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UNCLAS SECTION 01 OF 12 TOKYO 000490 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA; 
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION; 
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE; 
SECDEF FOR JCS-J-5/JAPAN, 
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA 
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR; 
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. 
 
E.O. 12958: N/A 
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 02/02/07 
 
 
TOKYO 00000490  001.3 OF 012 
 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule 
 
Daily Kyuma report: 
4) Defense Minister Kyuma's anti-US remarks damaging US-Japan 
relations 
5) Kyuma's criticism of US policy toward Iraq sets off pro-con 
debate in the LDP 
6) LDP supporters of Defense Minister Kyuma agree that US war in 
Iraq was a "mistake" 
 
Abe administration and Diet in turmoil: 
7) With opposition camp boycotting budget committee, and Abe 
refusing to fire Yanagisawa, ruling camp to ram extra budget through 
Lower House 
8) As popularity rates plummet in polls and fear of loss of upcoming 
election grows, talk of Abe cabinet shuffle after budget passes Diet 
 
9) Resolution of Yanagisawa flap to be put off until after 
Kita-Kyushu mayoral and Aichi gubernatorial races: If LDP candidates 
lose, Yanagisawa must quit 
10) New government team to produce countermeasures on income 
disparity in mid-February, start implementation in FY2007 
11) Ozawa calls Japan a country with the highest income disparity in 
the world, a claim that Chief Cabinet Secretary Shiozaki rejects 
 
12) Prime Minister's team to come up with urgent measures in weeks 
to tackle social and income disparity issue 
 
13) Minshuto lawmaker Kondo guilty of taking illegal contribution 
from pro-North Korea Chosen Soren 
 
14) China sounds out Japan about inviting Crown Prince, Princess to 
opening of Beijing Olympics 
 
15) ODA council to be folded into planned Japan-style NSC 
 
16) Police changing policy toward tracking money laundering by 
organized crime 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Five occupations including lawyers to be exempt from obligation to 
report suspected money laundering in National Police Agency policy 
shift 
 
Mainichi: 
Fresh discovery of Nikko Cordial Group's overstatement of earnings 
as 23.9 billion yen likely to affect examination process as to 
whether to delist the firm 
 
Yomiuri: 
Philippines to officially allow kidney-transplant trade 
 
Nihon Keizai: 
World No. 2 Sumco to compete over semiconducting material investment 
 
TOKYO 00000490  002.2 OF 012 
 
 
by investing 350 billion yen to triple its production capacity 
 
Sankei: 
Supplementary budget bill to clear Lower House without attendance of 
the opposition; Prime minister denies possibility of dismissing 
Yanagisawa 
 
Tokyo Shimbun: 
No explanation to residents about occurrence of lead leakage last 
August from resource-recycling facilities for power generation in 
Saitama Prefecture 
 
Akahata: 
Stop deliberations among the ruling parties alone and forcible 
passage of bill 
 
2) EDITORIALS 
 
Asahi: 
(1) Boycotting Diet debate over Yanagisawa's controversial remarks 
is painful 
(2) Participation of victims in trials: Both psychological and 
material support needed to shed light on truth 
 
Mainichi: 
(1) Yanagisawa should resign to take responsibility for his remarks 
 
(2) Nuclear power plant's data fabrication: Unless the nature of the 
company has changed, the public will never trust it 
 
Yomiuri: 
(1) Opposition camp's boycott of deliberations: The slogan of taking 
the helm seems to be an empty one 
(2) Unqualified midwifes: Lack of indictments calls into question 
current state of obstetrics 
 
Nihon Keizai: 
(1) Data manipulation at nuclear power plant: Thorough investigation 
and establishment of compliance system urged 
(2) Strict control of tuna resources urged 
 
Sankei: 
(1) Tokyo Electric Power's fabricated data on nuclear power plants: 
Safety essential 
(2) Spring training: Using "Hoshino Japan" to stimulate pro 
baseball 
 
Tokyo Shimbun: 
(1) Reform of criminal trials: Concern about courts becoming venue 
for revenge with participation of victims in trials 
(2) Coming baseball season: Taking a step toward the future 
 
Akahata: 
Defending MHLW Minister Yanagisawa: Prime minister is equally 
guilty 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, February 1 
 
NIHON KEIZAI (Page 2)  (Full) 
February 2, 2007 
 
TOKYO 00000490  003.2 OF 012 
 
 
 
08:06 
Met with Deputy Chief Cabinet Secretary Shimomura at the Kantei. 
 
