Status of Country Antinarcotics efforts in Japan are hampered by the reluctance of prosecutors to use evidence obtained through investigative tools such as legally authorized wiretaps and long-term undercover operations. Recent changes in legislation, however, now permit authorities to conduct controlled deliveries of firearms and narcotics, and Japanese authorities enjoyed some successes in 1996. Primarily because domestic demand is relatively low, Japan is unlikely to become a significant country for the production of, or trafficking in, narcotics. Japan nonetheless is Asia's largest consumer of methamphetamines, and Japan's efforts in international drug control fora often focus on this problem. Legislation has existed since 1992 to tighten controls on money laundering, organized crime, and precursor chemicals, but those laws have not been extensively employed.
Japan is suspected of being a major money laundering center.
Its banking institutions are among the most secretive in the world, and the reporting of suspicious transactions by financial institutions is voluntary. Currency transportation reporting requirements are viewed by the GOJ as a foreign exchange control mechanism, rather than a mechanism to prevent money laundering. Although this represents a criminal violation under Japanese law, Japanese authorities declined to take action. III Country Actions Against Drugs in 1996 Policy Initiatives. In July, the Government of Japan established a central intelligence office on narcotics and smuggling and has improved its intelligence and analysis capabilities.