative (10,941 cases, 4.0%), and financial instrument business operators (3,828 cases, 1.4%).

It accounted for just a fraction of the reported STRs, but new business operators of credit companies showed the highest increase in the number of reports in 2009, with an increase of 313.7% compared to the previous year.

Moreover, notification cases by new business operators were 1,697 cases, a large increase of +229.5% compared to the previous year.

Table 4-2 Number of Suspicious Transaction Reports by Business Types

Business Type	2008	2009	Increase/Decrease rate
Number of reports	%	Number of reports	%	Number of reports	%
Bank	216,016	91.8%	252,415	92.7%	36,399	16.9%
Japan Post	722	0.3%	1,163	0.4%	441	61.1%
Shinkin bank and Credit Cooperatives	13,218	5.6%	10,941	4.0%	-2,277	-17.2%
Financial Instruments Business	3,321	1.4%	3,828	1.4%	507	15.3%
Money Lending Business	509	0.2%	1,148	0.4%	639	125.5%
Norinchukin Bank, etc.	420	0.2%	281	0.1%	-139	-33.1%
Labour Bank	234	0.1%	161	0.1%	-73	-31.2%
Insurance Company	113	0.0%	183	0.1%	70	61.9%
Other	192	0.1%	508	0.2%	316	164.6%
new business operators	Financial Leasing	64	0.0%	60	0.0%	-4	-6.3%
Credit Card	365	0.2%	1,510	0.6%	1,145	313.7%
Real Estate Transactions	21	0.0%	33	0.0%	12	57.1%
Dealers in Precious Metals and Stones	8	0.0%	0	0.0%	-8	-100.0%
Postal Receiving Service	57	0.0%	92	0.0%	35	61.4%
Telephone Receiving Services	0	0.0%	2	0.0%	2	-
Total	235,260	100.0%	272,325	100.0%	37,065	15.8%

## 3 Number of notification cases classified by notification methods

According to notifications of suspicious transaction by notification method, notification by electronic application using the e-governance on-line (e-Gov) window, and notification other than notification by electronic application (sending documents, etc. to the supervising administrative government agency) are described in Table 4-3.
Table 4-3 Number of Notification Cases by Notification Methods

Notification Methods	2008	2009	Increase/Decrease rate
Number of reports	%	Number of reports	%	Number of reports	%
Electronic Application	111,921	47.6%	156,291	57.4%	44,370	39.6%
Other Methods	123,339	52.4%	116,034	42.6%	-7,305	-5.9%
Total	235,260	100%	272,325	100%	37,065	15.8%

Notification rate by electronic application increased 9.8 points from 47.6% in 2008 and 57.4% in 2009. This is assumed to due to efforts to publicize notification by electric application, in order to reduce the load of the notifying person through workshops targeting specified business operators.

## Section3 Use of Suspicious Transaction Reports

## Paragraph1 Dissemination to Investigative Authorities

JAFIC provides investigative authorities with STRs reported by specified business operators that have been judged to be conducive to the investigation of money laundering or predicate offences. Investigative authorities are Prefectural Police, Public Prosecutors Office, Narcotics Control Department, Japan Coast Guard, and Customs and Securities and Exchange Surveillance Commission.

In 2009, 189,749 reports were disseminated to investigative authorities, an increase of 43,419 cases (29.7%) compared to the previous year (See figure 4-2). In addition, there were no requests to send copies of records of the information regarding suspicious transaction from investigative authorities.

The number of disseminated reports in 2009 was 69.7% of all the STRs and this percentage is an increase of 7.5 points compared to the previous year. The disseminated information is used by investigative authorities to assist investigations concerning money laundering and predicate offences and for anti-organized crime measures including deprivation of criminal proceeds.

## Paragraph2 Outlook of How STRs are Used

The number of cases cleared by prefectural police that were initiated with information regarding STRs (hereinafter referred as “initiated cases”) was 337 cases in 2009, and this is the highest number since the Organized Crimes Punishment Law has been enforced. The number of cleared cases of money laundering within the initiated cases was 9 cases in 2009.