09:06 
Met with Finance Minister Omi in the Diet. 
 
09:57 
Met Deputy Chief Cabinet Secretary Suzuki at the Kantei, followed by 
Deputy Chief Cabinet Secretary Matoba. 
 
11:00 
Lower House Budget Committee meeting. 
 
12:26 
Voted by absentee ballot for the Shimonoseki City Assembly election 
in Yamaguchi Prefecture at the Chiyoda Ward Office in Kudan-Minami. 
 
13:00 
Lower House Budget Committee meeting. 
 
17:02 
Upper House Budget Committee meeting. 
 
17:25 
Met with Vice Finance Minister Fujii and Budget Bureau Director 
General Tsuda at the Kantei. 
 
18:18 
Met with Kiribati President Tong. Then met with Vice Foreign 
Minister Yachi. 
 
20:06 
Returned to the official residence. 
 
4) Fear that Kyuma's "anti-US remarks" could affect Japan-US ties 
 
MAINICHI (Page 5) (Full) 
February 2, 2007 
 
Defense Minister Fumio Kyuma's "anti-US remarks" over the Iraq war 
and the planned relocation of Futenma airfield, a US military base 
in Okinawa Prefecture, are causing controversy. Kyuma called the US 
government's decision on the Iraq "wrong," and he has also referred 
to the possibility of retouching a bilaterally agreed plan to build 
a V-shaped pair of airstrips as a replacement for Futenma airfield. 
There are various views about Kyuma's real intention, with one 
surmising that he thought of the Diet with an eye to extending the 
Iraq Special Measures Law, and another saying that this was 
spadework to get Okinawa's understanding on Futenma relocation. 
However, government officials are concerned about repercussions on 
Japan-US relations. 
 
On Jan. 24, Kyuma said the United States' decision on the Iraq war 
was "wrong." On Jan. 27, he touched on the issue of Futenma 
relocation and said: "I've told the United States not to be so 
arrogant." On Jan. 30, Prime Minister Shinzo Abe met with cabinet 
ministers, including Kyuma and Foreign Minister Taro Aso, to pull 
them together on the Futenma issue, and Abe ordered them to 
coordinate Futenma relocation based on the government's plan. 
 
One government official takes it that Kyuma made those remarks for 
 
TOKYO 00000490  004.2 OF 012 
 
 
domestic reasons. According to the official, Kyuma considered the 
New Komeito, which remains cautious about extending the special 
measures law, and Kyuma's remarks over Futenma relocation were 
intended to get Okinawa Gov. Hirokazu Nakaima's understanding on the 
government's plan, because the governor has been calling for the 
government to revise it. Kyuma is a heavyweight in the defense 
policy clique and is confident of Japan-US relations, so a 
government source deems it difficult to silence him. 
 
However, Washington informally asked Tokyo about Kyuma's remarks. In 
response, the government explained that Kyuma gave the impressions 
he had before he became a cabinet minister. One Foreign Ministry 
source fears that criticizing the Iraq war "could strike a nerve 
with President Bush." 
 
Meanwhile, some lawmakers in the ruling Liberal Democratic Party 
defended Kyuma. The LDP yesterday held a joint meeting of its 
defense-related panels, in which former LDP Secretary General Koichi 
Kato pressured the government, saying: "I wonder why he has to be 
under fire. It's common sense in the world (that the Bush 
administration's decision on the Iraq war was wrong)." 
 
5) Debate over Kyuma remarks 
 
SANKEI (Page 5) (Full) 
February 2, 2007 
 
The ruling Liberal Democratic Party yesterday held a joint meeting 
of its divisions related to national defense at its headquarters, 
focusing on Defense Minister Fumio Kyuma's recent controversial 
remarks that have brought about a backlash from the United States. 
In his recent remarks, Kyuma said US President Bush's decision on 
the Iraq war was "wrong." One of those in the meeting voiced 
concerns about the possible impact of these remarks on this summer's 
election for the House of Councillors as well as Welfare and Labor 
Minister Hakuo Yanagisawa's gaffe. In the United States, criticism 
is growing in the Bush administration. Reflecting this, some 
defended Kyuma. 
 
The US government asked the Japanese government about Kyuma's 
remarks, and the Japanese government explained that Kyuma stated his 
"personal view" when the Iraq war started. Kyuma also explained: "I 
must be careful what I say. I thought I'd better not say anything 
even though that's my impression." 
 
