Silviase/jgov_v1.4_full_ann huggingface dataset:
Table 5-7 Statistics of the application of Provisions of Confiscation and Collection of Equivalent Value under the Anti-Drug Special Provisions Law in general first trials

Year	Confiscation	Collection	Total
Persons	Amount	Persons	Amount	Persons	Amount
2007	53	153,830	285	1,128,689	338	1,282,519
2008	61	93,695	362	1,391,545	423	1,485,240
2009	68	34,087	350	1,428,732	418	1,462,820
2010	46	27,660	328	1,260,916	374	1,288,576
2011	69	21,277	273	850,882	342	872,160

Note 1: Data is based on the White Paper on Crime.

Note 2: Units are yen in thousands (amounts less than one thousand yen are rounded down).

Note 3: When Confiscations and Collections of Equivalent Value were ordered in duplicate for accomplices, the amount was calculated excluding the duplicate amount.

Note 4: Foreign currencies were exchanged into Japanese yen at the exchange rate of the date of the ruling.

## Section 5 Concealment of Cross-Border Capital Movements

By moving funds between bank accounts of several different financial institutions, offenders create the appearance that capital obtained by illicit means was obtained fairly. It is common practice for criminals to take steps across borders to conceal the true origin of funds and the true owner.
## 【Case 18】Loss hiding scheme by a leading domestic company

[Case 18] Loss hiding scheme by a Management of a leading domestic company hid huge losses incurred in the company's management of securities. To avoid bankruptcy and responsibility on the part of management, the company processed loss-bearing financial instruments off the books overseas as fictitious goodwill. The purpose was to hide these huge losses. Arrests were made on violations of the Financial Instruments and Exchange Act.

To transfer the securities with unrealized losses to a loss-hiding fund overseas, the company utilized several different routes to transfer the funds overseas. With the funds collected in this manner, the company created a loss-hiding scheme where the securities with unrealized losses were purchased and the loss transferred to a loss-hiding fund. In the end, the losses were concealed by high-priced corporate buyouts. (the Metropolitan Police Department in February)

## [Case 19] Fraud by an Investment Advisory Company

The president and other executives of an investment advisory company managing funds under discretionary investment contracts with several corporate retirement funds hid various losses incurred in operation. These executives were arrested on fraud charges, specifically for defrauding new customers into believing that their business operations were sound and generating funds thereby.

The company established trust bank contracts between fund management companies under their umbrella organization and oversees banks, creating a structure where the funds would be difficult for Japanese authorities to trace by sending funds generated through this scheme overseas, and further by moving the funds to highly secret bank accounts overseas. This scheme hid the firm’s management issues completely.

(the Metropolitan Police Department in June)
# Promotion of International Cooperation

Economy and financial services are becoming more widely globalized today, and money transfers can be made instantly across borders. There are a number of cases in which criminal and terrorist organizations attempt to evade law enforcement authorities' investigations by transferring criminal proceeds to foreign countries, or financing terrorists through third-party nations.

Non-cooperative jurisdictions, or those taking insufficient AML/CFT measures are likely to be misused as loopholes for money laundering or terrorist financing. Taking these situations into consideration, it is essential for relevant authorities in each jurisdiction to cooperate closely with each other and it is also important for all jurisdictions, based on the latest modus operandi of money laundering and terrorist financing, to take necessary and sufficient measures all together with a view to detecting money laundering and terrorist financing by tracing accurately the transfer of criminal proceeds across borders, and to preventing the abuse of international financial system by criminal organizations for money laundering and terrorist financing.

Therefore, measures against money laundering and terrorist financing have been taken by various international institutions including FATF.

Since the inception of the Japan Financial Intelligence Office (JAFIO), Japan FIU has actively participated in the discussions at FATF and other international institutions.

JAFIC, which is a Japan’s second FIU and was established in April 2007, is expected to seek to collaborate even more vigorously with other countries in promoting implementations of global and effective AML/CFT measures.

## Section 1 Activities of International Institutions

## Paragraph 1 FATF

## 1 FATE

FATF is an intergovernmental body established following the “Economic Declaration” of the 1989 Arche Summit Communiqué to promote international cooperation on AML measures. After the September 11th US terrorist attacks of 2001, FATF has also taken the initiative
in the promotion of international CFT measures.

