Silviase/jgov_v1.4_full_ann huggingface dataset:
(6) Promotion of international cooperation

The National Police Agency should take initiative in the areas of, for example, inter-FlU information exchange, compliance with the FATF Recommendations, and support the global compliance in an effort to enhance international cooperation on AML/CFT.

### 3. Confidentiality

Necessary and appropriate measures have to be taken to ensure confidentiality and prevent any leakage with regard to any use of STR information in any phase of their duties.

Figure 1-4 Overview of the Guideline for Promotion of the Criminal Proceeds Control

Guideline for Promotion of the Criminal Proceeds Control

National Police Agency

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

Collection, arrangement and analysis of information on criminal proceeds

Examination of the actual situation of criminal organizations

Promotion of International coordination and cooperation

Ensuring confidentiality and information security

Dissemination of information and investigative instruction / coordination

Report of information necessary for promoting countermeasures against criminal proceeds

## Prefectural Police

Establishment of Task Force for fact-finding concerning criminal proceeds

Development of investigative structure for crimes related to criminal proceeds

Promotion of investigation utilizing STRs

PR and enlightenment activities

Collection of information for promoting countermeasures against criminal proceeds

Appropriate implementation of measures to confiscate criminal proceeds

Ensuring confidentiality and information security
## Chapter 2

## Legislative Regime on AML/CFT

AML/CFT regime in Japan has been developed since the 1980s, in order to achieve the following three objectives:

(1) Imposing CDD and other necessary obligations on financial institutions and DNFBPs (collectively referred to as “specified business operators”)

(2) Criminalization of money laundering

## (3) Confiscation of criminal proceeds

Of these, (1) is for deterring money laundering by facilitating the tracing of criminal proceeds when they are transferred and making it difficult to avoid prosecution or confiscation, while (2) and (3) are primarily targeting criminal organizations to root out their sources of fund. (1) is realized mainly by the Act on Prevention of Transfer of Criminal Proceeds, while (2) and (3) are realized by the Act on Punishment of Organized Crimes and the Anti-Drug Special Provisions Law.

Figure 2-1 Relationships of the Act on Prevention of Transfer of Criminal Proceeds, the Act on Punishment of Organized Crimes, and the Anti-Drug Special Provisions Law
# Section 1 Outline of the Act on Prevention of Transfer of Criminal Proceeds

The Act on Prevention of Transfer of Criminal Proceeds was created based on the two laws; the amended Customer Identification Act and a portion of the Act on Punishment of Organized Crimes in order to address changes in money laundering trends more effectively and comprehensively in a way consistent with global standards set out by the FATF 40 Recommendations in 2003.

The Act provides for preventive measures in combating ML/TF, by imposing obligations on specified business operators to perform CDD, record keeping, filing STRs, etc. In 2011, the following amendments were made to the Act: addition of verifying details for transactions; addition of telephone forwarding service providers to the list of specified business operators; addition of measures for appropriate verification at the time of transactions; and increased punishments on illicit transfer of passbooks, etc. The amended Act was fully enforced on April 1, 2013.

In addition, in 2014, a legal amendment was made to include provisions for clarification of the determination method of suspicious transactions, enhanced verification at the time of the conclusion of correspondence contracts and expansion of the obligation for specified business operators to make efforts to develop internal policies, procedures and controls, etc. and this amendment was fully enforced on October 1, 2016.

### 1. Purpose of the Act (Article 1)

The purpose of the 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 a specified business operator, as described in 3 below, 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 the 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)

Any financial institution or DNFBP which falls under the Act and thus is required to perform CDD and other obligations, should be called “Specified business operators,” whose designation would occur in line with the FATF standards and also the domestic business context.
Figure 2-2 Overview of the Act on Prevention of Transfer of Criminal Proceeds

※ 1 Amongst financial institutions etc., those operators involved in foreign exchange are required to provide notification on money remitters in addition to the above.

$ ^{*} $ 2 Professions such as judicial scriveners, certified administrative procedure specialists, certified public accountants, and certified tax accountants are required to verify the information in ①only.

$ ^{*} $ 3 The Japan Federation of Bar Associations defines, in its bylaws, measures to ensure accurate verification on transactions, and preparation/preservation of verification records and transaction records by lawyers. These rules are based on examples of judicial scriveners and other professions contained in the Act on Prevention of Transfer of Criminal Proceeds.