However, Yoichi Masuzoe, who chairs the policy board of LDP members 
in the House of Councillors, expressed concerns about repercussions 
on the Upper House election, saying, "He must explain it to the 
people in an appropriate way, or this could become a point of 
contention in the election." Former Defense Agency Director General 
Yoshinori Ono also noted, "If Japan's participation (in the work of 
assisting Iraq with its reconstruction) was wrong, that will hurt 
the pride of Self-Defense Forces members." 
 
Former LDP Secretary General Koichi Kato criticized the United 
States, saying: "President Bush himself and officials admitted to 
the mistake, and 60% of the American people are opposed to sending 
reinforcements to Iraq. Given such a situation, I wonder why only 
Mr. Kyuma has to get it from the United States." Kato also said, 
"Mr. Kyuma only spoke of global common sense." With this, Kato 
defended Kyuma. 
 
 
TOKYO 00000490  005.2 OF 012 
 
 
6) LDP lawmakers defend Kyuma 
 
ASAHI (Page 4) (Full) 
February 2, 2007 
 
The ruling Liberal Democratic Party yesterday held a joint meeting 
of its defense-related divisions, in which LDP lawmakers defended 
Defense Minister Kyuma, who has been under fire for calling the 
United States' decision on the Iraq war "wrong." 
 
Former LDP Secretary General Koichi Kato said: "In the United States 
as well, many more people think it was wrong. He only stated the 
world's common sense." With this, Kato raised a question about the 
US government's posture. Katsuei Hirasawa, a member of the House of 
Councillors, also said, "It's strange that the United States 
expresses displeasure." In the meeting, many supported Kyuma. 
 
However, former Defense Agency Director General Yoshinori Ono raised 
an objection, saying: "If it (Iraq war) is deemed wrong, what will 
become of the pride of Self-Defense Forces members (sent to Iraq)?" 
 
7) Extra budget to clear Lower House in absence of opposition 
members; Abe has no intention to remove Yanagisawa from cabinet 
post 
 
SANKEI (Top Play) (Excerpts) 
February 2, 2007 
 
The House of Representatives Budget Committee yesterday started 
deliberations on a supplementary budget for fiscal 2006 with the 
attendance of only the members of the ruling Liberal Democratic 
Party and its coalition partner New Komeito since four opposition 
parties --Minshuto (Democratic Party of Japan), the Japanese 
Communist Party, the Social Democratic Party, and the People's New 
Party -- were boycotting the Budget Committee session over Health, 
Labor and Welfare Minister Hakuo Yanagisawa's comments referring to 
women as "baby-making machines." During the session, Yanagisawa 
again apologized for his controversial remarks, but he stated he 
would not step down from his cabinet post. The ruling coalition 
intends to adopt a supplementary budget for FY2006 totaling 3.7723 
trillion yen, which includes expenditures for emergency disaster 
measures, today at the committee session and a plenary session of 
the Lower House. 
 
It is the first time for all opposition parties and parliamentary 
groups to boycott the budget committee session from the beginning 
since they did so in 2000. Lower House Budget Committee Chairman 
Kazuyoshi Kaneko urged the opposition to attend the session, 
delaying the start by two hours, but the opposition did not show up. 
The one JCP member on the committee briefly attended the session but 
walked out before deliberations began, protesting the ruling 
coalition proceeding with committee debate without members from the 
opposition parties. The House of Councillors Budget Committee, too, 
conducted a session to explain the supplementary budget for FY2006 
with the opposition parties absenting themselves from the session. 
 
During the Lower House Budget Committee session, Yanagisawa 
apologized three times. Prime Minister Shinzo Abe stated: "I also 
apologize profusely for his remarks." He again stressed his 
intention not to remove Yanagisawa from his cabinet post, saying, "I 
want him to do his best to regain the public confidence by steadily 
promoting measures, including ones to counter the dropping 
 
TOKYO 00000490  006.2 OF 012 
 
 
birthrate." 
 
The largest opposition party Minshuto, meanwhile, confirmed at a 
meeting of its Diet Affairs Committee members that the party would 
not attend unless Yanagisawa is dismissed from his post. 
 