FATF has 34 member jurisdictions (including Japan) and 2 international institutions as of December 2012.

## 2 Activities

## (1) Main Activities

1. Formulation and review of international standards in the “FATF Recommendations” concerning AML/CFT measures

2. Monitoring the status of compliance with the FATF Recommendations in FATF member jurisdictions (Mutual Evaluations)

3. Promotion of compliance with the FATF Recommendations to non-member jurisdictions

4. Study on trends and modus operandi of money laundering and terrorist financing

## (2) FATF Recommendations

a) FATF 40 Recommendations

In 1990, FATF devised standards in “the 40 Recommendations”, to be applied by each jurisdiction in the field of law enforcement, criminal justice, and financial regulations. In 1996, FATF revised the Recommendations to make the Suspicious Transaction Report obligatory, and for other matters.

In June 2003, FATF revised its recommendations to counter increasing sophistication and complexity of money laundering.

The “40 Recommendations” contained following additional elements (see Figure 6-1).

○Clear definition and expansion of scope of money laundering offense

O $ ^{ Undertaking customer due diligence including customer identification } $

Measures to prevent unlawful use of legal persons in relation to ML

○Application of preventive measures to designated non-financial businesses (real estate agents, dealers in precious metals and stones) and professions (lawyers, accountants and other professions)

○National and international cooperation among FIUs, supervisory authorities, law enforcement authorities and other governmental organizations handling issues related to money laundering

## b) FATF 9 Special Recommendations

In October 2001, a month after the September 11th US terrorist attacks, FATF held an Emergency Session. The agreement of the session was reflected in “the Special Recommendations.” Since FATF added a new recommendation on “cash couriers” to this in October 2004, it is now called “the 9 Special Recommendations on Terrorist Financing.” Main components of the 9 Special Recommendations are as follows (See Table 6-1):

○Criminalization of the financing of terrorism

○Requiring suspicious transaction reporting related to terrorism

○Requiring financial institutions to include accurate and meaningful originator information (name, address and account number) on fund transfers etc.
c) The new “40 Recommendations”

FATF had considered revision of its 40 Recommendations and 9 Special Recommendations in preparation for its fourth Mutual Evaluation, and integrated these two Recommendations into its new "40 Recommendations" in February 2012.

The major points which are newly included to the new “40 Recommendations” are summarized as follows (see Table 6-2).

○Enhancing a risk-based approach

○Boosting transparency of corporations, entrustment, and wire transfer systems

○Enhancing capacity of the relevant administrative authorities and bolstering a system of international cooperation on countermeasures against money laundering and terrorist financing

## (3) Mutual Evaluation

FATF employs a peer review approach to encourage its members to implement the Recommendations. Member jurisdictions are evaluated by other members from various viewpoints such as law, regulation or control regime for anti-money laundering and terrorist financing, and investigation of money laundering crime.

## 3 Mutual Evaluation of Japan

In addition to Mutual Evaluations conducted by FATF in 1994 and 1998, more recently a third Review was implemented over the latter half of 2007 through the latter half of 2008. JAFIC worked together with related government agencies on the Reviews.

## (1) Implementation of the Third FATF Mutual Evaluation of Japan

The main process and procedure of the FATF Mutual Evaluation of assessed countries are as follows:

1. Response to the Mutual Evaluation Questionnaire (MEQ),

2. On-site visit to directly confirm the actual status of countries subject to assessment by assessors.

3. Discussion at the FATF Plenary Meeting.

Japan provided the response to the MEQ in January 2008, and underwent on-site visit in Tokyo and Osaka in March of the same year. In October 2008, at the Plenary Meeting in Brazil, the third round of Mutual Evaluation of Japan was concluded.

## (2) Outline of the Mutual Evaluation Results

For each of 40 Recommendations and 9 Special Recommendations, there are four possible levels of compliance; namely, C (Compliant), LC (Largely Compliant), PC (Partially Compliant) and NC (Non-Compliant). As the results of Mutual Evaluation of Japan are shown in Table 6-1, C was received for 4 recommendations, LC for 19, PC for 15, and NC for 10 (Furthermore, Japan has one recommendation that did not apply (N/A)).