## Specified business operators

○Financial institutions (items 1 through 37):

Bank (item 1); Shinkin bank (item 2); Federation of Shinkin banks (item 3); Labor bank (item 4); Federation of labor banks (item 5); Credit cooperative (item 6); Federation of credit cooperatives (item 7); Agricultural cooperative (item 8); Federation of agricultural cooperatives (item 9); Fishery cooperative (item 10); Federation of fishery cooperatives (item 11); Fishery processing cooperative (item 12); Federation of fishery processing cooperatives (item 13); Norinchukin Bank (item 14); Shokochukin Bank (item 15); Development Bank of Japan (item 16); Insurance company (item 17); Foreign insurance company, etc. (item 18); Small-claims/short term insurance business operator (item 19); Federation of fishery cooperatives for mutual aid (item 20); Financial instruments business (item 21); Securities finance company (item 22); Specially permitted business notifying person (item 23); Trust company (item 24); Self-trusteed company
(item 25); Real estate specified joint enterprise operator, Small-scale real estate specified joint enterprise operator, special business operator or Qualified specially permitted investor limited business operator (item 26); Mutual loan company (item 27); Money lender (item 28); Call money market broker (item 29); Fund transfer company (item 30); Virtual currency exchange service provider (item 31); Futures commission merchant (item 32); Book-entry transfer institution (item 33); Account management institution (item 34); Electronic receivables recording organization (item 35); Management Organization for Postal Savings and Postal Life Insurance (item 36); Currency exchanging operator (item 37)

○Financial leasing operator (item 38)

○Credit card operator (item 39)

○Real estate agents (item 40)

○Dealers in precious metals and stones (item 41)

○Postal receiving service providers, telephone receiving service, providers and telephone forwarding service providers (item 42)

○Lawyer or legal profession corporation (item 43)

○Judicial scrivener or judicial scrivener corporation (item 44)

○Certified administrative procedures specialists or administrative scrivener corporation (item 45)

○Certified public accountant or audit firm (item 46)

○Certified public tax accountants or certified tax accountant corporation (item 47)

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

The 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 support including the provision of information on the modus operandi; 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.

In addition, the National Public Safety Commission is required each year to investigate and analyze the status of transfer of criminal proceeds, including modus operandi related to the transfer, and compile and publish NRA, which describes the investigation and analysis results, including the risk level of transfer of criminal proceeds by type of transaction conducted by specified business operators and other business operators.

### 5. Measures by Specified Business Operators

The measures which specified business operators (excluding lawyers; the same shall apply in this section except for 5(7) and Table 2-1) are obligated to implement and the measures
the time of transactions, patterns and natures of transactions and other circumstances.

(Note) Methods, etc. of verification whether there is a suspicion of ML through comparison of the nature of transactions with those of usual transactions, comparison with past transactions with the same customer, and checking of the consistency with the content verified at the time of transactions, etc.

(5) Enhanced verification at the time of the conclusion of correspondence contracts (Article 9)

When concluding a correspondent banking contract $ ^{1} $ under which exchange transactions with an exchange business operator located abroad are conducted continuously or repeatedly, specified business operators who conduct exchange transactions on a regular basis are required to verify that the foreign exchange business operator located abroad has developed a system necessary for appropriately implementing a measure equivalent to verification at the time of transactions.

## (6) Notification pertaining to foreign exchange transactions (Article 10)

In making wire transfers to other countries, specified business operators conducting exchange transactions on a regular basis are required to notify the receiving exchange transaction business operator located abroad of certain items, such as the customer's name and account number.

(7) Measures to ensure thorough and effective CDD measures to be taken (Article 11)

Specified business operators are required to endeavor to take measures to keep information up-to-date concerning matters for which verification at the time of transactions has been conducted, formulate rules concerning the implementation of such measures as verification at the time of transactions, etc. and appoint a person in charge of supervising business affairs, etc.

## (8) Measures for verification of customer identification data by lawyers (Article 12)

It is established by special provision, that lawyers shall conduct measures relevant to those described in (1) through (3) and (7) above based on The Rule of the Japan Federation of Bar Associations in line with cases of judicial scrivener.

