Silviase/jgov_v1.4_full_ann huggingface dataset:
## Paragraph 2 Calling for actions by Specified Business Operators upon the Adoption of the United Nations Security Council Resolutions

When the United Nations Security Council adopts a resolution requiring countries to freeze the funds or other assets related to any persons or entities in order to prevent and suppress terrorism and terrorist financing, the National Police Agency, in cooperation with relevant Ministries and Agencies, shall disseminate the content to specified business operators (excluding lawyers, judicial scriveners, certified administrative procedures specialists, certified public accountants and tax accountants; the same applies in this paragraph) and request the thorough CDD and reporting of suspicious transactions on persons or entities subject to the resolutions concerned. And, the targeted persons or entities shall be listed on the website of JAFIC.

## 1 Measures based on the United Nations Security Council resolutions (UNSCRs)

Japan implements targeted financial sanctions to freeze assets of persons or entities associated with the Taliban according to UNSCRs concerned. Every time the list of such parties is revised, the National Police Agency requires specified business operators through supervisory authorities to ensure CDD and reporting of all suspicious transactions. Such a requirement was made a total of 17 times in 2015.

## 2 Measures based on the FATF Public Statement

The FATF Plenary held in February, June and October 2015 adopted the Statement which called on all FATF members and other jurisdictions to apply countermeasures to protect the international financial system from ML/TF risks emanating from Islamic Republic of Iran and North Korea. In response, the National Police Agency has issued a notice through supervisory authorities that specified business operators should properly perform CDD and reporting suspicious transactions.

The Plenary also adopted a statement concerning the jurisdictions having strategic deficiencies in the measures against ML/TF, to which the National Police Agency referred in the notice above.

## Paragraph 3 National Risk Assessment of Money Laundering and Terrorist Financing

## 1 Backgrounds

In modern society, where the advance of IT and the globalization of economic activities and financial services are proceeding, the situation surrounding ML/TF is constantly changing. To strenuously implement AML/CFT, global actions based on cooperation between countries need to be taken.

The FATF Recommendations revised in February 2012 (new FATF 40 Recommendations) call on individual countries to identify and assess risks of ML/TF for the country.
In light of the fact that legal persons and legal arrangements are being misused for money laundering and tax evasion due to a lack of transparency over their ownership and control, at the G8 Lough Erne Summit held in June 2013, an agreement was reached on the G8 Action Plan Principles to prevent the misuse of legal persons and legal arrangements, which calls for concrete actions including that authorities should understand the risks to which their AML/CFT regime is exposed and implement proportionate measures to target those risks.

Japan expressed its strong commitment to AML/CFT by issuing the national action plan in the same month declaring that the government would establish an inter-ministerial working team with the Financial Service Agency on board under the chair of the National Police Agency with a view to completing the works on the national risk assessment by the end of 2014.

Relevant ministries and agencies conducted a study based on this plan, and in December 2014, “National Risk Assessment of Money Laundering and Terrorist Financing” was published.

## 2 Purpose

The national risk assessment should serve as a basis of the risk-based approach which specified business operators apply in order to perform AML/CFT measures more effectively and efficiently in a way commensurate with the level of risk of each transaction and the customer or business relationship identified through the NRA.

## 3 Publication of National Risk Assessment Report and Overview

Following the partial amendment of the Act on Prevention of Transfer of Criminal Proceeds, the National Public Safety Commission shall make and publish the National Risk Assessment Report each year. Based thereon, the National Risk Assessment Report was made in cooperation with relevant ministries and agencies. The National Risk Assessment Report, published in September 2015, analyzed the specific characteristics of the following risk factors, measures to mitigate the risk and example cases of arrest, and indicated the risk level. The National Risk Assessment Report is available on JAFLC's website.

Factors related to products and services

Transactions related to deposit and savings accounts, domestic exchange, safe deposit boxes, bills, cheques, etc.

Factors related to transaction type

Non-face-to-face transactions, cash transactions, etc.

Factors related to countries and jurisdictions

Countries and jurisdictions indicated in the FATF Public Statement of their deficiencies on measures against ML/TF

Factors related to customers

Anti-social forces, non-residents, individuals who are or have been entrusted with a prominent public function in a foreign country (Politically Exposed Persons), etc.
## Section 3 Requests to Submit Reports and Opinion Statements in 2015

When suspicion surfaces during the investigation of cases including special fraud cases by the Prefectural Police with regard to the possibility that a specific business operator (excluding lawyers; the same applies in this section) violates the obligation of customer identity verification and other matters prescribed in the Act on Prevention of Transfer of Criminal Proceeds, the National Public Safety Commission/the National Police Agency make requests to the alleged specified business operators for submission of reports, and make opinion statements to competent administrative authorities.