As for the recommendation regarding the FIU (Recommendation 26), the need to further strengthen human resource was pointed out, while the transfer of FIU functions from the Financial Services Agency to the National Public Safety Commission/the National Police Agency was positively evaluated (Rating: LC).
As for the recommendation regarding customer due diligence by financial institutions (Recommendation 5), assessors pointed out that the measures such as verification of beneficial owner and purpose of transaction, and ongoing customer due diligence, should be directly regulated by law or the like, and the additional customer identification methods should be introduced in case of identifying a customer without a photo ID (Rating: NC) (see Figure 6-1).

Since the results of every evaluation are to be published, the results of the third round of Mutual Evaluation of Japan are also published on the FATF website (http://www.fatf-gafi.org/) and the Ministry of Finance website (http://www.mof.go.jp/international_policy/convention/fatf/fatfhoudou_201030.htm).

## (3) Follow-up of the Mutual Evaluation Results

## a) Follow-up Procedures

In the context of the procedures regulated by FATF, those countries subject to assessment, which have received at least one PC or NC in the core recommendations (Recommendations 1, 5, 10, and 13 and Special Recommendations II and IV) are subject to follow-up, and they must periodically report the progress of improvement and overall statistics at Plenary Meetings.

And in the case where the Plenary agrees that the assessed counties have implemented 16 Recommendations (in addition to 6 core Recommendations, Recommendation 3, 4, 23, 26, 35, 36, 40 and Special Recommendation I, III, V) at a level essentially equivalent to a C or LC, the countries will be removed from the follow-up process. Countries subject to assessment are encouraged to make necessary improvements and to seek removal from the follow-up process within three years after the adoption of Mutual Evaluation.

## b) Report on Improvement

Regular Follow up procedures apply to Japan under Recommendation 5 rated NC and Special Recommendation II rated PC. Since the Mutual Evaluation, Japan has been actively making efforts to remedy the deficiencies identified in the Mutual Evaluation by, for instance, holding “the Related Ministry Liaison Conference regarding Implementation of FATF Recommendations”.

Especially with regard to customer due diligence which was rated NC, the Act to Partially Amend the Act on Prevention of Transfer of Criminal Proceeds was promulgated on April 28, 2011, and the legislative order pertaining to the law promulgated on March 26, 2012, enabling the verification of the purpose of transactions and beneficial owner. Based mainly on the above, improvement reports were made at FATF Plenary Meetings on the following four occasions: October 2010, October 2011, June 2012, and October 2012. A report will also be released on Japan's progress in the areas pointed out.

## 4 Participation of JAFIC

As one of the founding members of FATF, Japan has been a very active contributor to its work since its establishment in 1989. Japan had participated in tri-annual Plenary Meetings
and working groups which conduct analysis of money laundering typologies, and chaired the plenary between July 1998 and June 1999. Even after the functions of FIU were transferred to JAFIC, JAFIC has continued to actively participate in the discussion for new frameworks of AML/CTF measures and send staff members to the Plenary and working group meetings held every year.

FATF Plenary Meeting
Table 6-1 Overview of the “40 Recommendations” and “9 Special Recommendations,” and Results of the Third FATF Mutual Evaluation of Japan