8) Speculation about cabinet reshuffle after passage of budget bill 
emerging in LDP, given concerns about declining cabinet support 
ahead of Upper House election 
 
NIHON KEIZAI (Page 2) (Full) 
February 2, 2007 
 
In the Liberal Democratic Party, speculation has been rife that 
Prime Minister Shinzo Abe will reshuffle his cabinet after the FY 
2007 budget bill clears the Diet, possibly around late March or 
early April. The cabinet has been dogged by a spate of scandals 
involving cabinet ministers, including a controversial remark by 
Health, Labor and Welfare Minister Hakuo Yanagisawa, a political 
funds scandal involving Agriculture, Forestry and Fisheries Minister 
Toshikatsu Matsuoka, and criticism of the United States by Defense 
Minister Fumio Kyuma. Behind such speculation is a sense of alarm 
toward the declining support rates of the Abe administration, with 
an eye on the House of Councillors election in July. 
 
Referring to a possible reshuffle of the cabinet after the budget 
bill is passed in the Diet, a senior LDP member said yesterday, "In 
order for the administration to regain political ground before the 
Upper House election, it is necessary to form a cabinet focusing on 
rescuing the nation instead of reward-oriented appointment." This 
LDP member indicated the necessity of a large-scale reshuffle, 
saying that if only a limited number of members are replaced, people 
might think that the prime minister "only touched on the problems." 
 
In an executive meeting of the Koga faction, to which Yanagisawa 
belongs, a number of participants criticized the proceedings at a 
meeting of the Tsushima faction on the day before calls for 
Yanagisawa's resignation grew stronger. One participant claimed: "It 
is outrageous that (lawmakers) speak about the resignation of a 
cabinet minister who belongs to another faction. We have never 
mentioned the problem of (remarks critical of the US by) the defense 
minister or when Genichiro Sata resigned as state minister in charge 
of administrative reform." 
 
But Discipline Committee Chairman Takashi Sasagawa of the Tsushima 
faction only repeated this remark: "I hope the wound will heal 
before the Upper House election, but opposition parties are trying 
to reopen it. I wonder if both the prime minister and the health 
minister will be able to endure the current situation." The Tsushima 
faction lost three key posts when the Abe administration was formed. 
Given this, many faction members are hopeful of a cabinet 
reshuffle. 
 
In view of the schedule, however, it is difficult to carry out a 
cabinet reshuffle. The current session was convened one week behind 
the original schedule. In addition, some are doubtful, focusing on 
the fallout of the Yanagisawa remark, about the passage of the 
budget bill by the end of this fiscal year. In April, nationwide 
local elections will be held, and Chinese Premier Wen Jiabao is 
scheduled to visit Japan. During the Golden Week holidays, a 
Japan-US summit is planned in the US, so preparations for the summit 
are also necessary. A reshuffle is a double-edged sword. 
 
TOKYO 00000490  007.2 OF 012 
 
 
 
An LDP executive said, tilting his head: "People would take the 
cabinet reshuffle, if implemented, as an election ploy. In such a 
case, the prime minister would be exposed to criticism. I do not 
think the prime minister is considering a cabinet reshuffle." 
 
9) Welfare Minister Yanagisawa's controversial remarks to be settled 
after Aichi gubernatorial and Kitakyushu mayoral elections; If 
candidates backed by ruling coalition defeated, calls for 
Yanagisawa's resignation will become stronger 
 
MAINICHI (Page 5) (Excerpts) 
February 2, 2007 
 
As Prime Minister Shinzo Abe has repeatedly stated that he will not 
remove Health, Labor and Welfare Minister Hakuo Yanagisawa from his 
cabinet post, the course of action of Yanagisawa, who made the 
controversial remarks calling women "baby-making machines," will 
likely be decided after the Aichi gubernatorial and Kitakyushu 
mayoral election on Feb. 4. The ruling parties have tentatively 
agreed that he does not need to resign. However since tensions are 
growing with the opposition camp, which has continued to lock horns 
with the government and ruling coalition, it is unavoidable that 
calls for Yanagisawa's resignation will become stronger in the 
ruling camp if the ruling coalition backed candidates are defeated 
in the Feb. 4 races. 
 
"I ask you for your understanding and cooperation for our position 
of supporting Minister Yanagisawa and the Abe cabinet," said former 
Foreign Minister Nobutaka Machimura, chair of the LDP's faction he 
heads, in a meeting of his faction yesterday. 
 