The CDD regime in which measures as described in (1) through (3) above are undertaken is intended to make the financial or other services less attractive to those who try to use them for money laundering or any other illicit purposes and to ensure traceability of illicit funds. Meanwhile, the STR regime as described in (4) in which reported information will be used for investigations into money laundering and/or predicate offences, is also intended to protect the financial system from misuse to ensure its soundness. Measures (as noted in (7)) are intended to ensure accuracy of the customer identification process during transactions, making the process more efficient. These measures are expected to help specified business operators to be aware of ML/TF risks more comprehensively and efficiently.

The purpose of notification pertaining to enhanced verification at the time of the conclusion of correspondence contracts and foreign exchange transactions described in (5)
and (6) is to make the financial or other services less attractive to those who try to use them for international money laundering and also to ensure international traceability of illicit funds.

Table 2-1 【Measures that Must be Implemented by Specified Business Operators under the Act】

Mandatory measures	Verification at the time of transaction [Article 4]	Preparation and preservation of verification records [Article 6]	Preparation and preservation of transaction records etc. [Article 7]	Reporting of suspicious transactions [Article 8]	Enhanced verification at the time of the conclusion of correspondence contracts [Article 9]	Notification per-training to foreign exchange transactions [Article 10]	Measures to ensure thorough and effective CDD measures to be taken [Article 11]
Financial institutions (items 1 through 37)	○	○	○	○	○	○	○
Financial leasing operators (item 38)
Credit card operators (item 39)
Real estate agents (item 40)
Dealers in precious metals and stones (item 41)
Postal receiving service providers (item 42)
Telephone receiving service providers (item 42)
Telephone forwarding service providers (item 42)
Judicial scriveners (item 44)	○ (Only identification data)	×	×	×
Certified administrative procedures specialists (item 45)
Certified public accountants (item 46)
Certified public tax accountants (item 47)
Lawyers (item 43)	As prescribed by the bylaws set by the Japan Federation of Bar Associations based on examples of judicial scriveners, etc. (Article 12).	As prescribed by the bylaws set by the Japan Federation of Bar Associations based on examples of judicial scriveners, etc. (Article 12)
Figure 2-3 Methods of Verification at the Time of Transaction

## Methods of Verification at the Time of Transaction

### For Non Face-to-Face Transactions (Website, Mailing Service, etc.)

Presentation of a certificate of registered matters of the corporation, seal registration certificate, etc.

Declaration of purpose and intended nature for transaction

Presentation of articles of association or other documents showing business description

Declaration of customer identification items when there are beneficial owners

### For Non Face-to-Face Transactions (Website, Mailing Service, etc.)

Submission of customer identification documents such as a certificate of registered matters of the corporation, seal registration certificate, etc., or their copies

Declaration of purpose and intended nature for transaction

Submission of articles of association or other documents, or their copies, showing business description

Declaration of customer identification items when there are beneficial owners

Submission by customers of electronic certificates prepared by a registrar in accordance with the Commercial Registration Act and information on transactions for which electronic signatures were used

Declaration of purpose of transactions

Verification of articles of association or other documents showing business description

Declaration of customer identification items when there are beneficial owners

Presentation of a certificate of the person in charge of the actual transaction

## Sending of personal

charge of the actual

transaction or their copies.

Sending of documents related to the transaction to both addresses, which do not need forwarding, written on the personal identification document of the corporation and the person in charge of the actual transaction, by registered mail.

Verification of the person in charge of the actual transaction

Although transactions requiring verification of personal identification (when engaging in a transaction) cannot be carried out without such residence confirmation in principal, transactions for foreign money exchange, sale or purchase of jewelry, precious metals, etc., are possible upon customer identity verification, i.e. by presenting a passport or crewman's pocket-ledger describing nationality and passport number, in addition to name and birth date.

※ If a stamp of permission of landing certifies that the duration of stay does not exceed 90 days, this corresponds to the fact that the person does not have residence in Japan.