## 1 Requests to Submit Reports and Opinion Statements by the National Public Safety Commission/the National Police Agency

In 2015, the National Public Safety Commission/the National Police Agency made 11 requests to submit reports to Postal Receiving Service Providers, and gave two directions to Prefectural Police to make necessary inquiries on the violation of specified business operator's obligation regarding CDD. In addition, based on the past reports submitted, they issued to competent administrative authorities in charge of supervising specified business operators 10 opinion statements to the effect that necessary measures should be implemented in order to rectify violations of the Act on Prevention of Transfer of Criminal Proceeds by specified business operators in 2015; specifically, eight statements to the Minister of Economy, Trade and Industry, which is the authority over postal receiving service providers; and two to the Minister of Internal Affairs and Communications, which is the authority over telephone forwarding service providers.

No onsite inspections by police officers were performed.
Table 3-1 Number of supervisory actions

Year	2011	2012	2013	2014	2015
Number of requests to submit reports to specified business operators	5	9	11	10	11
Postal receiving service providers	4	8	10	8	9
Telephone receiving service providers	0	1	0	0	0
Telephone forwarding service providers	0	0	0	2	0
Providers of both postal receiving service and telephone forwarding service	0	0	1	0	2
Certified administrative procedures specialists	1	0	0	0	0
Number of directions to conduct inquiry to prefectural police	3	3	1	5	2
Postal receiving service providers	3	3	0	4	2
Telephone forwarding service providers	0	0	0	1	0
Providers of both postal receiving service and telephone receiving service	0	0	1	0	0
Number of opinion statements made to competent administrative authorities	10	10	10	11	10
Postal receiving service providers	10	8	9	9	8
Telephone receiving service providers	0	1	1	0	0
Telephone forwarding service providers	0	0	0	2	2
Certified administrative procedures specialists	0	1	0	0	0

## 2 Issuing of Rectification Order by Competent Administrative Authorities Based on Opinion Statements

In 2015, in light of Opinion Statements issued by the National Public Safety Commission/the National Police Agency, the Minister of Economy, Trade and Industry issued five Rectification Orders to postal receiving service providers.
Figure 4-1 Flow of STRs from Specified Business Operators, through JAFIC to Investigative Authorities

## 3 When STRs are Required

Under Article 8 of the Act on Prevention of Transfer of Criminal Proceeds, it is required that specified business operators promptly file an STR with the competent administrative authorities when there is any suspicion, taking into account information obtained through CDD that assets they received could be criminal proceeds or that the customer could commit acts that constitute crimes under Article 10 of the Act on Punishment of Organized Crimes (concealment of criminal proceeds) or Article 6 of the Anti-Drug Special Provisions Law (concealment of drug-related criminal proceeds) with respect to specified businesses.

Figure 4-2 Cases where STRs are required
## 4 Identification of Suspicious Transactions

Specified business operators are expected to determine whether there is any suspicious activity behind the transaction concerned based on their own knowledge and experience in their particular field of business, also taking into account some factors including the nature of transactions or types of customers. In other words, specified business operators should determine whether the transactions are suspected of being related to ML/TF in the context of each transaction conducted. However, not all of them identify ML/TF risks in every transaction and they may find it difficult to make an appropriate determination. Therefore, competent administrative authorities that oversee specified business operators have announced "reference cases of suspicious transactions," based on the characteristics of respective specified business operators. These cases are provided as a reference to help specified business operators find or identify suspicious transactions in their day-to-day operations. Although all the transactions that appear to match the listed samples in the reference cases do not necessarily have to be reported as suspicious, any transaction that specified business operators determine as should be reported.

As a result of the partial amendment of the Act on Prevention of Transfer of Criminal Proceeds in 2014, a provision concerning judgment related to suspicious transaction reporting was introduced to require that specified business operators make judgment as to whether or not to submit a suspicious transaction report under a method prescribed by the competent ministry's relevant ordinance while taking account of the contents of the NRA in addition to the results of verification at the time of transactions (to be put into force on October 1, 2016).

## 5 Information Security

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

In particular, since a large amount of information is stored in the database system which manages suspicious transaction information, sufficient security measures need to be taken. Various security measures put in place at JAFIC are as follows.

