Identifier
Created
Classification
Origin
07TOKYO490
2007-02-02 08:04:00
UNCLASSIFIED
Embassy Tokyo
Cable title:  

JAPANESE MORNING PRESS HIGHLIGHTS 02/02/07

Tags:  OIIP KMDR KPAO PGOV PINR ECON ELAB JA 
pdf how-to read a cable
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FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 0304
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
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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:
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.


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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."

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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