Silviase/jgov_v1.4_full_ann huggingface dataset:
transfer of passbooks, etc.

The following a few sections will explain the important parts of the act.

For the fundamental structure of the act, please refer to Fig. 2-2.

## 1 Purpose of the Act (Article 1)

The purpose of this act is to prevent the transfer of criminal proceeds and to ensure the appropriate enforcement of international treaties, etc., concerning the prevention of terrorist financing and thereby, to ensure the safety and peace of national life and to contribute to the sound development of economic activities by way of devising such measures as the verification of customer identification data, preservation of transaction records or the like, and reporting of suspicious transactions by specified business operator, as described in 3, coupled with other measures stipulated by the Act on Punishment of Organized Crimes and the Anti-Drug Special Provisions Law.

## 2 Criminal Proceeds (Paragraph 1 of Article 2)

The term “criminal proceeds” as used in this Act means criminal proceeds etc. prescribed in Article 2, paragraph 4 of the Act on Punishment of Organized Crimes or drug-related criminal proceeds etc. prescribed in Article 2, paragraph 5 of the Anti-Drug Special Provisions Law.

## 3 Specified Business Operators (Paragraph 2 of Article 2)

Financial institutions and DNFBPs which fall under the Act and thus are required to perform CDD and other obligations, are called “Specified business operators,” the scope of which is designated in line with the FATF standards as well as in consideration of business practices in Japan. Financial institutions etc. have already been obliged to undertake identical measures required by the Customer Identification Act (abolished by enforcement of the Act on Prevention of Transfer of Criminal Proceeds) and other regulations.

## Specified business operators

○Financial institutions, etc. (Item 1 through 36) (Pre-Amendment Items 1-33):

Bank; Shinkin bank; Federation of Shinkin banks; Labor bank; Federation of labor banks; Credit cooperative; Federation of credit cooperatives; Agricultural cooperative; Federation of agricultural cooperatives; Fishery cooperative; Federation of fishery cooperatives; Fishery processing cooperative; Federation of fishery processing cooperatives: Norinchukin Bank; Shokochukin Bank; Development Bank of Japan; Insurance company; Foreign insurance company, etc.; Small-claims/short term insurance business operator; Federation of fishery cooperatives for mutual aid; Financial instruments business; Securities finance company; Specially permitted business notifying person; Trust company; Self-trusteed companies; Real estate specified joint enterprise operator; Mutual loan company; Money lender; Call money market broker; Fund transfer companies, Futures commission merchant; Book-entry, transfer institution; Account management institution; electronic receivables recording
organizations; Management Organization for Postal Savings and Postal Life Insurance; Currency exchanging operator

○Financial leasing operator (Item 37) (Pre-amendment Item 34)

○Credit card operator (Item 38) (Pre-amendment Item 35)

Real estate agents (Item 39) (Pre-amendment Item 36)

○Dealers in precious metals and stones (Item 40) (Pre-amendment item 37)

○Postal receiving service providers, telephone receiving service, providers and telephone

forwarding service providers(Item 41) (Pre-amendment Item 38(Telephone forwarding services providers were added as part of the 2011 amendment.))

○Lawyer or legal profession corporation (Item 42) (Pre-amendment Item 39)

○Judicial scrivener or judicial scrivener corporation (Item 43) (Pre-amendment Item 40)

○Certified administrative procedures specialists or administrative scrivener corporation (Item 44) (Pre-amendment Item 41)

○Certified public accountant or audit firm (Item 45) (Pre-amendment Item 42)

☐Certified public tax accountants or certified tax accountant corporation (Item 46) (Pre-

amendment Item 43)

## 4 Responsibilities of the National Public Safety Commission and FIU (Article 3)

This Act provides that the National Public Safety Commission has responsibilities to endeavor 1) to enhance public awareness on the importance of the prevention of the transfer of criminal proceeds in order to ensure specified business operators conduct appropriate measures in performing CDD, and to provide them with assistance including the provision of information on the modus operand; regarding the transfer of criminal proceeds, and 2) to promptly and appropriately collect, arrange and analyze information on criminal proceeds including information on suspicious transactions reported by specified business operators so that such information can be effectively utilized in the investigation into criminal cases and related international cooperation.

## 5 Measures by Specified Business Operator

Under the act, specified business operators are obligated to engage in the following.