Recommendation	Outline of Recommendation	Rating	Recommendation	Outline of Recommendation	Rating
40 Recommendations	25	Guideline & feedback	LC
1	Money laundering offence	LC	26	FIU	LC
2	Money laundering offence - mental element and corporate liability	LC	27	Investigation for money laundering and terrorist financing	LC
3	Confiscation and provisional measures	LC	28	Power of competent authorities	C
4	Secrecy laws consistent with the Recommendations	C	29	Supervisory authorities	LC
5	Customer due diligence (financial institutions)	NC	30	Resources, integrity and training	LC
6	Individuals who are or have been entrusted with prominent public function in a foreign country	NC	31	National cooperation	LC
32	Statistics	LC
7	Correspondent banking	NC	33	Legal person-beneficial owners	NC
8	Misuse of new technologies & non face-to-face business	PC	34	Legal arrangements (trust) - beneficial owners	NC
9	Rely on third parties and introducers for Customer due diligence	N/A	35	Convention	PC
10	Obligation to maintain records of customer identification and transaction record	LC	36	Mutual legal assistance	PC
11	Obligation to pay special attention for unusual transaction	PC	37	Dual criminality	PC
12	Customer due diligence by DNFBP (designated non-financial businesses and professions)	NC	38	Mutual legal assistance on confiscation and freezing	LC
13	Suspicious Transaction Report by financial institutions(STRs)	LC	39	Extradition	PC
14	Obligation to protect reporter	LC	40	International cooperation (information exchange with foreign counterparts)	LC
15	Obligation to maintain internal controls	NC	9 Special Recommendations
16	Suspicious Transaction Report by DNFBP	PC	I	Implement United Nation instruments	PC
17	Sanction for non-compliance	LC	II	Criminalise terrorist financing	PC
18	Shell bank (bank incorporated in a jurisdiction in which it has no physical presence)	PC	III	Freeze and confiscate terrorist assets	PC
19	Other forms of reporting	C	IV	Suspicious transaction reporting related to terrorism	LC
20	Other DNFBP & secure transaction technique	C	V	International cooperation for terrorism	PC
21	Special attention for higher risk countries	NC	VI	Money/value transfer services	PC
22	Foreign branches & subsidiaries	NC	VII	Wire transfer rules	LC
23	Supervisory obligation for financial institutions	LC	VIII	Non profit organization (NPO)	PC
24	SSupervisory obligation for DNFBP	PC	IX	Cross border declaration & disclosure (Cash courier)	NC

Note: Evaluation levels are as follows:

C: Compliant, LC: Largely Compliant, PC: Partially Compliant,

NC: Non-compliant, N/A: Not applicable.
Table 6-2 Overview of the New “40 Recommendations”

New Recommendation	Old Recommendation	Outline of Recommendation	New Recommendation	Old Recommendation	Outline of Recommendation
1	—	Assessing risks & applying a risk-based approach	21	14	Tipping-off and confidentiality
2	31	National cooperation and coordination	22	12	DNFBPs: Customer due diligence
3	12	Money laundering offence	23	16	DNFBPs: Other measures
4	3	Confiscation and provisional measures	24	33	Transparency and beneficial ownership of legal persons
5	II	Terrorist financing offence	25	34	Transparency and beneficial ownership of legal arrangements
6	III	Targeted financial sanctions related to terrorism & terrorist financing	26	23	Regulation and supervision of financial institutions
7	—	Targeted financial sanctions related to proliferation	27	29	Powers of supervisors
8	VIII	Non profit organisations (NPO)	28	24	Regulation and supervision of DNFBPs
9	4	Financial institution secrecy laws	29	26	Financial intelligence units
10	5	Customer due diligence	30	27	Responsibilities of law enforcement and investigative authorities
11	10	Record keeping	31	28	Powers of law enforcement and investigative authorities
12	6	Politically exposed persons	32	IX	Cash couriers
13	7	Correspondent banking	33	32	Statistics
14	VI	Money or value transfer services	34	25	Guidance and feedback
15	8	New technologies	35	17	Sanctions
16	VII	Wire transfers	36	35	International instruments
17	9	Reliance on third parties	37	36	Mutual legal assistance
18	15	Internal controls and foreign branches and subsidiaries	38	38	Mutual legal assistance: freezing and confiscation
19	21	Higher-risk countries	39	39	Extradition
20	13	Reporting of suspicious transactions	40	40	International cooperation (information exchange with foreign counterparts)

Note: "New Recommendation" refers to the New "40 Recommendations," while "Old Recommendations" indicates the numbers of the old "40 Recommendations" and the "9 Special Recommendations." The Arabian numbers under the "Old Recommendations" refer to the "40 Recommendations," while the Greek numbers are the Recommendation numbers for the "9 Special Recommendations." "–" indicates a new Recommendations.

