September 25, 2001
Financial Services Agency

Financial Services Agency's Measures in response to the Simultaneous Terrorist Attacks in the United States

In the wake of the simultaneous terrorist attacks in the United States of September 11, the FSA has set up the Special Task Force headed by the Commissioner, gathered relevant information and taken necessary actions. In view of Government Response Policy adopted by the National Security Council on 12 September, ''Japan's Measures in response to the simultaneous terrorist attacks in the United States'' (decision by the Ministerial Meeting on Countermeasures to Terrorist Attacks) on 19 September, and G8 Heads of Government Statement of the same date, the FSA shall take the following measures to minimize the impact on the financial system of such incidents as the recent terrorist attacks and to prevent terrorist attacks in the future.

1. Maintaining the Stability of the Financial System

(1)	The FSA continues to take appropriate actions in collaboration with the Bank of Japan and financial authorities abroad in order to ensure that the stability of the financial system is maintained.
(2)	In particular, the FSA shall strengthen the networks of financial supervisors in the case of emergency, including through the Basel Committee on Banking Supervision (BCBS), International Organization of Securities Commissions (IOSCO), International Association of Insurance Supervisors (IAIS).

2. Freezing assets of individuals and/or entities pursuant to the UN Security Council Resolutions

The FSA shall remind financial institutions under its supervision of their obligations to comply with the Notices issued pursuant to the Foreign Exchange and Foreign Trade Law by the Ministry of Foreign Affairs, the Ministry of Finance, the Ministry of Economy, Trade and Industry, which have frozen assets of those individuals and/or entities designated on 8 March 2001 by the Security Council Committee Established Pursuant to Resolution 1267 (1999) Concerning the Situation in Afghanistan, based upon the UN Security Council Resolutions 1267 and 1333.

3. Measures related to the Anti-Money Laundering Framework

In view of FSA's authority to use the current anti-money laundering framework provided in ''Anti-Organized Crime Law'' (Law for Punishment of Organized Crimes, Control of Crime Proceeds and Other Matters), which entered into force in 2000, where terrorists' funds stem from crime proceeds, it shall take the following measures in particular.

(1)	The FSA shall 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, by utilizing the existing system of anti-money laundering. Also, the FSA shall 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.
(2)	The FSA shall continue its efforts to conclude bilateral arrangements on information exchange on suspicious transactions in relation to crime proceeds with foreign authorities.
(3)	In view of the Government's commitment to sign the International Convention for the Suppression of the Financing of Terrorism before the end of this year, the FSA, together with relevant Ministries which examine criminalization of acts of supplying funds to terrorists, shall examine such legislative measures as those obliging financial institutions to report transactions suspected of terrorists' financing, with a view to implementing the Convention at an earliest stage.

4. Surveillance of Fraudulent Transactions

(1)	Securities and Exchange Surveillance Commission (SESC) has been investigating, in cooperation with Tokyo Stock Exchange and Osaka Stock Exchange, whether or not fraudulent securities transactions have taken place in relation to the terrorist attacks of 11 September. If any suspicious cases are found, it shall take appropriate measures including verification of transactions.
(2)	The FSA shall strengthen international cooperation regarding surveillance of fraudulent transactions. In this respect, the FSA shall promptly conclude information exchange arrangements with foreign supervisory authorities.

5. Crisis Management of Financial Institutions

While the FSA has been implementing inspections of financial institutions to prevent crime and to cope with disasters in accordance with the Inspection Manual for these institutions, the FSA shall urge them to take the following measures in particular with a view to securing crisis management considering the recent incidents;

(1)	to ensure that they effectively liaise with law enforcement authorities in emergency situations and when they acquire any suspicious information.
(2)	to adopt measures to prevent terrorist attacks including, inter alia, appropriate and sufficient security management such as those related to entry and exit of personnel and critical security locks, as well as measures with a particular focus on computer crimes through networks such as cyber terrorism, and appropriate ex post facto systems to check the implementation of such measures.
(3)	to adopt measures to alleviate damage and continue business in the case of emergency including, inter alia, those to secure places beforehand for evacuation of important data, and data management systems with a view to securing back-ups, dispersion and relocation of data storage, as well as strengthening contingency plans in the case of emergency for their computer systems.