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Sanctions and Instructions Executed against Gold Trading Company

April 26, 2019

Agency for Natural Resources and Energy

Under the Act on Prevention of Transfer of Criminal Proceeds (Act No. 22 of 2007; hereinafter referred to as the “Act”), the Ministry of Economy, Trade and Industry (METI) executed administrative sanctions and other instructions as below against one company engaging in transactions of gold bullion and other materials.

1. Details of the administrative sanctions and other instructions

Under Article 17 of the Act, METI conducted the following administrative guidance:

  1. The company should promptly submit a notification of suspicious transactions* stipulated in Article 8 (1) and (2) of the Act; and
  2. To prevent further occurrence of such violations, the company should take measures for appropriately performing obligations required to Specified Businesses that are stipulated in the provisions of Article 11 (1) and (2) of the Act, including further enhancement of educational training to employees of the company and confirmation of required items concerning transactions of the company with customers, e.g., development and revision of rules.

Along with this, METI issued an Order for Request for Reports to the company under Article 15 of the Act and requested the company to submit a report on the measures that the company has conducted to satisfy the guidance above by the designated date.

*Note: The term “suspicious transactions” refers to transactions in which a company in question obtains assets through its transaction involving specified business and the assets are suspected to be criminal proceeds under Article 2 (1) of the Act or transactions in which any customer, etc. of a company in question is suspected to conduct activities equivalent to criminal conduct under Article 10 of the Act on Punishment of Organized Crime or other laws and regulations.

2. Details of the violations

The company mentioned above has been trading with a customer that has been conducting in suspicious transactions of a large amount of gold bullion in cash repeatedly for a short period of time. Nevertheless, the company failed to submit a notification of this fact to the administrative authority.

Note: METI has released the guidelines titled “Compliance Laws and Regulations that Businesses Engaging in Transaction of Gold Bullion and Other Materials Should Observe,” as a reference for businesses in determining suspicious transactions. The guidelines also present specific case examples of business modes involving suspicious transactions.

Division in Charge

Mineral and Natural Resources Division, Natural Resources and Fuel Department, Agency for Natural Resources and Energy