identifications, and preparation and preservation of transaction records, etc., and suspicious transaction reporting.

Moreover, from the standpoint to prevent the transfer of criminal proceeds, activities such as receiving bankbooks, etc. with the intention of dealing with specified business operators while pretending to be another person has been punishable under the Act on Prevention of Transfer of Criminal Proceeds. Also, to exchange transactions carried out by fund transfer companies, the establishment of the same penal provision has been set for activities such as receiving ID and passwords needed to exchange transactions carried out by fund transfer companies, according to the enforcement of the Payment Services Act, since misuse and impersonation are expected.

## Section2 Outline of the Anti-Drug Special Provisions Law and Act on the Punishment of Organized Crime

## 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 to the Act on Prevention of Transfer of Criminal Proceeds through the Act on the Punishment of Organized Crime.

## (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.

For example, 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.

(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