EXECUTIVE SUMMARY
The 17th Conference of the Parties (CoP17) to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) held in September and October 2016 recommended the closure of domestic ivory markets that are “contributing to poaching or illegal trade” as a matter of urgency (CITES, 2016). Faced with the worst elephant poaching crisis in three decades, countries and territories with major ivory markets such as China, Hong Kong, and the US have introduced plans, which are currently at different stages of implementation, to ban significant aspects of domestic ivory trade, while other countries, such as Thailand, are introducing and the UK is proposing stricter measures to curtail domestic ivory trade (Department for Environment Food and Rural Affairs, 2017; Kramer et al., 2017; Krishnasamy et al., 2016; TRAFFIC, 2016, 2017e).

Japan remains home to one of the largest domestic ivory markets in the world, and possesses an active, albeit shrinking, ivory manufacturing industry. Although the market has declined significantly over the past decades (Kitade and Toko, 2016; Vigne and Martin, 2010), a substantial but undefined amount of pre-Convention stock of ivory tusks is held in private ownership for noncommercial purposes, a cultural legacy of the country’s past ivory trade. Increasingly, owners of such ivory are disposing of it, resulting in some 10 t of such stock being newly registered1 for legal trade each year (Kitade and Toko, 2016).

Despite the large stockpiles and the existence of a legal domestic ivory market, the recent analysis of the Elephant Trade Information System (ETIS) for CoP17 concluded that “the ETIS data do not provide any recent evidence that Japan is a destination for the significant illegal ivory flows presently leaving Africa”. The ETIS analysis did, however, highlight the problem of on-going illegal export to China, domestic illegal trade, and persistent regulatory loopholes in Japan (Milliken et al., 2016). A recent study of online ivory trade in Japan further emphasized the high level of unregulated online trade (Kitade, 2017). Concerns about the status of Japan’s ivory market led to a proposal by certain African countries to reconsider the CITES Standing Committee (SC)’s decision not to include Japan
in the National Ivory Action Plan (NIAP) process at its 69th meeting (SC69) held in November 2017 (CITES, 2017b). As a consequence, the decision was not reconsidered at SC69, but Japan was requested to report to the next SC (CITES, 2017a).

This study presents a detailed assessment of Japan’s international ivory trade and its domestic market, with a focus on antiques and tourist market outlets. This evaluation of the current status of Japan’s domestic market is warranted and timely: firstly, because ivory trade in the antiques sector seems to have received the least government oversight historically; and secondly, Japan’s tourism sector is reshaping around rapidly increasing numbers of foreign visitors, hitting a record high of 24 million in 2016. The majority of this tourist influx is coming from East Asia (Japan National Tourism Organization, 2017), where major ivory demand centres exist and domestic ivory markets are constricting progressively. This study integrated information from a variety of sources with analyses conducted on: Japan’s current regulatory scheme and the status of controls, seizure records held in the ETIS database and other seizure reports, CITES trade data, as well as published cases of domestic illegal trade. Surveys were conducted in physical ivory markets, and physical and online auction platforms between May and September 2017, while antiques dealers as buyers of privately owned ivory were also interviewed during the same period.

In terms of strengthening of the regulation of Japan’s domestic ivory market, the scheduled reform of the Law for the Conservation of Endangered Wild Fauna and Flora (LCES) was conducted in June 2017, with an expected entry into effect no later than 1 June 2018. However, TRAFFIC’s evaluation found the proposed changes to be limited in terms of coverage and effect. Whilst the proposed reforms strengthened regulatory control over ivory businesses, critical loopholes in the law remain, including the issue of unquantified domestic stocks of whole ivory tusks and the lack of compulsory mechanisms to ensure legality of products in the market. The Ministry of Environment (MOE) launched a campaign in August 2017 to promote voluntary registration of whole ivory tusks in personal possession, but without mandatory registrations and an effective and traceable marking system this move is unlikely to address the problem of illegal ivory export of such specimens from Japan.