Specified business operators, specified business affairs subject to obligations, specified transactions subject to the verification at the time of transaction, and related obligations are shown in Figure 2.

## (1) Verification at the time of transaction (Article 4)

In conducting transactions falling under “specified transactions” or whenever money laundering is suspected behind the transactions because of, for example, their presenting false purpose of the transaction, verify identification data of a customer such as: the name and domicile by asking for his/her identification documents such as driver's license; purpose and intended nature of the transaction: type of business; information on the beneficial owner; etc. (for professions such as judicial scriveners, administrative scriveners, certified public accountants, or tax accountants, identification details alone
are sufficient).

For high risk transactions, enhanced measures must be taken, requiring additional information as to assets/income of the customer (under the revised Act 2011). (For details, see the Japan Financial Intelligence Center (JAFIC) Website.

Guidelines on verification to be made at the time of transactions are as shown in Figure 2-3.

(2) Preparation and preservation of verification records (Article 6)

Prepare and keep records of verification records collected at the time of transaction, as well as measures taken for verification of the customer at the time of the transaction, for seven years from the day when the transactions were completed or terminated;

(3) Preparation and preservation of transaction records etc. (Article 7)

Prepare and keep the record of the date and contents etc. of transactions concerned for seven years;

(4) Reporting of suspicious transactions (Article 8) (Pre-amendment Article 9)

Report transactions that are suspected of being related to criminal proceeds to a competent administrative authority, except for professions such as judicial scriveners;

(5) Notification pertaining to foreign exchange transactions (Article 9) (Pre-amendment Article 10)

In conducting exchange transactions pertaining to payment from Japan to foreign countries, notify the receiving institutions of certain items such as the name and the account number. This article is applied only to financial institutions etc., that can conduct exchange transactions;

(6) Measures to ensure thorough and effective CDD measures to be taken (Article 10) (New)

Specified business operators are required to perform on going due diligence, and to set up other systems as necessary.

(7) Measures by lawyers (Article 11) (Pre-Amendment Article 8)

It is established by special provision, that lawyers shall conduct measures relevant to those described in (1) through (3) and (6) above based on The Rule of the Japan Federation of Bar Associations in line with cases of judicial scrivener etc.

Customer identification, preparation and preservation of customer identification records and transaction records described in (1) through (3) above are expected to work as warnings against persons who attempt to transfer criminal proceeds and to enable tracing proceeds afterwards. Suspicious transaction reports described in (4) will be used for investigations into money laundering offences and predicate offences and will prevent criminals from abusing economic and financial systems, so that its soundness can be assured. Measures (as noted in (6)) are intended to ensure accuracy of the customer identification process during transactions, making the process more efficient. These measures are expected to help business operators be more aware of money laundering risks, facilitating a greater degree of comprehensiveness and efficiency.

The purpose of notification pertaining to foreign exchange transactions described in (5)
## 6 Dissemination of Information on Suspicious Transactions (Articles 12 and 13) (Pre-amendment Articles 11 and 12)

In order to make use of information on suspicious transactions for domestic and overseas investigation etc., the National Public Safety Commission may disseminate information to authorities in charge of investigating criminal cases such as public prosecutors, assistant officers to prosecutors, judicial police officials (police officers, narcotics control agents and coast guards), customs officers and personnel of the Securities and Exchange Surveillance Commission, and to a foreign Flu under certain conditions.

## 7 Supervisory Measures (Articles 14 through 18, 24, 25 and 29) (Pre-amendment Articles 13 through 17, 23, 24, and 28)

This Act provides inspection power to competent administrative authorities so that they can detect irregularities by specified business operators. The authorities can also employ various supervisory methods etc. such as guidance, advice, suggestion, and rectification order in the case of violation for a better compliance by specified business operators.

Persons who have failed to submit reports or materials, or submit false reports or materials, or who refused on-site inspections, shall be punished with imprisonment with labor for not more than one year or a fine of not more than three million yen or both. A person who violates rectification order shall be punished with imprisonment with labor for not more than two years or a fine of not more than three million yen or both.

Moreover, to complement supervisory function, the National Public Safety Commission is authorized to state its opinion to competent administrative authorities and to make necessary inspections on business operators when it detects violations.

