financial institutions etc. to determine if each transaction was actually related to drug crimes in reporting suspicious transactions, resulting in fewer suspicious transaction reports. Another reason for this ineffectiveness was that there was no system in place to collect reported information or to disseminate it to investigative authorities.

To address these problems, “the Act on Punishment of Organized Crimes and Control of Crime Proceeds” (hereinafter referred to as “the Act on Punishment of Organized Crimes”) was enforced in February 2000 in Japan based on “The 40 Recommendations” as revised in June 1996. This law represented progress in regulations against criminal proceeds on several points. Firstly, the scope of predicate offences for money laundering was extended from drug-related crimes to those and other serious crimes. Secondly, the scope of crimes subject to the suspicious transaction reports regime was also extended to include other serious crimes as well as illegal drug crimes. Thirdly, the law designated the Financial Supervisory Agency (later reorganized to the Financial Services Agency) as the FlU of Japan, and also established the Japan Financial Intelligence Office (JAFIO) within the agency.

## 3 Enforcement of “the Act on Punishment of Financing of Offences of Public Intimidation” and “the Customer Identification Act”, and Revision of “the Act on Punishment of Organized Crimes”

As a major development after the terrorist attacks in US, “the Act on the Punishment of Financing of Offences of Public Intimidation” was enforced in July 2002 as a domestic law to implement “the International Convention for the Suppression of the Financing of Terrorism” (not yet ratified at that time), criminalizing terrorist financing and collecting of funds for terrorism. At the same time as the adoption of “the Act on Punishment of Financing Offences of Public Intimidation”, “the Act on Punishment of Organized Crimes” was partially revised, so that the terrorist financing/fund collection offence was included in predicate offences. Moreover, terrorist funds were stipulated as criminal proceeds, which means that assets suspected of terrorist funds are now subject to reporting as suspicious transactions. Also, to implement the customer identification process/keeping transaction records required under the said Convention and the recommendations, “the Law on Customer Identification by Financial Institutions, etc.,” was adopted (enforced in Jan. 2003).

Because of frequent abuse of bank accounts under other or fictitious names for offences such as Billing Fraud, the Law on Customer Identification by Financial Institutions, etc. was revised in December 2004 to provide sanctions to transfer (both receiving/assignment) of passbooks etc. soliciting, or the like, and the title was changed to "the Act on Confirmation of Customers Identification by Financial Institution, etc. and Prevention of Unauthorized Use of Deposit Account, etc." (hereinafter referred as "the Customer Identification Act")

## 4 Enforcement and Amendment 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 non-financial businesses and professions, “the Headquarters for Promotion of Measures Against