The Japan Federation of Bar Associations (JFBA) undertook special training on client identity verification and record-keeping on January 20, 2009, in Tokyo.

At the beginning of the training, Mr. Yuichi Kaido, Vice-Chairperson of the JFBA Committee on International Criminal Law Legislation, reported on the JFBA’s activities and achievements in blocking the establishment of a system which would require attorneys to reveal information on their clients to the state (the so-called “Gatekeeper System”). Mr. Kaido explained the JFBA comment issued in November 2008 responding to the Mutual Evaluation of the Financial Action Task Force on Money Laundering (FATF) (the FATF is an inter-governmental body of which 32 countries and regions, and 2 international bodies are currently members). “It is important for attorneys to continue to fulfill our obligations to verify the identities of our clients and keep records in order to avoid the reporting obligations of suspicious transactions,” he said, emphasizing the importance of demonstrating through actual practices that attorneys never assist in the transfer of criminal proceeds.

Next, Mr. Tatsu Katayama, Director of the JFBA Office of International Affairs, presented specific methods used to transfer criminal proceeds and actual cases, from inside and outside of Japan, in which attorneys got involved in the transfer of criminal proceeds. In addition, Mr. Katayama provided an in-depth explanation, using a risk-based approach, on what attorneys should keep in mind to avoid being involved with such transfers and showed specific risks in each country or region and the characteristics of clients involved in illegal transfers.

Finally, Mr. Yukio Yamashita, Chief Secretary of the JFBA Committee on International Criminal Law Legislation, explained the legislative history behind the provisions intending to require attorneys to report suspicious transactions to the state and that the provisions were deleted from the Bill on the Prevention of the Transfer of Proceeds from Crimes on condition that the JFBA establish its Rules Regarding Client Identity Verification and Record-Keeping. The JFBA Rules were established before the enactment of the said Bill. He further explained the objective, structure, and specific contents of the Rules.

It is imperative that every member strictly adhere to the Rules so that the enactment of reporting obligations continues to be prevented.