For transactions that carry a high risk of money laundering, verification of transaction purpose and intended nature must be carried out with stricter criteria. And, for transactions of over $ \backslash2 $ million, verifications of assets and income are also required.
### 6. Dissemination of STR Information (Articles 13 and 14)

In order to make use of STR information for investigations conducted domestically or internationally JAFIC may disseminate such information to public prosecutors, assistant officers to prosecutors, judicial police officials (police officers, narcotics control agents and coast guards, etc.), relevant officials of the National Tax Agency, regional taxation bureaus or tax offices, customs officers, personnel of the Securities and Exchange Surveillance Commission (SESC) and other related investigators. JAFIC would also disclose STR information to foreign FlUs concerned based on the agreed terms of conditions.

### 7. Supervision (Articles 15 to 19, 25, 26 and 31)

The Act provides for a supervisory regime undertaken by competent administrative authorities in order to ensure the compliance of specified business operators. For this purpose, the supervising authorities would exercise a supervisory power by conducting on or off-sight inspection of the regulated businesses or issuing a rectification order for non-compliance as necessary.

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.

Importantly, to complement the supervision by the regulating authorities, JAFIC is authorized to advise the supervising authorities over whether appropriate actions should be taken against a specific specified business operator based on the fact of JAFIC detecting non-compliance. For the purpose of this duty, it is also granted a power of inspection of a specified business operator in doubt.

### 8. Penal Provisions regarding Receipt/Delivery/Provision of Deposit/Savings Passbooks and Exchange Transaction Cards (Articles 28 to 30)

For years it had been a significant challenge to take actions against traded deposit/savings passbooks, ATM cards or Exchange Transaction Cards which were exposed to exploitation for the purpose of money laundering or any proceed-related crimes. In order to prevent this, the Act prohibits anyone to give or take a deposit/savings passbook as a subject of transaction no matter whether or not it is for value with a penalty of imprisonment with labor for not more than one year or a fine of not more than one million yen or both. Specifically, when such transaction is conducted as a business of any parties concerned, the penalty would be aggravated to imprisonment with work for not more than three years or a fine of not more than five million yen or both.

Furthermore, it is also prohibited that anyone invites or solicits another party to assign, deliver or provide a deposit/savings passbook no matter whether or not it is for value, resulting in a punishment of imprisonment with labor for not more than one year or a fine of not more than one million yen or both.
## Section 2 Outline of the Act on Punishment of Organized Crimes and the Anti-Drug Special Provisions Law

## Paragraph 1 The Act on Punishment of Organized Crimes

The Act on Punishment of Organized Crimes was enacted in response to the introduction of the requirement for expanding the scope of predicate offences of money laundering to include serious crimes due to the revision of the FATF 40 Recommendations of 1996 and the international agreement reached at the 1998 Birmingham Summit on the establishment of an Flu, and it was put into force in February 2000. In terms of criminal proceeds regulations, this law has expanded the scope of predicate offences of concealment of criminal proceeds, etc. to include certain serious crimes. It also provides for the confiscation and collection of equivalent value of criminal proceeds, etc. Provisions concerning Flu were provided in the Act on Punishment of Organized Crimes before the enforcement of the Act on Prevention of Transfer of Criminal Proceeds.

### 1. Criminalization of Money Laundering (Articles 9 through 11)

## (1) Illegal corporate control management (Article 9)

The Act on Punishment of Organized Crimes criminalizes the act of changing executives, etc. of a legal person as a means to control its business management using illicit proceeds (proceeds from certain crimes, proceeds from certain drug-related criminal proceeds, assets acquired through ownership or disposition of those proceeds and assets including such assets and other assets).

## (2) Concealment of criminal proceeds (Article 10)

The following act are criminalized by this article: (i) The Act of disguising facts with respect to acquisition or disposition of criminal proceeds, (ii) the act of concealing criminal proceeds, (iii) the act of disguising facts with respect to the source of criminal proceeds.

## (3) Receipt of criminal proceeds (Article 11)

The act of knowingly receiving criminal proceeds is criminalized by this article.

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

The system of confiscation and collection of equivalent value provided in the Act on Punishment of Organized Crimes is left to the discretion of the court in principle, like the system provided in the Penal Code. However, it has been strengthened compared with the system of confiscation and collection of equivalent value provided in the Penal Code, in that the scope of items subject to the system has been expanded to include monetary claims and assets obtained as the fruit of criminal proceeds and that securance measures have been established.

Regarding the restraining order for confiscation, one of the securance measures, the court may prohibit — either upon the request of a prosecutor or at based on its own authority —