Source: 2001
Released by the Bureau for International Narcotics and Law Enforcement Affairs
Although Japan is not a major producer of drugs, it is believed to be one of the largest methamphetamine markets in Asia, with approximately 600,000 addicts and 2.18 million casual users nationwide. During 2001, Japanese authorities seized 458.2 kilograms of methamphetamine. Japanese authorities also seized 29,340 tablets of MDMA (ecstasy), the largest seizure of its kind in Japan. Through November, authorities seized over 112,000 tablets. They also reported an increase in the amount of heroin imported from Southeast Asia. Japan is a party to the 1988 UN Drug Convention.
Japan is not, nor is it likely to become, a significant producer of narcotics. The licit cultivation of opium poppies, coca plants, and cannabis for research is strictly monitored and controlled by the Ministry of Health, Labor and Welfare. Methamphetamine is Japan's most widely abused drug. Approximately 90 percent of all drug arrests in Japan continue to involve this substance. In spite of a significant methamphetamine abuse problem, there is no evidence of clandestine manufacturing in Japan. Ephedrine, the primary precursor for the manufacture of methamphetamine, is strictly controlled under Japanese law.
Authorities continue to estimate methamphetamine importation into Japan to be between ten and 20 metric tons per year (based on 2.18 million users consuming 11 grams per person annually). Japanese law enforcement officials have made record methamphetamine seizures in the last three years. Through November 2001, 458.2 kilograms of methamphetamine were seized. Single record seizures of 29,640 ecstasy tablets were also made during 2001. Authorities believe the majority of the methamphetamine smuggled into Japan is refined and/or produced in the PRC, the Philippines, Taiwan, and North Korea.
Methamphetamine trafficking remains a significant source of income for Japanese organized crime, and Japanese law enforcement officials report that the participation of the illegal immigrant population in drug trafficking activity has continued to increase. Japan also remains a transshipment country for the cocaine precursor chemical potassium permanganate to Mexico and South America. According to Japanese law enforcement authorities, importation of heroin from Southeast Asia to Japan increased in the final four months of 2001. However, the DEA's office in Tokyo does not view heroin consumption in Japan to be a significant problem compared to other illegal drugs. The National Police Agency (NPA)_and Japanese Customs also reported a resurgence in use of marijuana and hashish imported into Japan from the Philippines and Thailand in 2001. However, as with heroin, marijuana and hashish use remains minor compared to methamphetamine use in Japan. Hallucinogens are controlled substances in Japan. Neither the possession, distribution, nor the importation of certain hallucinogenic plants is illegal in Japan, but efforts are underway to close this loophole.
Policy Initiatives. In December 2001, the Japanese Diet enacted legislation which outlaws the importation, sale, distribution, and possession of Gamma Hydroxy Butrate (4-methyioamphetamine), aka roffies, rohypnol, or the "date rape drug."
The Ministry of Health, Labor and Welfare also began drafting a new law that would outlaw the importation, distribution, sale, and possession of certain hallucinogenic plants, with the aim of submitting implementing legislation in 2002.
Accomplishments. In December 2001, the United States and Japan held another round of negotiations on a mutual legal assistance treaty. The two sides hope to conclude negotiations on the treaty in 2002. One it enters into force, the treaty is expected to expedite and strengthen law enforcement cooperation.
As an active member of the UNDCP major donors group, Japan provided important financial support to many UNDCP programs. Japan also participated in all major conferences conducted throughout the world that concerned narcotics trafficking in 2001.
Law Enforcement Efforts. While they seized less than the record amounts seized in 1999 and 2000, Japanese authorities seized a large quantity of methamphetamine (458 kilograms) in the first 11 months of 2001. Narcotics enforcement agents also made record seizures of ecstasy (29,640 tablets) in 2001.
Police counternarcotics efforts tend to focus on Japanese organized crime groups, which are the main smugglers and distributors of drugs. However, police and prosecutors have been hesitant to pursue cases in which the likelihood of a conviction is uncertain. In addition to smuggling and distribution activities, law enforcement officials are starting to pay increased attention to drug-related financial crimes. The Financial Services Agency received over 10,000 reports of suspicious transactions in 2001.
