1992 as one of the domestic laws implementing "the UN New Narcotics Convention", aiming mainly at dealing with drug crime proceeds. This law criminalized money laundering activities connected with drug crimes for the first time in Japan and established the suspicious transaction reporting system (regarding drug crime proceeds) by financial institutions, etc. in response to "the FATF 40 Recommendations."

## 2 | Enforcement of the Organized Crimes Punishment Law

The FATF mutual evaluation of Japan 1994 voiced a negative view on the limit of predicate offences of money laundering to illegal drug crimes. It was difficult for financial institutions, etc. to determine if each transaction was actually related to drug crimes in reporting suspicious transaction reports, resulting in the fact that the suspicious transaction reporting system did not work effectively. For improvement of these disadvantages, "the Act on Punishment of Organized Crimes, Control of Crime Proceeds and Other Matters" (hereinafter, "the Organized Crimes Punishment Law") was adopted (enforced in Feb. 2000) in Japan based on the FATF recommendations as revised in June 1996. This law represented progress in regulations against criminal proceeds in several points. The scope of predicate offences for money laundering and suspicious transaction reports was expanded from illegal drug crimes to include other serious crimes. In addition, the law designated the Financial Supervisory Agency (later, the Financial Services Agency) as the FIU of Japan, where money laundering information should be centralized, arranged and analyzed to be disseminated to investigative authorities.

## 3 | Enforcement of "the Act on Punishment of Financing Offences of Public Intimidation" and "the Law on Customer Identification by Financial Institutions",

and the Revision of "the Organized Crimes Punishment Law"

As a major development after the terrorist attacks in US, "the Act on Punishment of Financing Offences of Public Intimidation" was adopted (enforced in July 2002) as a domestic law to implement "the International Convention for the Suppression of the Financing of Terrorism". Also, to implement the customer identification regime required under the said Convention and the FATF recommendations, "the Law on Customer Identification by Financial Institutions" was adopted (enforced in Jan. 2003).

At the same time as the adoption of "the Act on Punishment of Financing Offences of Public Intimidation", "the Organized Crimes Punishment Law" was partly revised, so that the terrorist financing offence was included into predicate offences. Moreover, terrorist funds were stipulated as criminal proceeds, and the scope of suspicious transaction reports was extended to terrorist funds by the revised law.

## 4 | Enforcement of "the Act on Prevention of Transfer of Criminal Proceeds"

Based on the fact that the FATF re-revised "the 40 Recommendations" in 2003 to extend the scope of business operators required to implement customer identification etc. to operators other than financial institutions, "the Headquarters for Promotion of Measures Against Transnational Organized Crime and International Terrorism", with the Chief Cabinet Secretary as head thereof, publicized "the Action Plan for Prevention of Terrorism" including the implementation of the re-revised Recommendations in December 2004. In November 2005, "the