Table 4-4 shows the numbers categorized by the details, and fraud has the largest number making up 78.6%.
Table 4-4 Number of Cases Cleared that Started with Suspicious Transaction Reports

Year Crime	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	Total
Fraud	2	3	2	4	6	14	34	81	132	265	543
Violations of the Act on Prevention of Transfer of Criminal Proceeds	6	15	48	69
Violation of Money-Lending Business Law and Law Concerning Receiving of Capital	1	3	3	1	2	3	12	9	34
Violation of Immigration Control and Refugee Recognition Act	2	5	1	2	12	1	3	4	30
Violation of Financial Instruments and Exchange Law	2	1	2	5
Embezzlement	2	2
Forgery of documents	2	1	2	1	2	2	1	11
Drug offenses	1	2	1	4
Gambling	1	1	2
Other	1	5	5	4	2	2	3	9	6	37
Total	3	14	16	12	13	18	50	99	175	337	737

Note 1: This is the number held by National Police Agency

Note 2: Violations of the Act on Prevention of Transfer of Criminal Proceeds include violation of the Customer Identification Act, and violation of the Financial Instruments and Exchange Act include violations of the Securities and Exchange Law

Note 3: Drug-related crimes are in violation of each the Special Drug Act, Stimulants Control Act, Cannabis Control Law, Narcotics and Psychotropics Control Act and Opium Act.

Table 4-5 The Number of Cleared Cases of Money Laundering from the Initiated Cases

Year Crime	2007	2008	2009
Fraud	6	2	4
Violation of Money-Lending Business Law and Law Concerning Receiving of Capital	1	6	4
Other	2	1	1
Total	9	9	9
# Promotion of International Cooperation

Section1 Need for International Cooperation on AML/CFT Measures

Economy and financial services are widely globalized today, and money transfers can be made instantly across borders. There are a number of cases in which crime and terrorist organizations attempt to evade law enforcement authorities' investigations by transferring criminal proceeds to foreign countries, and terrorist funds through third-party nations.

Non-cooperative jurisdictions, or those taking insufficient AML/CFT measures are likely to be misused as an escape route for money-laundering or terrorist financing.

It is in this context that no jurisdiction can be outside the global network to tackle money laundering and terrorist financing. Every jurisdiction needs to closely cooperate with others in making and implementing measures against this, so relevant authorities can trace and detect illicit proceeds and prevent criminal organizations from abusing international financial system for illicit purposes.

Therefore, measures against money laundering and terrorist financing have been taken by various international organizations including FATF (Financial Action Task Force).

From the inception of the Japan Financial Intelligence Office (JAFIO), Japan's FIU had actively participated in the discussion at FATF and other international institutions.

JAFIC (Japan Financial Intelligence Center), Japan's new FIU, established in April 2007, is required not only to take over the achievements of JAFIO, but also to seek to collaborate even more vigorously with other countries in promoting global implementations of effective AML/CFT measures.

## Section2 Activities of International Institutions and Japan's Participation

## Paragraph1 FATF

## 1 FATF

FATF (Financial Action Task Force) is an intergovernmental body established by the "Economic Declaration" of the 1989 Arche Summit Communiqué to promote international cooperation on AML measures. After the September 11 US terrorist attacks of 2001, FATF has also taken the initiative in the promotion of international CFT measures.

FATF has 33 member jurisdictions (including Japan) and 2 international organizations as of December 2009.
## 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 Flu, The Japan Financial Intelligence Office (JAFIO) which had been established within the Financial Services Agency, have participated in tri-annual plenary meetings and working groups which conducts analysis of money laundering typologies. Even after the functions of Flu were transferred from JAFIO to JAFIC, JAFIC has continued to actively participate in the discussion for new frameworks of AML/CTF measures. In 2009, it sent several staff members to plenary meetings held three times an year and 2 members to projects of working group on money laundering typologies.

Moreover, JAfic sent its staff member as an assessor to the on-site visit for the Mutual Evaluation of New Zealand in April 2009.

## Paragraph2 APG

## 1 APG

APG (Asia/Pacific Group on Money Laundering) is an international cooperative body established 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 end of December 2009, the APG consists of 40 jurisdictions, including Japan.

## 2 Activities of APG

The main activities of APG are as follows.

1. Promotion of compliance with 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 APG, much as it has with FATF. For example, the first and second typologies meetings in March 1998 and March 1999 were held in Tokyo and Japan took the role of co-chair with Australia between July 2004 and June 2006.

