Silviase/jgov_v1.4_full_ann huggingface dataset:
Fig. 3-2 Anti-money laundering measures in each governmental organization

Ensuring appropriate actions by specified business operators and promoting public understanding

Ministry of Finance

Ministry of Industry

Ministry of Agriculture, Forestry and Fisheries

Ministry of Health, Labour and Welfare

Ministry of Justice

National Public Safety Commission / National Police Agency (JAFIC) (Analysis and dissemination of STRs)

Specified Business Operators

Securities and Exchange Surveillance Commission

Headquarters for the Promotion of Measures against Transnational Organized Crime and Other Relative Issues and International Terrorism

Duties and Members

In order to prevent terrorism and assure the safety of national citizens, ensure close cooperation between related administrative organizations and promote comprehensively and actively effective and appropriate measures against increasing transnational organized crimes or the like and international terrorism about which national citizens are increasingly concerned

Chief of the Headquarters: Chief Cabinet Secretary

Deputy Chief of the Headquarters: Chairman of the National Public Safety Commission

Members: Deputy Chief Cabinet Secretary; Senior Vice Minister of Justice;

Senior Vice Minister for Foreign Affairs; Senior Vice Minister of Finance;

Senior Vice Minister of Health, Labour and Welfare; Senior Vice Minister of Economy,

Trade and Industry; Senior Vice Minister of Land, Infrastructure, Transport and Tourism

## Countermeasures against Criminal Proceeds by the Police

From the perspectives of confiscating the financial bases of criminal organizations, the police have been promoting countermeasures against criminal proceeds by, among others, cracking down on illegal acts and other fund acquiring activities undertaken by Boryokudan. The Act on Prevention of Transfer of Criminal Proceeds is expected to make these countermeasures more effective with the cooperation of a wide range of business operators who may deal with criminal proceeds. The National Police Agency, playing a central part in enforcing the law, issued "the Guideline for Promotion of the Criminal Proceeds Control" by the notice of the Deputy Commissioner General of the National Police Agency dated April 26, 2007. In order that the police departments in Japan collectively strengthen measures against criminal proceeds, the Guideline clarifies fundamental items and ideas of these measures.

Fundamental items in carrying out measures against criminal proceeds indicated by "the
Guideline for Promotion of the Criminal Proceeds Control" are composed of four principles and six promoting items as follows:

1. Principles for countermeasures against criminal proceeds

(1) Promotion of efforts by specified business operators and the understanding of national citizens

(2) Analysis and utilization of information on criminal proceeds

(3) Enhanced control of crimes relating to criminal proceeds and confiscation of criminal proceeds

(4) Promotion of international cooperation regarding countermeasures against criminal proceeds

### 2. Promoting items of countermeasures against criminal proceeds

(1) Establishing an enforcement mechanism

The National Police Agency and each prefectural police department should develop a system necessary for countermeasures against criminal proceeds. Each prefectural police department should strengthen its structure for relevant sections to discharge their respective duties and, most importantly, establish a Task Force specializing in investigation of money laundering.

(2) Promotion of efforts by specified business operators and the understanding of national citizens

The police should provide information on the transfer of criminal proceeds, instruction and advice to specified business operators and conduct public information and educational activities to deepen general understanding about AML/CFT measures.

(3) Collection, arrangement and analysis of information on criminal proceeds

The National Police Agency should collect, arrange, analyze and disseminate information on criminal proceeds. Each prefectural police department should collect information necessary for effective countermeasures against criminal proceeds. Relevant sections in a police department should maintain close cooperation with one another.

(4) Promotion of countermeasures against criminal proceeds

The National Police Agency should provide instruction to and coordinate among prefectural police departments which investigate crimes related to criminal proceeds, as well as clarify actual conditions of criminal organizations etc. Each prefectural police department should utilize STRs, apply the Organized Crimes Punishment Law, the Anti-Drug Special Law and other laws, while also promoting information collection activities.

(5) Promotion of confiscating criminal proceeds

The police should make use of every opportunity to take measures for confiscating criminal proceeds by, for example, requesting pre-indictment confiscation securance orders and closely cooperating with the Public Prosecutors Office.