A review of seizure records revealed an increase in illegal ivory exports from Japan, especially from 2011 onwards. A total of over 2.42 t of ivory were seized as illegal exports from Japan, mostly by Chinese law enforcement authorities, between 2011 and 2016, comprising of 1.66 t of raw ivory and 764 kg of worked ivory. In contrast, seizures concerning illegal imports totalled only 7 kg of raw ivory and 36 kg of worked ivory. A very low number of seizures were actually made by Japanese authorities (only 22 cases over the six-year period 2011–2016). Overall, the illegal ivory trade activities captured in the ETIS data indicated a one-way trend in which ivory commodities were illegally  exported from Japan to China, representing 95% of all illegal export by weight. The involvement of transnational criminal networks in the smuggling of ivory out of Japan is now clearly evident, for example, the case surrounding the seizure of 804.4 kg of ivory in 2015 which led to 16 arrests by the Beijing Forest Police (TRAFFIC, 2015a). Japanese online platforms were further found to be exploited for purchasing worked ivory products, with the most recent seizure made by China’s Customs authority in 2016 involving 1,639 pieces of worked ivory and carved tusks, weighing 101.4 kg in total; these products were reportedly purchased from Japanese e-commerce sites and exported illegally to China (Changcheng Web, 2016). At the same time, the trend in CITES-reported trade did not show an increase in legal ivory re-exports from Japan in recent years, in contrast to the rising trend in such re-export incidents detected for the EU and the UK (Lau et al., 2016), suggesting further that Japan’s ivory export is likely happening largely through illegal trade routes and not with the benefit of CITES documentations.

Reviewing domestic illegal trade cases for this report highlighted serious issues with the illegal trade in unregistered tusks. Two of the most recent cases, in June and August 2017, exposed regular purchasing of a large number of privately-held unregistered tusks by major antiques companies, involving 39 suspects and 27 tusks seized in total (TRAFFIC, 2017b; WWF Japan, 2017b). These acts underscored gaps in law enforcement effectiveness despite the stricter penalties that were introduced in 2013 (TRAFFIC, 2013) and lax government oversight considering that both of these companies had “notified” the Ministry of Economy, Industry and Trade (METI) of their engagement
in the ivory trade as required by law. The lack of judicial and investigative follow-through for domestic illegal trade cases was also evident, for example, the two illegal ivory trade cases that occurred in 2017 have both ended in non-prosecution and were not followed by background investigation to clarify any links to international illegal trade (WWF Japan, 2017b). Surveys of physical ivory markets were conducted in the cities of Tokyo, Osaka, and Kyoto,
targeting antiques outlets and tourist areas to get an understanding of the availability of ivory items in Japan. The most popular product categories identified through the surveys were ivory netsukes, carvings and furnishings, and jewellery. A major problem encountered through the survey concerned the loophole in domestic regulations, which made it nearly impossible to discern the origin and legality of ivory products. Whole tusks, the only type of products with proof-of-legality requirements under current regulations, comprised less than 1% of all ivory items (~5,000) detected.

Even so, 68% of whole tusks observed were illegally advertised without the necessary registration cards accompanying the tusks, as required by law. The advent of new ivory product designs not previously identified in Japan but popular in overseas ivory markets were also detected at two shops in Tokyo’s major tourist areas, where the sellers of the shops who were both Chinese-speaking women admitted that the new ivory product lines were preferentially bought by foreigners. This development presents another facet of organized crime to profit from the premeditated targeted production and sales of ivory products for illegal exports by foreign customers, which is also a phenomenon observed concurrently in other parts of the world such as Lao People’s Democratic Republic (PDR), Viet Nam, and Zimbabwe (Liu, 2015; Vigne and Martin, 2017; T. Kitade pers. obs. July 2015).

