## Section 1 Recent Law Amendments

The Act on Prevention of Transfer of Criminal Proceeds and its sub-regulations, has been amended as needed, in order to respond to changes in social conditions and the amendment of other laws, from the viewpoint of preventing money laundering crime, etc. In 2009, the following two amendments were carried out as countermeasures mainly for the prevention of Furikome fraud, the predicate offences of money laundering.

## 1 Strengthening of Regulations on Postal receiving service providers

To greatly reduce damage due to Furikome fraud, the police has worked towards building a social environment building that aims for the elimination of Furikome fraud, such as carrying out the public announcement activity in coordination with related agencies and organizations, as well as promoting regulatory activities. As a result, in October 2008, the total financial damage of 1,570,580,000 yen in the 1,330 confirmed cases it was a 36.5% decrease in number of cases confirmed, and 46% decrease in financial damage, in comparison with a peak monthly average from March to June 2008. However, crimes using the modus operandi of using companies providing a service of receiving postal items (so-called private P.O box companies) through postal mail or delivery services for illegally acquired cash, etc. increased.

By using companies providing service of receiving postal items, postal items can be received without revealing where the client actually is, such as a private address. The providing a service of receiving postal items has the actual circumstances used as a destination of swindled money and deposit and saving banknote of another person name, etc. As such, Postal receiving service providers are subject to the regulations of the Act on Prevention of Transfer of Criminal Proceeds, are required to verify identification of customer when concluding a contract for receiving services for postal items. However, before the Act was amended, the risk of misusing a service for receiving postal items other than cash and bankbooks was assumed to be low, so concluding contracts which contain an article prohibiting receiving of postal items including cash and bankbooks was exempted from being targeted for customer identification.

However, since it is not readily known whether a postal item includes cash, etc. unless visually inspected, refusing to deliver such an item is difficult, even if the contract contains an article which prohibits the receiving of postal items including cash, etc. Moreover, in reality, many companies providing a service for receiving postal items have been used for Furikome fraud, and did not verify the identification of customer, using the excuses that there is the contract article that prohibits the delivery of postal items including cash, etc. Hence, further investigation was difficult for the police.

Consequently, the Ordinance for Enforcement of the Act on Prevention of Transfer of Criminal Proceeds was revised in February 2008, and stipulated that identification of customer is to be verified, even though the contract includes an article which prohibits the receiving of postal items including cash, etc. (Enforced in May 2008)

## 2 Amendment of the Act on Prevention of Transfer of Criminal Proceeds according to the enactment of "the Payment Services Act"

In June 2008, "the Payment Services Act" was enacted. According to the enactment of the law, fund transfer companies may also carry out exchange transactions (scheduled for enforcement within 1 year of issue).

Since it is possible to use exchange transactions for money laundering and the financing of terrorism, the Act on the Prevention of Transfer of Criminal Proceeds has been amended, such as the addition of funds transfer companies as specified business operators, and their obligation to verify customers