(6) Promotion of international cooperation

The police should strengthen international cooperation by, for example, exchanging information with foreign FIUs, responding to revisions of international recommendations, and supporting foreign countries in implementing international recommendations.

The police have already been putting into practice actively, as described in Chapter 6, the poli-
cies indicated by "the Guideline for Promotion of the Criminal Proceeds Control" through various criminal investigations.

Fig. 3-3 Overview of the promotion outline of measures against criminal proceeds

## Promotion measures against criminal proceeds

Responsibilities of the National Police Agency and prefectural police forces and flow of information

## National Police Agency

Support for and PR/enlightenment of voluntary efforts of specified business operators

Collection, arrangement and analysis of information on criminal proceeds

Promotion of international coordination and cooperation

Ensuring confidentiality and information security

Provision of information

and investigative instruction/coordination

Report of information necessary for promoting countermeasures against criminal proceeds

## Prefectural Police Forces

Establishment of Task Force specializing in investigation of money laundering

Development of investigative structure for crimes related to criminal proceeds

PR and enlightenment activities

Collection of information

for promoting countermeasures

against criminal proceeds

Utilizing STRs

for criminal investigation

Appropriate implementation of measures

to eliminate criminal proceeds

Ensuring confidentiality

and information security
Section5

# Cooperation with Business Operators and the Public

## Paragraph1 Public Relations Activities toward the Enforcement of the New Law

## 1 | Participation in Seminars Given by Related Ministries and Agencies

JAFIC cooperated with relevant ministries and agencies in issuing guidelines for STRs and giving seminars for specified business operators, especially those who would be newly obliged to

take preventive measures by the Act on Prevention of Transfer of Criminal Proceeds, so as to encourage understanding and cooperation toward the smooth enforcement of the law.

## Examples:

- Made explanation about the outline of the Act on Prevention of Transfer of Criminal Proceeds, reporting procedure of STRs, and so on at seminars for business operators conducted by the

Seminar for business operators

Ministry of Economy, Trade and Industry at each Bureau of Economy, Trade and Industry as well as seminars held by industry organizations since August 2007.

- Made explanation about the outline of the Act on Prevention of Transfer of Criminal Proceeds, reporting procedure of STRs and so on at seminars for business operators conducted by the Ministry of Internal Affairs and Communications on December 10, 2007.

## 2 | Public Service Announcement in Cooperation with Mass Media and

## PR Activities Using Posters/Leaflets

Upon the Act on Prevention of Transfer of Criminal Proceeds fully taking effect in March 2008, national citizens are more often than before required to produce their identifications. Prior to the enforcement of the said law, JAFIC called for necessary cooperation in customer identification through TV, radio and newspapers and disseminated background information of the law. In addition, JAFIC prepared posters and leaflets so that the targeted business operators, industry organizations, police offices etc. throughout the country can make the public aware of the required procedure.

犯罪收益移転防止法

平成20年3月1日施行

マネーローンダリング、テロ資金供与防止のため、

本人認識が必要となる事業者が広がります。
## 3 PR on Website

JAFIC has created a JAFIC page on the web-

site of the National Police Agency, where it

explains about its activities and the Act on

Prevention of Transfer of Criminal

Proceeds.

Website of the National Police Agency: http://www.npa.go.jp

Website of JAFIC

http://www.npa.go.jp/sosikihanzai/jafic/index.htm

## Paragraph2 Provision of Information on Criminal Proceeds to Business Operators

## 1 | Seminars for Financial Institutions

JAFIC gave, together with the Financial Services Agency, "Suspicious Transaction Reporting" seminars for financial institutions 23 times in total at 12 places in Tokyo and at Local Finance Bureaus or the like from October to November 2007, where it explained about actual cases of suspicious transaction reporting utilized by investigative authorities and points to keep in mind when filing the report and so on and answered the questions made by employees of financial institutions.
## 2 | Provision of Information on Terrorist and Related Persons

When, for example, the United Nations Security Council adopts a resolution on measures for preventing transfer of funds related to persons or organizations deemed to be involved in terrorism, JAFIC notifies financial institutions, etc. through related ministries and agencies of the listed parties and requests them to report transactions suspected of being related to targeted parties.