## Paragraph 2 APG

## 1 APG

APG (Asia/Pacific Group on Money Laundering) is an international cooperative body whose establishment was decided in February 1997 at the FATF 4th Asia/Pacific Money Laundering Symposium held in Thailand to promote anti-money laundering measures in non-FATF member jurisdictions in the Asia/Pacific region.

As of the end of December 2012, the APG consists of 41 jurisdictions, including Japan.
## 2 Activities

The main activities of APG are as follows.

1. Promotion of compliance with the FATF Recommendations in the Asia/Pacific region

2. Promotion of legislation on AML/CFT in the APG member jurisdictions

3. Mutual Evaluations on APG member jurisdictions

4. Information exchange and analysis on the trend of money laundering in the Asia/Pacific region

## 3 Participation of JAFIC

Japan is one of the founding members of APG and has been actively contributing to the activities of APG, much as it has with FATF. For example, the first Plenary Meeting and second typology meeting were both held in Tokyo in March 1998 and March 1999 respectively and Japan took the role of cochair with Australia between July 2004 and June 2006. This approach has not been changed even after the functions of FIU were transferred to JAFIC. Since its establishment, JAFIC has continued to send staff members to the Plenary

APG Typology Meeting(Vietnam)

Meeting and the typology meetings to participate in the study on the best practice of information analysis conducted by FIUs and on the latest modus operandi and trend of money laundering.

## Paragraph 3 Egmont Group

## 1 Egmont Group

The Egmont Group is an international forum established mainly by FIUs of several European nations and the United States in April 1995 with the goal of promoting cooperation on information exchange, trainings and expertise between FIUs around the world engaging in AML measures. The group is named after the Egmont castle in Belgium where the first plenary session was held. Although the Egmont Group was established as an informal forum at the beginning, it has become an internationally recognized official body at present, through the adoption of the Egmont Group Charter at the May 2007 annual plenary in Bermuda and the establishment of its permanent Secretariat in Toronto, Canada. The Egmont Group consists of FIUs of 131 jurisdictions as of the end of December 2012.

## 2 Activities of the Egmont Group

In addition to the annual Plenary Meeting which representatives from all member FIUs attend, the Egmont Group has the following working groups, which are held twice a year.
1. The Legal Working Group (LWG) reviews the candidacy of potential members and handles all legal aspects and matters of principle within Egmont members.

2. The Outreach Working Group (OWG), works to create a global network of FIUs by identifying candidates for membership and working with those countries to ensure that they meet international standards

3. The Training Working Group (TWG) develops training methods for FIU personnel, and conducts training seminars for Egmont members as well as for non-Egmont jurisdictions.

4. The Operational Working Group (OpWG) seeks to bring FlUs together on typologies development and long-term strategic analytical project.

5. The IT Working Group (ITWG) provides advice and research analysis support software for IT systems of the new and existing FIUs.

## 3 Participation of JAFIC

Upon establishing JAFIO in February 2000 within the Financial Supervisory Agency (later the Financial Services Agency) as a Japanese version of FIU, Japan applied for membership in the Egmont Group, and was granted it in May 2000 at the 8th annual plenary held in Panama.

Since then, JAFIO had actively participated in the activities of the Egmont Group. It sent staff members to working group meetings and the Plenary

Egmont Group Meeting (Russia)

Meetings, and took part in the drafting of the Egmont Group Charter. JAFIO also undertook the role of sponsor FIU (in co-sponsorship with the Thailand FIU) in the application procedures for Myanmar FIU, which is currently not yet an Egmont Group member.

JAFIC, which took over the functions of Japan FIU from JAFIO in April 2007, was granted the Egmont Group membership as the new Japan FIU at the 15th Plenary Meeting held in Bermuda in May 2007.

After joining the Egmont Group, JAFIC has sent its members to both the annual meetings and working groups to participate in the discussions on the principles related to information exchange between FIUs and other matters.

Moreover, JAFIC has taken over the role of sponsor FIU for the FIU of Myanmar in the application procedures into the Egmont Group from JAFIO and accepted the role of sponsor FIU for Pakistan FIU (in co-sponsorship with the U.S. FIU) at the request of the Egmont Group in 2011.