Covert interviews with ivory vendors revealed a widespread purchasing of ivory products by foreign buyers, including professional dealers, or agents, in both antiques and tourist markets in recent years. Many vendors also stated the demand by foreign buyers has somewhat declined in the first half of 2017, which they attributed to a crackdown by the Chinese authorities on ivory trade in China, although purchase by foreign buyers could still be observed during the market survey. A 73% of vendors interviewed promoted illegal ivory exports, for example, suggesting that smaller ivory items can be hidden in luggage and without mentioning the need for permits, despite many of them being aware that the act constitutes a violation of CITES. Furthermore, vendors emphasized
the general laxness in Japan’s regulations and enforcement of ivory trade controls in comparison to other countries. It was not possible, however, to assess the legal compliance of each vendor in the market due to the lack of regulatory requirements to display business notification stickers under the current legislation2
.
Active trade was observed via both physical and online auction platforms that are openly accessible to the public, with nearly 100 whole ivory tusks sold during the survey period. The most striking finding was that until recently, ivory tusks traded through one of the major physical auction houses were being leaked into a smuggling route for illegal export, as uncovered during the survey through a covert interview with auction staff. The illegal advertisement of whole tusks without proper accompaniment of registration cards/numbers was also widespread in the physical auctions, and still observed to some extent at major online auction platforms even where the e-commerce company was supposedly conducting regular monitoring. The scale of ivory trade on the online auction site was larger than what was found at the major physical auctions (open to the public) combined. It was suggested by auction houses interviewed that another aspect of ivory trade is occurring in closed auctions between antiques dealers, although this was not surveyed in this study.

Finally, 76% of 50 general antiques buying businesses sampled across Japan had expressed an intention to purchase privately-owned ivory tusks and worked ivory products, but of those, 50% indicated there was no legal procedure required for trading ivory. This is contrary to the current law in force, which requires every whole tusk to be registered with MOE before it can be traded, including non-commercial gifting. While many appeared to be simply unaware, at least three businesses had knowingly admitted that they would evade the legal requirement. Whether any of these businesses were currently operating without notification to METI could not be confirmed, but
the overall awareness level of dealers suggests that a significant proportion could be. The surveyed businesses indicated that the purchased ivory would likely be sold onward to antiques collectors and ivory manufacturers in Japan, but at least three of them indicated it would be sold to overseas markets in Asia with two others admitting that they used to sell ivory to China in the recent past, although precise details of these dealers’ involvement in the illegal trade were not uncovered through the interviews.

In sum, the findings of this study revealed that Japan’s domestic ivory market availability is targeted for procuring products from the antiques and tourist markets for illegal ivory exports, as well as through physical and online auctions. Parts of such operations manifest the attributes of well-organized transnational criminal networks in illegally exporting ivory from Japan to China as gleaned from investigations associated with major seizures and evidence collected in various markets in Japan. In general, these domestic markets were found to be poorly regulated in the face of evidence suggesting illegal domestic trade, low compliance and unscrupulous attitudes on the part of many sellers, which gave rise to on-going illegal exports. This issue is ultimately compounded by a lack of high-level recognition and engagement towards the global fight against illegal ivory trade in particular and illegal wildlife trade in general. If this state of affairs is allowed to continue, it will produce negative impacts on efforts to close ivory markets in other Asian countries and territories, as well as having global implications. This threat persists regardless of the fact that Japan’s domestic demand for ivory products such as hanko is on a continuing trajectory of decline, because numbers of foreign visitors will continue to grow given the Japanese government’s plan to attract an annual 40 million visitors by 2020, the year of the Tokyo Summer Olympics and Paralympics (Government of Japan Cabinet Office, 2016).