Machimura has discussed the Yanagisawa issue with the heads of the 
LDP factions for several days. He underscored a sense of crisis, 
saying, "If the welfare minister has to resign because of such a 
matter, the cabinet will collapse." By doing so, he has supported 
the Prime Minister's Official Residence (Kantei) from inside the LDP 
in order to make Yanagisawa remain his post. Former Prime Minister 
Junichiro Koizumi also telephoned yesterday to LDP Secretary General 
Hidenao Nakagawa, saying, "Don't give into the opposition parties 
that are boycotting deliberations on the budget that is directly 
connected with the people's livelihoods." Koizumi told Nakagawa that 
he would support Abe's position. 
 
During a session yesterday of the House of Representatives Budget 
Committee, Abe made a statement supporting Yanagisawa: "I want the 
welfare minister to do his best to regain the public confidence by 
steadily promoting measures to counter the declining birthrate." He 
also told reporters about the Aichi gubernatorial and Kitakyushu 
mayoral races that local residents would decide how their prefecture 
and city should be in the future through the elections. 
 
Genichiro Sata, then state minister in charge of administrative 
reform, was forced to quit his post over a money scandal late last 
year. Abe is worried that if another cabinet minister resigns, his 
leadership will weaken. Therefore, New Komeito Chief Representative 
Akihiro Ota made a comment backing Abe: "It is important that (the 
welfare minister) devote all his energy to his job." 
 
10) New government team to produce countermeasures on income 
disparity in mid-February, start implementation in FY2007 
 
 
TOKYO 00000490  008.2 OF 012 
 
 
NIHON KEIZAI (Page 2) (Excerpts) 
February 2, 2007 
 
The government yesterday held the first meeting of its strategic 
concept team for enhancing the nation's potential, a panel headed by 
Chief Cabinet Secretary Shiozaki and tasked with working out 
measures to deal with the income disparity. 
 
The team decided to compile by mid-February a package of support 
measures focused on (1) workers' capabilities; (2) support for 
employment; and (3) small businesses. These measures will be 
implemented over the three years starting in FY2007 in an intensive 
way. 
 
The team was established at the instruction of Prime Minister Abe. 
Although Abe was unwilling to admit the existence of the 
income-disparity problem, he has judged it necessary to come up with 
counterarguments to attacks by Minshuto (Democratic Party of Japan) 
over the social disparity issue in the current Diet session. 
 
The focus of discussion in the team will be on improving the skills 
of part-time workers and other workers, as well as increasing 
minimum wages by upgrading the productivity at small businesses. 
 
11) Ozawa: "The income disparity in Japan is the largest in the 
world;" Shiozaki: "Evidence should be presented" 
 
YOMIURI (Page 2) (Excerpts) 
February 2, 2007 
 
In a representative interpretation at the House of Representatives' 
plenary session on Jan. 29, Minshuto (Democratic Party of Japan) 
President Ozawa said, "The income disparity in Japan is the largest 
in the world." In reaction, Chief Cabinet Secretary Shiozaki said in 
a press conference yesterday, "I would like to ask Mr. Ozawa to 
present evidence." 
 
Shiozaki refuted Ozawa's view, "According to the Gini coefficient, 
which is the most commonly used index of social disparity, Japan is 
in the middle among the Group of Seven Nations (G-7)." In a survey 
of the Organization for Economic Cooperation and Development (OECD), 
the Gini coefficient of Japan was 0.31, close to the average figure 
of the 26 countries surveyed and ranking fourth. 
 
In response, Minshuto Acting President Kan said in a press briefing, 
"The remark by Mr. Ozawa has a sound basis." 
 
12) Kantei team to map out emergency measures to correct social 
disparity in about two weeks: Focus on assistance for job-seekers 
 
YOMIURI (Page 9) (Excerpts) 
February 2, 2007 
 
The government yesterday held the first meeting of the Economic 
Growth Enhancement Strategy Initiative Team, led by Chief Cabinet 
Secretary Shiozaki, a panel aiming at improving the income of 
 
SIPDIS 
low-income earners, at the Prime Minister's Official Residence. 
Participants confirmed that emergency measures would be mapped out 
in about two weeks. The process will involve mapping out specific 
measures to raise the income level of "freeters" or job-hopping 
part-time workers and single-parent families by raising their 
vocational capability. 
 