This approach has not changed even after the function of FIU was transferred to JAFIC, and JAFIC has sent its staff members to the annual meetings and the typology meetings since its establishment. In July 2009, the delegates participated in the annual meeting held in Australia and to discuss the Mutual Evaluations of Japan, Philippine, Vietnam, Pakistan, Korea and other jurisdictions.

Furthermore, some stuff members were also sent from JAFIC to the typologies meeting held in Cambodia in October 2009 to participate in the study on the best practice of information analysis at FIUs and on the latest modus operandi and trend of money laundering, and provided information such as presenting the results of analysis of recent cases on methods of an illegal transfer of money related to human trafficking using underground banks.

APG typologies meeting (Cambodia)
## 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, such as information exchange and training, between FIUs around the world engaging in AML measures. The group is named after the Egmont castle where the first plenary session was held. Although the Egmont Group was established as an informal forum at 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 116 jurisdictions as end of December 2009.

## 2 The Main Plenary Meeting of the Egmont Group

In addition to the annual plenary meeting in which representatives from all members of FIU attend, the Egmont Group has the following working groups, which hold meetings about three times a year respectively.

1. The Legal Working Group (LWG), which reviews the candidacy of potential members and handles all legal aspects and matters of principle within Egmont Group, including cooperation between FIUs

2. The Training Working Group (TWG), which identifies training needs and opportunities for FIU personnel, and conducts training seminars for Egmont members as well as for non-Egmont jurisdictions

3. 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

4. The Operational Working Group (OpWG), which seeks to bring FIUs together on typologies development and long-term strategic analytical projects

5. The IT Working Group (ITWG), which provides advice and technical assistance to new and existing FIUs to develop, enhance, or redesign their IT systems, and examines new software applications that might facilitate analytical work

## 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 actively participated in the activities of the Egmont Group. It sent staff members to working group meetings and the annual plenary meeting,

and took part in the construction 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 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's FIU at the 15th Annual Plenary Meeting held in Bermuda in May 2007. In 2009, its staff members were sent to a working group meetings in

Egmont Group Meeting (Malaysia)
Guatemala in March, the annual meeting held in Qatar in May and a working group meetings in Malaysia in October. They participated in the discussions on the principles related to the exchange of information between FIUs, etc.

Moreover, JAFIC has took over the role of sponsor FIU in the application procedures for the FIU of Myanmar into the Egmont Group, from the JAFIO. In 2008, JAFIC also became a sponsor FIU for the FIU of Mongolia. Staff members of JAFIC with other delegates carried out on-site visit in Mongolia at the end of the year and membership of Egmont Group for Mongolia FIU was approved as a result of discussions at the working group meeting in March and the annual meeting in May 2009.

## Section3 Information Exchange with Foreign FlUs

## Paragraph1 Establishment of the Framework for Exchange of Information

It will not be successful without the timely exchange of information on suspicious transactions with FlUs of other countries, to detect money laundering and terrorist financing by appropriately tracing criminal proceeds or terrorist financing across borders.

On the other hand, according to the 2nd paragraph of Article 12 of the Act on Prevention of Transfer of Criminal Proceeds, JAFIC may disseminate information on suspicious transactions to foreign FIUs on condition that there is a framework governing how the foreign FIUs should use the disseminated information.

MOU agreement with Qatar FIU

The framework as above mentioned is called MOU (Memorandum of Understanding) in the field of the international exchange for FIUs such as Egmont Group. 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 2008, JAFIC set the frameworks of exchanging information with the FIUs of 17 jurisdictions. Moreover, in 2009, JAFIC has newly established frameworks with 3 countries (Paraguay, France, and Qatar).

## 20 Jurisdictions which has set the framework of Information Exchange between FIUs, with JAFIC (in order of setting)

Hong Kong, Thailand, Malaysia, Belgium, Australia, U.S., Singapore, Canada, Indonesia, U.K., Brazil, Philippine (2007), Switzerland, Italy, Portugal, South Korea, Rumania (2008), Paraguay, France, and Qatar (2009).

## Paragraph2 Status of Information Exchange with Foreign FIUs

JAFIC exchanges suspicious transaction information with foreign FIUs positively and quickly.

The status of the information exchange with foreign FIUs as of the end of December 2009 is shown in Fig. 5-1.

The number of requests for information to foreign FIUs, in particular, have been increasing, accompanying the improvement of the STR analysis system.