### 8 Penal Provisions regarding Reception/Delivery/Provision of Deposit/Savings Passbooks, Exchange Transaction Cards etc. (Articles 27 and 28) (Pre-amendment Articles 26 and 27)

Lots of deposit/savings passbooks, ATM cards, Exchange Transaction Cards etc. which were purchased have been misused in various crimes such as money laundering. In order to prevent this, this act regulates persons who take over, receive or obtain a deposit/savings passbook etc. for value or for free, shall be punished with imprisonment with labor for not more than one year or a fine of not more than one million yen or both and a man who has committed, as a business, these crimes shall be punished by imprisonment with work for not more than three years or a fine of not more than five million yen or both.

Furthermore, persons who invite or solicit another party to assign, deliver or provide a deposit/savings passbook etc., for value or for free, shall be punished imprisonment with labor for not more than one year or a fine of not more than one million yen or both.
Figure 2-3 Methods of Verification at the Time of Transaction

※ For transactions that carry a high risk of money laundering, verification of transaction purposes must be carried out with stricter criteria. And, for transactions of over $ \backslash2 $ million, verifications of assets and income are also required.

## Section 2 Outline of the Anti-Drug Special Provisions Law and the Act on Punishment of Organized Crimes

## Paragraph 1 Anti-Drug Special Provisions Law

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” compiled in 1990, and enforced in July 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 by the Act on Punishment of Organized Crimes, then by the Act on Prevention of Transfer of Criminal Proceeds.
## 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.

### (1) 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.

### (2) Crime of receipt of drug crime proceeds etc. (Article 7)

The act of “knowingly receiving drug crime proceeds etc.” is criminalized by this article. An act in which a main member of Boryokudan group receives money from those who works under him, knowing that the money has been obtained from drug crime, is an example of this case.

## 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 Special Provisions Law has been strengthened compared to the existing system of confiscation and collection of equivalent value in the Penal Code in that the target is not limited to tangible property, but is extended to deposit claims etc. and that confiscation and collection of equivalent value are compulsory. Moreover, it can be prohibited by court order to dispose of drug crime proceeds which should be confiscated prior to court decision in order to ensure the confiscation of the proceeds. As the risk of disposal by a criminal will be raised if he/she knows of the commencement of investigation, the court can issue a securance order even before the prosecution upon request of a police officer etc. with a fixed period of 30 days, which could be renewable.
## Paragraph 2 The Act on Punishment of Organized Crimes

The Act on Punishment of Organized Crimes was enacted in tandem with the extension of predicate offences in the revised FATF “40 Recommendations” of 1996 and the international agreement on the establishment of an FIU, and was enforced in February 2000. In terms of criminal proceeds regulations, this law is characterized by the extension of the scope of predicate offences from drug crimes to those and certain other serious crimes.

The regulations related to the functions of FLU initially existed in the Act on Punishment of Organized Crimes, but they are now superseded by the Act on Prevention of Criminal Proceeds.

## 1 Punishment of Money Laundering (Article 9 through 11)

According to the Act on Punishment of Organized Crimes, in addition to acts of disguising, concealing, and receiving stipulated in the Anti-Drug Special Provisions Law, changing a director etc. as a means of managing an enterprise etc. by using illicit proceeds shall be punished as another type of money laundering. The range of predicate offences that generate criminal proceeds is stipulated in the attachment to the Act on Punishment of Organized Crimes, to which additional predicate offences are added as necessary.

## 2 Confiscation, Collection of Equivalent Value and Securance Measures (Article 13 through 16, 22, 23, 42, 43)

The system of confiscation and collection of equivalent value provided in the Act on Punishment of Organized Crimes is subject to the discretion of the court, unlike the system provided in the Anti-Drug Special Provisions Law. However, it has been strengthened compared to the existing system in the Penal Code in that the target is extended to monetary claims, assets obtained as the fruit of criminal proceeds are also within the scope, securance measures have been established, and so on.

At the time of the enactment of the Act on Punishment of Organized Crimes, it was stipulated that so-called “crime victim property”, such as proceeds obtained through crime concerning property etc. may not be confiscated nor additional collections made in consideration of damage claims by victims. However, the law was partially revised (enforced in Dec. 2006) to enable confiscation or additional collection in certain cases—for example where the crime is considerably organized—in which it would be difficult to recover damages asserting rights to seek damages or other rights, or where money laundering is involved.
# Efforts of specified business operators and promotion of public awareness.