## (1) Management of Entering and Exiting

Terminals that can access information stored in the JAFIC database are located in a room with doors that are 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 by the terminal device. In other words, information can be reached only after authentication is carried out 3 times, in 3 different ways. During the authentication procedure, if more than one mistake occurs, access to the terminal device is denied to prevent unauthorized use.

## (3) Surveillance of Terminal Device

All processing operated at the terminals, such as access to information and printing of
query results, is monitored and recorded by the surveillance software. This allows for tracing in case of wrongful operation, and prevents improper use of information within the organization.

## (4) Physical Measures of Terminal Device

Each terminal device is firmly affixed to a desk with a security wire, to prevent theft.

## (5) Strengthening of Server Management

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

## (6) Encryption of Terminal Device’s Hard Disk Drive Information

The hard disk drives on the terminal device that are used to access the database system are all encrypted. Hence, even 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 the terminals is encrypted with a special circuit.

## Section 2 Situation of STR filings in 2015

## 1 Transition of the Number of STR filings

Although the suspicious transaction reporting system was established with the enforcement of the Anti-Drug Special Provisions Law in 1992, less than 20 reports were received 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 Punishment of Organized Crimes in 1999, crimes subject to suspicious transaction reports were extended besides drug-related crimes to include other serious crimes as specified by the act, and the number of reports received exceeded 1,000 cases in the same year. Since the enforcement of the Act on Punishment of Organized Crimes in the year 2000, the number of reports has increased every year, and has kept increasing since the partial enforcement of the Act on Prevention of Transfer of Criminal Proceeds in 2007. The number of reports received in 2015 was 399,508, increasing by 21,995 cases (5.8%) from the previous year (see Figure 4-3).
Figure 4-3 Trend Diagram of Number of STRs (2006-2015)

Note 1: “Number of Reports Received” (2003-2012) is the total number of the reports received by the Financial Services Agency (JAFIO) until March 2007 and those received by the National Public Safety Commission/the National Police Agency (JAFIC) after April 2007.

Note 2: “Number of Reports Disseminated” (2002-2011) is the total number of the reports disseminated by JAFIO to the National Police Agency until March 2007 and those disseminated by JAFIC to investigative authorities etc. after April 2007.

Note 3: The number of reassessed cases refers to the number of cases concerning which it was judged that information that had been withheld from dissemination for such reasons as that the information is relating to a case under investigation could be disseminated as a result of the review and analysis of the information (data collection of the number of reassessed cases started in 2012).

## As a possible underlying factor of this trend, the following can be raised

○Spreading compliance culture among the general public has encouraged financial institutions’ efforts in fighting against anti-social forces and applied stringent monitoring over their financial or other economic activities.

The effect of education on the necessity of reporting suspicious transactions, via seminars, etc. held for financial institutions, etc.

Specifically, financial institutions have allocated much more resources to various AML/CFT measures. In particular, financial institutions with larger submission of STRs are promoting training programs for their employees to improve the individual AML/CFT capability, while having strengthened the IT system to identify suspicious transactions, by increasing the number of personnel in charge of money laundering countermeasures and the introduction of the detection systems for suspicious transactions.

No STRs was deleted in 2015. The number of STRs stored as of the end of 2015 was 3,169,450.
## 2 Number of Received Reports by Business Types

The number of suspicious transaction reports that each category of business operators filed in 2015 is shown in Table 4-1. Banks etc. have the highest number of reports with 351,009 cases, or 87.9% of all reports, followed by credit card operators (13,666 cases, or 3.8%) and Shinkin banks and credit cooperatives (13,188 cases, or 3.3%) (see Table 4-1).