TOKYO 00000490  009.2 OF 012 
 
 
 
Shiozaki told a news conference yesterday, "The social disparity is 
a major challenge left behind by the Koizumi reform drive." The Abe 
cabinet wants to come up with a stance of grappling squarely with 
the issue of the working poor, who can only earn income below the 
level required to receive welfare benefits due to widening economic 
disparities no matter how hard they work. 
 
Reflecting on the lack of integrity in the previous employment, 
social security and industrial measures caused by bureaucratic 
sectionalism, the government will aim at compiling a comprehensive 
human resources investment strategy, which will lead to revitalizing 
the Japanese economy. 
 
The UK Blair administration's approach to this issue will serve as a 
useful reference when the panel maps out specific measures by the 
panel. 
 
The Blair administration in 1998 introduced a new employment policy 
in a major shift from the previous welfare policy of paying generous 
unemployment benefits to an employment-assistance-type hiring 
policy. 
 
Under the policy target "from welfare to employment," it became 
mandatory for unemployed young people aged 18-24 to take part in the 
government's employment assistance program in order for them to be 
qualified to receive unemployment benefits. 
 
13) Another DPJ lawmaker received illegal political fund donations: 
Shoichi Kondo got 3.2 million yen from pro-Pyongyang companies 
 
SANKEI (Page 2) (Full) 
February 2, 2007 
 
It was learned yesterday that the Democratic Party of Japan's (DPJ 
or Minshuto) Aichi Prefecture No. 3 constituency branch headed by 
Shoichi Kondo (Aichi No. 3 constituency), who represents the SDP 
Aichi Chapter, received donations totaling 3.2 million yen from five 
companies run by a person connected to the pro-Pyongyang General 
Federation of Korean Residents in Japan (Chongryun or Chosen Soren) 
in 2002 and 2003 in a suspected violation of the Political Funds 
Control Law. Told by outsiders that there were allegations of 
illegal political donations, Kondo returned all the money by last 
year. 
 
According to Kondo and the organization's political fund report, the 
donations were made by pachinko parlor operators in Aichi 
Prefecture. A person who serves as an executive of a 
Chongryun-related organization owns these five companies. The 
donations were reportedly made under the name of the companies. 
 
The Political Fund Control Law prohibits lawmakers from receiving 
political fund donations from non-Japanese, foreign corporations and 
organizations consisting mainly of foreigners or foreign 
corporations. 
 
In a similar incident, it has been pointed out that DPJ lawmaker 
Giichi Tsunoda, who was elected from a Gumma constituency and 
resigned as Upper House vice president, received a 500,000 yen 
donation from the pro-Pyongyang Gumma chamber of commerce and 
industry for North Korean residents in Japan. 
 
 
TOKYO 00000490  010 OF 012 
 
 
Kondo said, "I received the donations without properly checking the 
identity of the donors. I will be careful so that this kind of thing 
will not happen again." 
 
14) China sounds out Japan about inviting the Crown Prince and 
Princess to the Beijing Olympics 
 
YOMIURI (Page 1) (Full) 
February 2, 2007 
 
It was learned yesterday that the Chinese government informally 
sounded out the Japanese government about inviting the Crown Prince 
and Princess to the 2008 Beijing Olympics. This invitation was 
relayed via Chinese Ambassador to Japan Wang Yi to Japanese 
government officials, ruling coalition members and people connected 
to Japan-China friendship organizations. Upon gauging the response 
in Japan, China is likely to offer a formal invitation. 
 
According to informed sources, Wang has been energetically 
exchanging views on the challenges facing Japan and China with 
various circles in Japan since the beginning of the year in 
preparation for Premier Wen Jiabao's planned visit in April. In a 
series of talks, Wang reportedly revealed the idea of inviting the 
Crown Prince and Princess to the Beijing Olympics and sought 
indirect support for the idea. In terms of visits to China by the 
Emperor or imperial family members, a visit to China by the Crown 
Prince and Princess, if realized, would follow the one by the 
Emperor and Empress in 1992. 
 
One Japanese government official yesterday indicated that the 
government would deal with it cautiously, saying: "It has been 
relayed to us, but we need to see how the situation will go in the 
coming weeks. It's not yet time to show a certain direction." 
 
15) ODA Council to be merged into Japanese version of US NSC 
 
YOMIURI (Page 4) (Full) 
February 2, 2007 
 
The Overseas Economic Cooperation Council (OECC), which decides the 
basic strategy of official development assistance (ODA) programs, 
will be merged into a Japanese version of the US National Security 
Council (NSC), the establishment of which is aimed at strengthen the 
Prime Minister's Official Residence's function of making foreign 
policy and security policy, it was decided yesterday. 
 