It is important to note that in order to effectively implement countermeasures against money laundering, it is critical that specified business operator obligations are properly enforced. To ensure that this happens, a variety of initiatives are implemented by organizations across industries. Also, the competent administrative authorities, along with the National Public Safety Commission/the National Police Agency, utilize workshops and website material to enlist the cooperation of specified business operators on these initiatives and to boost understanding of the Act on Prevention of Transfer of Criminal Proceeds.

In addition, if it is determined that a specified business operator is not fulfilling its obligations, then the National Public Safety Commission/the National Police Agency issue an Opinion Statement to a competent administrative authority, and the authority then issues a Rectification Order to the specified business operator.

## Section 1 Efforts of Specified Business Operators

## 1 Efforts of Banking Industry

The “Japanese Bankers Association” (hereinafter referred to as “JBA”), of which most of the banks operating in Japan are members, established the “Working Committee on Money Laundering Issues” within the JBA in 1990 and, since then, has been taking anti-money laundering and combating the financing of terrorism (AML/CFT) measures, such as preparing and providing notices on items to keep in mind regarding the procedures of customer due diligence and suspicious transaction reporting, preparing and distributing seminar handbooks to its members, giving seminars for its members, and so on.

Furthermore, the JBA prepares leaflets, posters or the like to be provided to customers regarding customer due diligence procedure etc. In addition, the JBA is promoting organizational measures on issues related to money laundering and terrorist financing inside and outside of Japan by following, at all times, the development of AML/CFT measures at the FATF, exchanging and sharing of information constantly with foreign bankers associations or the like, making responses to the FATF's mutual evaluations of Japan, and so forth. As an example of the JBA playing a leading part in the efforts of the banking industry, is that it incorporated provisions on compliance including money laundering prevention and confrontation with anti-social forces into the JBA "Code of Conduct," (revised in November, 2005), and prompted its members to put such into practice.
## 2 Efforts of Shinkin Banks(Credit Unions)

As for the credit union industry, in 1997 the National Association of Shinkin Banks established the Shinkin Banks Ethics Program (re-named the Shinkin Banks Action Program in 2005), the goal of which is the "elimination of anti-social forces", representing efforts to observe laws and ordinances related to the Act on Prevention of Transfer of Criminal Proceeds and to eliminate transactions made by Boryokudan and other anti-social forces.

On the issue of countermeasures against money laundering, the Association has compiled and disseminated a guidebook entitled “Preventing Financial Crimes and Issues at the Teller’s Window.” The guidebook is designed as study material, providing correct knowledge for tellers on how to verify customer identity and report suspicious transactions based on the Act.

In addition, regarding the preparation of exclusionary clauses on the Boryokudan in relevant sectors, the Association has concluded various agreements incorporating such clauses as those on financial trading and deposit transactions. Cooperative financial institutions have also taken up an independent initiative in 2012 to partially revise their Articles of Incorporation to eliminate any anti-social activity from capital contributing members. The majority of Shinkin Banks has altered their Articles of Incorporation to accommodate these developments.

## 3 Efforts of Credit Cooperatives

In Japan, all credit cooperatives are members of the National Central Society of Credit Cooperatives. To ensure that countermeasures against money laundering and terrorist financing amongst member cooperatives are implemented, the Society compiles and gives examples of how to verify customer identity and how to handle suspicious transaction reports, and also informs members of these procedures by holding briefing sessions and training sessions. Furthermore, the Society compiles posters and leaflets to inform members about the customer due diligence procedure, distributing these to member cooperatives. The Society also takes thorough steps against money laundering and terrorist financing and on information sharing within the credit cooperative industry, for example by informing member cooperatives of parties subject to asset freezing as part of countermeasures against terrorist financing.

## 4 Efforts of Life Insurance Industry

The Life Insurance Association of Japan, of which domestic life insurance companies in Japan are members, works to achieve appropriate operations amongst its member companies by incorporating countermeasures against money laundering and terrorist financing as well as measures to cope with anti-social forces in its Code of Conduct. The Association has compiled the “Countermeasures Against Money Laundering and Terrorist Financing Handbook” and the “Countermeasures Against Money Laundering and Terrorist Financing FAQs” for both executives and regular employees, thereby assisting member companies in their efforts. In addition, the Association also devises posters and posts important points pertaining to the subject on its website.