Table 4-1 Number of Received STRs by Each Business Type

Year Category	2011	2012	2013	2014	2015
Number of reports	%	Number of reports	%	Number of reports	%	Number of reports	%	Number of reports	%
Financial Institutions etc.	334,903	99.3%	360,513	98.9%	344,147	98.5%	366,779	97.2%	385,639	96.5%
Depository Institutions	324,600	96.2%	348,831	95.7%	329,127	94.2%	349,204	92.5%	366,965	91.9%
Banks etc.	311,298	92.3%	333,868	91.6%	313,435	89.7%	332,443	88.1%	351,009	87.9%
Shinkin Banks and Credit Cooperative	12,453	3.7%	13,521	3.7%	14,089	4.0%	15,018	4.0%	13,188	3.3%
Labour Banks	248	0.1%	357	0.1%	290	0.1%	298	0.1%	371	0.1%
Norinchukin Banks etc.	601	0.2%	1,085	0.3%	1,313	0.4%	1,445	0.4%	2,397	0.6%
Insurance Companies	677	0.2%	1,837	0.5%	3,002	0.9%	3,817	1.0%	2,918	0.7%
Financial Instruments Business	6,758	2.0%	5,998	1.6%	7,373	2.1%	7,732	2.0%	8,951	2.2%
Money Lending Business	581	0.2%	1,628	0.4%	1,872	0.5%	3,349	0.9%	4,427	1.1%
Fund Transfer Companies	344	0.1%	380	0.1%	363	0.1%	807	0.2%	585	0.1%
Commodity Futures Traders	5	0.0%	3	0.0%	53	0.0%	16	0.0%	9	0.0%
Currency Exchanging Operators	1,937	0.6%	1,835	0.5%	2,119	0.6%	1,574	0.4%	1,633	0.4%
Electronic Monetary Claim Recording Institutions	1	0.0%	1	0.0%	1	0.0%	0	0.0%	0	0.0%
Other	0	0.0%	0	0.0%	237	0.1%	280	0.1%	151	0.0%
Financial Leasing Operators	45	0.0%	109	0.0%	62	0.0%	86	0.0%	160	0.0%
Credit Card Operators	2,350	0.7%	3,664	1.0%	5,086	1.5%	10,608	2.8%	13,666	3.4%
Real Estate Agents	5	0.0%	10	0.0%	1	0.0%	1	0.0%	9	0.0%
Dealers in Precious Metals and Stones	4	0.0%	28	0.0%	7	0.0%	5	0.0%	10	0.0%
Postal Receiving Service Providers	34	0.0%	42	0.0%	57	0.0%	34	0.0%	24	0.0%
Telephone Receiving Service Providers	0	0.0%	0	0.0%	0	0.0%	0	0.0%	0	0.0%
Telephone Forwarding Service Providers	0	0.0%	0	0.0%	0	0.0%	0	0.0%	0	0.0%
Other	0	0.0%	0	0.0%	1	0.0%	0	0.0%	0	0.0%
Total	337,341	100.0%	364,366	100.0%	349,361	100.0%	377,513	100.0%	399,508	100.0%

## 3 Number of Received Reports Classified by Methods

According to reports of suspicious transaction by method, report by electronic application
using the e-governance on-line window (e-Gov), or other means (for example, sending documents etc. to the competent administrative authorities) are described in Table 4-3.

Table 4-2 Number of Received Reports Classified by Method

Year	2011	2012	2013	2014	2015
Notification Method	Number of reports	%	Number of reports	%	Number of reports	%	Number of reports	%	Number of reports	%
Electronic Application	184,774	54.8%	236,882	65.0%	255,258	73.1%	295,640	78.3%	366,843	91.8%
Other Methods	152,567	45.2%	127,484	35.0%	94,103	26.9%	81,873	21.7%	32,665	8.2%
Total	337,341	100.0%	364,366	100.0%	349,361	100.0%	377,513	100.0%	399,508	100.0%

The ratio of reports by electronic application to all types of report in 2015 was 91.8%, an increase of 13.5 points from the previous year.

JAFIC will continue working on further prevalence of the online reporting at all opportunities in order to reduce burdens on specified business operators associated with the reporting obligation.

## Section 3 Dissemination and Use of STRs in 2015

## Paragraph 1 Dissemination

JAFIC collects, arranges and analyzes all STRs reported by specified business operators that will contribute to the investigation of money laundering, predicate offenses or other offenses, and disseminates them to LEAs. The receiving LEAs are the Prefectural Police, Public Prosecutors Office, Narcotics Control Department, Japan Coast Guard, Japan Customs and SESC.

The number of STRs disseminated to LEAs has kept growing every year mainly because the number of suspicious transaction reports deemed to contribute to the investigation of money laundering crimes and predicate offenses for such crimes has increased as a result of efforts by specified business operators to strengthen the system to monitor anti-social forces and transfer of illicit funds. The number of STRs disseminated to LEAs was 435,055, a record high, in 2015, an increase of 86,277 (24.7%) from the previous year. (See figure 4-3). There was no request from an investigative authority to view or copy an STR or to have a copy sent to it.

## Paragraph 2 Use of STRs in the Prefectural Police

The number of cases cleared by Prefectural Police that were initiated with information in STRs (“STR-initiated cases”) has increased every year. The number was 1,096 in 2015, an increase of 95 cases (9.5%) from the previous year.