The OECC consisting of the prime minister, chief cabinet secretary, 
foreign minister, finance minister, and minister of economy, trade 
and industry was set up last April as the control tower in order to 
unify ODA programs that relevant ministries implemented separately 
and to use them strategically. The government has determined that in 
order for the Japanese version of the US NSC to draft a long-term 
diplomatic and security strategy, it is absolutely necessary to use 
ODA projects, Japan's important diplomatic tools, and discuss the 
matter. 
 
The plan will be submitted to a meeting today of the Council to 
Strengthen the Kantei's National Security Functions (chaired by 
Prime Minister Shinzo Abe) as the proposal by former Deputy Chief 
Cabinet Secretary Nobuo Ishihara. The meeting is expected to approve 
it. 
 
 
TOKYO 00000490  011.2 OF 012 
 
 
16) Five occupations including lawyers to be exempt from obligation 
to report suspected money laundering in National Police Agency 
policy shift 
 
ASAHI (Top play) (Excerpts) 
February 2, 2007 
 
In order to prevent money laundering by criminal syndicates, the 
National Police Agency (NPA) is going to submit to the current Diet 
session a bill preventing the transfer of illegally earned money 
(commonly called a gatekeeper bill), which is to obligate legal and 
accounting experts and others to notify the government of 
"suspicious transactions." In this regard, the NPA yesterday decided 
to exempt five occupations -- lawyers, judicial scriveners, 
administrative scriveners, certified public accountants, and 
certified tax accountants -- from the obligation to notify the 
government of suspicious transactions. The Japan Federation of Bar 
Associations (JFBA) was opposed to that obligation on the ground 
that if lawmakers "inform" against their clients, the basis of the 
relationship of trust between lawyers and clients will be shaken. 
 
The NPA's initial idea was to obligate a total of 42 businesses, 
such as credit card companies, real estate agencies, precious metal 
dealers, and judicial scriveners, to (1) confirm clients' identity, 
(2) keep records of transactions for seven years, and (3) notify the 
government offices of suspicious transactions. Regarding lawyers, 
the mechanism was that the JFBA would stipulate the obligation of 
lawyers in its rules, that lawyers would first notify the JFBA, and 
that the JFBA, if it determined it was necessary to notify the NPA, 
would do so. 
 
With the NPA's policy shift this time, the five occupations are 
exempted from the above obligation (3), but except for lawyers, the 
other four occupations will be obligated to follow the above (1) and 
(2). The NPA will ask the JFBA to stipulate this in its rules. Those 
who are engaged in businesses other than those five occupations will 
be obligated to notify the government if properties they handled in 
their business operations are suspected of being profits from 
crimes. 
 
Analysis: Effectiveness of legislation doubtful 
 
Kenji Ogata 
 
The NPA's policy shift was the result of its consideration for 
lawyers' criticism that the bill is in effect aimed at encouraging 
them to inform against their clients. Also the policy shift came 
because priority was given to enactment. On the other hand, cases in 
which lawyers were exploited by gangsters for their economic crimes 
have occurred. The effectiveness of this legislation is likely to be 
questioned in the days ahead. 
 
The primary goal of the Financial Action Task Force (FATF), an 
inter-governmental body developing and promoting policies to combat 
money laundering, is to cut off funds for terrorism and illegal 
gains from criminal syndicates. If the bill is enacted into law, it 
will serve as a weapon to deal with gangs, among others. 
 
One lawyer who deems it necessary for lawyers to notify the 
government of suspicious transactions expressed concern: "Lawyers 
have confidence in society, so they could be exploited by the 
underground community." 
 
TOKYO 00000490  012.2 OF 012 
 
 
 
The president and others of a venture-business firm, who were 
exposed in February 2006 for phony capital increase, had put 800 
million yen borrowed from a gangster with whom they had close ties 
into a lawyers' bank account. The lawyer was not aware of this fact, 
but this case indicates exploitation like this could occur. 
 
Lying also behind the policy shift is the indication by the ruling 
parties that (the NPA's bill) was sloppy. Given that there is a 
strong anxiety about strengthening police authority, the NPA should 
not spare any effort to obtain understanding and cooperation about 
the need for this kind of legislation. 
 
 
SCHIEFFER