In conclusion, the current status of Japan’s largely unregulated domestic ivory market has been demonstrated to meet one of the two conditions of an extant legal domestic ivory market to qualify for closure pursuant to the recommendation in paragraph 3 of CITES Resolution Conf. 10.10 (Rev. CoP17). In this regard, there is little evidence to suggest that Japan’s market is directly contributing to “poaching”, but there is considerable evidence to suggest it is contributing to “illegal trade”. TRAFFIC recommends a response on two levels: firstly, a series of immediate measures to halt illegal export and domestic trade that are illegal or unregulated; and secondly, starting the
deliberation of necessary legislative, regulatory and enforcement measures towards market closure in Japan while defining any narrow exemptions that do “not contribute to poaching or illegal trade” as stipulated in paragraphs 3 and 4 of Resolution Conf. 10.10 (Rev. CoP17). This process in essence means an establishment of strictly regulated systems whereby domestic stocks and restricted legal trade under narrow exemptions is effectively governed by comprehensive and enforceable mechanisms. Defining any narrow exemptions in the case of Japan will further involve sorting out the highly complex issues associated with social, economic and cultural ramifications for a
range of stakeholders and the public and will require an elaborate legal framework and regulatory changes. Although Japan was not included in the NIAP process at SC69, TRAFFIC considers such action to be warranted based on the findings of this report. Given the sense of urgency conveyed in Resolution Conf. 10.10 (Rev. CoP17), the Japanese government needs to make a concerted effort to address its ivory trade issue as a matter of priority.

Immediate measures to halt illegal trade in Japan
1. To halt illegal ivory export from Japan:
a. The MOF (Ministry of Finance, responsible for actions by Japan’s Customs authority) should increase law enforcement vigilance at the borders, in collaboration with the transport/logistics sector, especially targeting those travellers departing for China and other Asian countries/territories where demand for ivory is well documented. Japan’s Customs authority should enhance co-ordination and collaboration with Customs counterparts from China to develop bilateral law enforcement strategies, including the identification of points of entry/exit, criteria for targeting and profiling, and other related issues which may be exploited by those engaged in transnational ivory trade crime;
b. The MOE, METI, tourism industry, and providers of platforms for ivory selling should co-ordinate in conducting awareness raising campaigns at airports, antiques outlets, tourist areas, and department stores, to warn against the illegal export of ivory (e.g. mandatory signage in relevant languages, including the message “do not take ivory out of Japan”);
c. The METI, municipalities, industry associations and other relevant organizations should increase surveillance of ivory vendors (e.g. through internal rules and public/peer reporting system), particularly in the antiques and tourism sectors, so as not to facilitate the opportunity for illegal export by selling ivory products to foreign customers;
d. The METI should inform the organizers of occasional antiques fairs and markets across Japan to enforce the regulation of ivory businesses, and apply administrative and other penalties to operations that are found to be illegally operating.

2. To eliminate illegal and unregulated trade:
a. The MOE and METI should conduct a nationwide clampdown on illegal trade in whole tusks, and target illegal business operations and platforms such as auctions that are providing avenues for illegal trade, following through with appropriate judicial actions;
b. The MOE should review and audit registration records for whole tusks, to ensure that all registered tusks and transaction records, especially reports of ownership changes, are in order;
c. The MOE and METI as well as e-commerce companies should introduce a policy prohibiting online ivory trade;
d. The MOF (through Japan’s Customs authority) should assess the status of law enforcement at borders for intercepting illegal imports/exports and take strong measures to improve its effectiveness, while inviting co-ordinated efforts to strengthen vigilance in the transport/logistics sector. Market closure in Japan with narrow exemptions that do not contribute to poaching or illegal trade