## Paragraph3 Efforts of Business Operators

## 1 | Efforts of the Banking Industry

The "Japanese Bankers Association" (hereinafter referred to as "JBA"), of which most of the banks active in Japan are members, established the "Working Committee on Money Laundering Issues" within JBA in 1990 and, since then, has been taking anti-money laundering measures, such as preparing and disseminating notices on items to keep in mind regarding the procedures of customer identification and suspicious transaction reporting, preparing and distributing seminar handbooks for its members, giving seminars for its members, and so on. Also, JBA prepares leaflets, posters or the like to be provided to customers regarding customer identification procedure, etc. In addition, JBA is promoting organizational measures on issues related to money laundering/terrorist financing inside and outside of Japan by following at all times the development of AML/CFT measures at FATF, exchanging and sharing information continuously with foreign bankers associations or the like, making responses to FATF mutual evaluations against Japan, and so forth. As an example of JBA playing a leading part in the efforts of the banking industry, it incorporated into its "Code of Conduct," established in November 2005, provisions on compliance including money laundering prevention and confrontation with antisocial forces, and has had its members put them into practice.

## 2 Efforts of the Securities Industry

The securities industry has made efforts to eliminate boryokudan from securities transactions and promote anti-money laundering measures. One of the main actors in these efforts has been the Japan Securities Dealers Association (JSDA), which resolved in 1991 to avoid transactions with boryokudan or the like and has strongly promoted customer identification for anti-money laundering. However, after the securities market, which had continued to remain sluggish following the bubble's collapse, took an upward trend, cases of funds being acquired by antisocial forces began to appear.

In these circumstances, JSDA as well as each stock exchange, together with related institutions including the Financial Services Agency and the National Police Agency, established the "Securities Safety Liaison Committee" in November 2006 to examine future measures. The Committee published on July 26, 2007 the "Elimination of Antisocial Forces from Securities Transactions and the Securities Market" as an interim report of the examination result, where it clarified that anti-money laundering measures such as prompt reporting of suspicious transactions should be further reinforced.
## 3 Efforts of the Real Estate Industry

The real estate industry established in December 2007, a cross-organizational liaison council named "Liaison Council for Preventing Transfer of Criminal Proceeds and Preventing Damage by Antisocial Forces in the Real Estate Industry" so that the real estate industry as a whole can promote collective efforts to prevent the transfer of criminal proceeds and eliminate antisocial forces in preparation for the total enforcement of the Act on Prevention of Transfer of Criminal Proceeds. The Liaison Council, in cooperation with related ministries and agencies including the Ministry of Land, Infrastructure and Transport and the National Police Agency, is promoting such efforts as discussing the development of the responsibility system with relevant operators, preparing and distributing a brochure or the like for enlightenment, and sharing information concerning the operation of systems including the Act on Prevention of Transfer of Criminal Proceeds.

## 4 | Efforts of Lawyers Associations

The Japan Federation of Bar Associations had been examining the relation between anti-money laundering measures and the duties of a lawyer, recognizing the importance of the measures and established with a resolution of the general assembly meeting in March 2007 the "Rules on Identification of Clients and Record-Keeping" stipulating obligations of a lawyer; e.g., confirming the identity of a client, preserving the records for certain practices, and not accepting a request if suspected to be used for transfer of criminal proceeds. The rule was put into effect on July 1, 2007.

The Japan Federation of Bar Associations, in cooperation with each bar association distributed PR leaflets, gave seminars and delivered training videos on the Internet for a successful implementation of the rule.
# Chapter4 Reports of Suspicious Transactions

The Act on Prevention of Transfer of Criminal Proceeds requires the specified businesses operators to file a report to a competent administrative authority if a transaction is suspected to be related to criminal proceeds. This measure was made obligatory for the first time in the Anti-Drug Special Law and was taken over to the Act on Prevention of Transfer of Criminal Proceeds through the Organized Crimes Punishment Law. The following is the outline and operational conditions of the STR regime.

## Section1 Outline of the Suspicious Transaction Report System

## 1 | Purpose

Suspicious transaction report system aims, by supporting investigation on money laundering and predicate offences, to prevent illegal use of the services of legal businesses and maintain their soundness.