Between 1992, when the Asset Seizure Law took effect, and 1999, the NPA has seized a total of about U.S. $7.23 million in drug proceeds in 82 investigations. However, the NPA and Customs advise that seizure statistics are no longer maintained. Japanese authorities seize money primarily as trial evidence. After conviction, judges may order the forfeiture of narcotics-related proceeds, but statistics on these forfeitures are not maintained.
Corruption. Japan has no known drug-related corruption.
Agreements and Treaties. Japan ratified the 1988 UN Drug Convention in 1992. Japan is a party to the 1961 UN Single Convention on Narcotic Drugs, the 1972 Protocol amending the Single Convention, and the 1971 UN Convention on Psychotropic Substances. An extradition treaty and a customs mutual assistance agreement are in force between the U.S. and Japan. The U.S. and Japan completed another round of negotiations on a mutual legal assistance treaty in December, which the two sides hope to conclude in 2002. Japan signed the UN Convention against Transnational Organized Crime in December 2000.
Cultivation/Production. Although Japan is not a significant cultivator or manufacturer of controlled substances, it is a major producer of 60 types of precursor chemicals that have legitimate industrial uses. For example, Japan is one of only a handful of countries that produce ephedrine, a chemical used to create antihistamines. Ephedrine is also an essential ingredient in methamphetamine. Japan is a member of the Chemical Action Task Force (CATF) and controls 28 chemicals. The DEA country attaché in Japan, working closely with his Japanese counterparts, closely monitors end users of precursors.
Drug Flow/Transit. Almost all drugs illicitly trafficked in Japan are smuggled from overseas. According to the NPA, the PRC, the Philippines, Taiwan, and North Korea are principal sources.
Domestic Programs (Demand Reduction). Domestic programs focus primarily on interdiction. Drug treatment programs are small, and are generally run by private organizations. The Japanese government provides narcotics-related counseling designed to prevent drug use and supports the rehabilitation of addicts at prefectural Health Centers and Mental Health and Welfare Centers. Prefectural governments also employ part-time narcotics counselors. The Japanese government continued to support a number of drug awareness campaigns, including the five-year campaign drawn up in 1998 by the Headquarters for the Promotion of Measures to Prevent Drug Abuse, an office headed by the Prime Minister. This program is designed to inform the public about the growing use of stimulants in Japan, especially among junior and senior high school students. Under this plan, the Ministry of Health and Welfare, along with prefectural governments and a variety of private organizations, continued to administer national publicity campaigns using advertisements that run on television, radio, and electronic score boards used at major sporting events. The plan also promotes drug education programs at the community level, including one that organizes talks between students and former narcotics officers, and another poster campaign that targets students attending high school baseball games.
U.S. Policy Initiatives. U.S. goals and objectives include:
Bilateral Cooperation. U.S. and Japanese law enforcement officials continued to cooperate in 2001 to monitor the use of precursor and essential chemicals. However, joint money laundering investigations remain a goal.
The Road Ahead. The United States and Japan will continue to work to conclude negotiations on a mutual legal assistance treaty and to explore new cooperative counternarcotics initiatives.
Japan is an important world financial center. As such, Japan is also a major money laundering center. The principal sources of laundered funds are drug trafficking and financial crimes (illicit gambling, extortion, abuse of legitimate corporate activities, and all types of property related crimes) as well as the proceeds from violent crimes, mostly linked to Japan's criminal organizations, e.g., the boryokudan. The Japanese National Policy Agency estimates that the boryokudan's illegal activities generate annually several billion dollars in proceeds. United States law enforcement reports that drug-related money laundering investigations initiated in the U.S. periodically show a link between drug-related money laundering activities in the U.S. and bank accounts in Japan.