## 2 | Cases in which Reporting is Required

Specified business operators are required to file an STR to a corresponding supervising authority, when they suspect, during the course of their businesses (types of the businesses listed in table 2-2), that assets they received are criminal proceeds or that their client commits an offence of concealment of criminal proceeds.

## 3 | Announcement of Guidelines

Specified business operators are expected to judge whether the concerned transaction is a suspicious transaction with their own knowledge and experience at that industry, taking into account the form of transaction, client attributes and conditions surrounding the transaction. It may well be the case, however, that some operators simply lack adequate understanding of money laundering and find it difficult to make an appropriate judgment. Therefore, in Japan, since the time of the Anti-Drug Special Law, "List of Reference Cases of Suspicious Transactions," has been issued for specified business operators as a guideline for reporting. It is often called the "Reporting Guideline." Under the Act on Prevention of Transfer of Criminal Proceeds, which covers a wider variety of businesses than before, competent supervisory authorities issue Reporting Guidelines, based on the characteristics of respective businesses.

These guidelines are listed in Annex, and as clarified in the introduction thereof, samples of suspicious transactions are intended merely for reference. This means, it is for the operator to judge whether an individual case is a suspicious transaction, taking into account the client's attributes, con-
differences surrounding the transaction and other specifics of the transaction. All the transactions that appear to match the listed samples do not necessarily have to be reported as suspicious, while transactions that do not fall within any of them may still be suspicious and subject to reporting.

## 4 | Flow of the Suspicious Transaction Reporting

Information reported by specified business operators are collected at JAFIC via the competent administrative authorities. (Internet reporting is submitted first to JAFIC, which then copy it to the competent authority.) JAFIC sorts and analyzes suspicious transaction reports and then hands over the result of analysis to investigative authorities such as Prefectural Police and the Public Prosecutors Office. Investigative authorities use STRs as clues for arrests, detection of criminal proceeds and tracing the source of illicit funds. JAFIC also provides foreign FIUs on their request with information of overseas transactions so they can trace criminal proceeds transferred across borders.

Figure 4-1 Flow of STRs from specified business operators, through JAFIC to investigative authorities

## 5 | Information Security Measures

Since STRs include sensitive information on individuals and business activities, JAFIC makes utmost efforts to prevent leakage, loss, damage, or other misconducts. National Public Safety Commission sets forth in its rule how relevant information should be handled and other information security measures.

Following are some of the security measures JAFIC takes.

## (1) Management of Entering and Exiting

Terminals that can access information stored in the 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 the 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 mistakes occur, 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.

## (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 | Transition of Number of Reporting

As described in Chapter 1, the system of suspicious transaction reports was first established with the enforcement of the Anti-Drug Special Law in 1992. At that time targeted transactions were only proceeds obtained from drug crimes. There were less than 20 cases reported between 1992 and 1998, and in 1999, the eighth year since the enforcement of the Anti-Drug Special Law, the number finally reached 1000. However, with the enforcement of the Organized Crimes Punishment Law in February 2000, the scope of predicate offences was significantly expanded and the number of reports has been increasing ever since. The number of reports of 2007 reached 158,041, an increase of 44,181 cases (38.8%) from the year before, and about 20.8 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 (2000-2007)

Note 1: Reports that were 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. Note 2: Reports that were disseminated by the Financial Services Agency between February 2000 and March 2007 and by the National Public Safety Commission and National Police Agency after April 2007.

The circumstances regarding the increase in reporting numbers can be thought to be an overall improvement of compliance awareness in society, the tendency of financial institutions' strengthening of surveillance on illegal funds, and the permeation of the system of suspicious transaction reports in financial institutions. In particular, many financial institutes, in which the number of reports has increased, not only have strengthened their system of detecting suspicious transaction by adding staff in charge of anti-money laundering and implementing detection systems, but also have implemented thorough education to improve staff members' understanding. There is an overall tendency of financial institutions that take measures both tangibly and intangibly.

At Bank A, a major city bank, the Money Laundering Prevention Section was established, focusing on managing reports of suspicious transactions with tens of staff members. Also, the board of directors issued money laundering prevention regulations, and they performed training and education for all staff members and at each branch. As a result, the number of Bank A's reports of suspicious transactions increased 55.2% compared to the previous year.

Money Laundering Prevention Section of Bank A