Prior to 1999, Japanese law only criminalized narcotics-related money laundering. The Anti-Drug Special Law, which took effect in July 1992, criminalized drug-related money laundering, mandated suspicious transaction reports for the illicit proceeds of drug offenses, and authorized controlled drug deliveries. This legislation also created a system to confiscate illegal profits gained through drug crimes. The seizure provisions apply to tangible and intangible assets, direct illegal profit, substitute assets, and criminally derived property that have been commingled with legitimate assets. The limited scope of the law and the burden required of law enforcement to prove a direct link between money and assets to specific drug activity severely limited the law's effectiveness. As a result, Japanese police and prosecutors have undertaken few investigations and prosecutions into suspected money laundering.
Pursuant to the 1999 Anti-Organized Crime Law, which came into effect in February 2000, Japan expanded its money laundering law beyond drug trafficking to include money laundering predicates such as murder, aggravated assault, extortion, theft, fraud, and kidnapping. The new law also extended the confiscation laws to include the additional money laundering predicate offenses and to include value-based forfeitures, authorized electronic surveillance of organized crime members, and enhanced the suspicious transaction reporting system.
In response to the terrorist attack on the United States on September 11, 2001 the Financial Services Agency (FSA), which supervises the public-sector financial institutions and securities transactions, used the anti-money laundering framework provided in the newly enacted "Anti-Organized Crime Law," where terrorists' funds stem from crime proceeds, to request financial institutions to report transactions suspected of their connections with such individuals and/or entities as those designated by the Notices as those suspected to have relations with criminal activities. The FSA will classify and analyze information on suspicious transactions reported by financial institutions in relation to crime proceeds, and provide law enforcement authorities with information relevant to their investigation.
To facilitate exchange of information related to suspected money laundering activity, the law established the Japan Financial Intelligence Office (JAFIO) as Japan's financial intelligence unit. Financial institutions in Japan report suspicious transactions to the JAFIO as instances of suspicious transactions are discovered.
Japanese banks and financial institutions are required by national laws to record and report the identity of customers engaged in large currency transactions. There are no secrecy laws that prevent disclosure of client and ownership information to bank supervisors and law enforcement authorities. Under the 1998 Foreign Exchange and Foreign Trade Control Law, banks and other financial institutions must report transfers abroad of five million yen (approximately U.S. $44,579) or more. Domestic laws also require banks and financial institutions to maintain records for an adequate period of time should they be needed to reconstruct significant transactions. This requirement is not specifically narcotics-related.
Japanese financial institutions have cooperated, when requested, with law enforcement agencies, including U.S. and other foreign government agencies investigating financial crimes related to narcotics. Japan has not adopted "due diligence" or "banker negligence" laws that make individual bankers responsible if their institutions launder money, but there are administrative guidelines in existence that require due diligence. The law does, however, protect bankers and other financial institution employees who cooperate with law enforcement entities.
The 1998 Foreign Exchange and Foreign Trade Control Law required travelers entering and departing Japan to report physically transported currency and monetary instruments exceeding one million yen (approximately U.S. $8,916) or its equivalent in any other foreign currency to customs authorities. The reporting requirement is virtually ignored by travelers, however, because there is no meaningful penalty (i.e., seizure of currency) for failure to report.
Japan is a party to the 1988 UN Convention and has adopted formal articles of ratification. In December 2000, Japan signed the United Nations Convention against Transnational Organized Crime. Japan is a member of the Financial Action Task Force. The JAFIO joined the Egmont Group of FIUs in 2000. Japan is also a member of the Asia/Pacific Group against Money Laundering.
Japan has not enacted laws that allow for sharing of seized narcotics assets with other countries. However, the Japanese Government cooperates with efforts by the U.S. and other countries to trace and seize assets, and makes use of tips on the flow of drug-derived assets from foreign law enforcement efforts to trace funds and seize bank accounts.
The Government of Japan should stringently enforce the Anti-Organized Crime Law, which will enhance Japan's ability to combat a wide range of money laundering activities. The Government of Japan has many legal tools and agencies in place to successfully detect, investigate, and combat money laundering. Japan could strengthen its anti-money laundering regime by enacting penalties for non-compliance with the Foreign Exchange and Foreign Trade Law, adopting measures to share seized assets with foreign governments, and strongly enacting banker "due diligence" provisions.