3. The government should deliberate necessary legislative, regulatory and enforcement measures towards market closure while defining any narrow exemptions that do not contribute to poaching or illegal trade as stipulated in Resolution Conf. 10.10 (Rev. CoP17). The following considerations should be given to smooth the process:
a. A high-level policy on combatting illegal wildlife trade should be devised to raise the priority of illegal wildlife trade in various government sectors and enhance inter-agency collaboration on this matter;
b. Types of trade that are currently contributing to illegal exports and are identified to be difficult to regulate (e.g. online trade) should be banned promptly;
c. The MOE and METI should start a consultation process with relevant stakeholders (e.g. through the existing Public-Private Council for the Promotion of Appropriate Ivory Trade Measures) to define the narrow exemptions that are acceptable based on considerations for factors such as cultural importance and availability of substitute materials;
d. Given that no exemptions should contribute to poaching or illegal trade, comprehensive and enforceable regulatory systems should be established to govern the trade in terms of the range of narrow exemptions allowed in Resolution Conf. 10.10 (Rev. CoP17);
e. Measures necessary for establishing the comprehensive and enforceable regulatory systems should be planned in time for CoP18 and ideally implemented before the 2020 Tokyo Summer Olympics and Paralympics.

4. Until the above measures are implemented, the METI and MOE should take the following regulatory and enforcement measures to minimize illegal and unregulated domestic trade and stop any leakage from domestic stocks of whole tusks.
a. Upon 2018 enactment of amended LCES, the METI should conduct screening of notified businesses before granting registrations, especially for antiques dealers, and:
i. Decline registration for businesses that are found to have incomplete trade records;
ii. Scrutinize the trade records of those who have been alleged to have conducted illegal trading of unregistered tusks or a violation of mandatory business requirements to check for any possible links to illegal international trade.
b. The MOE should conduct regulatory reforms or introduce new legislation to:
i. Conduct mandatory registration of all ivory tusks in private possession with a set timeline (e.g. one year), after which no new registration of tusks will be allowed;
ii. Establish traceability and marking mechanisms for registered tusks, with a limited time window for trade, after the completion of mandatory registration. Such trade should only be allowed through designated platforms by designated ivory businesses.

Excerpts from Resolution Conf. 10.10 (Rev. CoP17)
Regarding trade in elephant specimens
3. RECOMMENDS that all Parties and non-Parties in whose jurisdiction there is a legal domestic market for ivory that is contributing to poaching or illegal trade, take all necessary legislative, regulatory and enforcement measures to close their domestic markets for commercial trade in raw and worked ivory as a matter of urgency;
4. RECOGNIZES that narrow exemptions to this closure for some items may be warranted; any exemptions should not contribute to poaching or illegal trade;
5. URGES those Parties in whose jurisdiction there is a legal domestic market for ivory that is contributing to poaching or illegal trade and that have not closed their domestic ivory markets for commercial trade in ivory to implement the above recommendation as a matter of urgency;
6. FURTHER URGES those Parties in whose jurisdiction there is an ivory carving industry, a legal domestic trade in ivory, an unregulated market for or illegal trade in ivory, or where ivory stockpiles exist, and Parties designated as ivory importing countries, to ensure that they have put in place comprehensive internal legislative, regulatory, enforcement and other measures to:
a) regulate the domestic trade in raw and worked ivory;
b) register or license all importers, exporters, manufacturers, wholesalers and retailers dealing in raw or worked ivory;
c) introduce recording and inspection procedures to enable the Management Authority and other appropriate government agencies to monitor the movement of ivory within the State, particularly by means of:
i) compulsory trade controls over raw ivory; and
ii) comprehensive and demonstrably effective stock inventory, reporting, and enforcement systems for worked ivory;
d) engage in public awareness campaigns, including supply and demand reduction; drawing attention to existing or new regulations concerning the sale and purchase of ivory; providing information on elephant conservation
challenges, including the impact of illegal killing and illegal trade on elephant populations; and, particularly in retail outlets, informing tourists and other non-nationals that the export of ivory requires a permit and that the import of ivory into their state of residence may require a permit and might not be permitted; and 
e) maintain an inventory of government-held stockpiles of ivory and, where possible, of significant privately held stockpiles of ivory within their territory, and inform the Secretariat of the level of this stock each year before 28
February, inter alia to be made available to the programme Monitoring the Illegal Killing of Elephants (MIKE) and the Elephant Trade Information System (ETIS) for their analyses, indicating the number of pieces and their weight
per type of ivory (raw or worked); for relevant pieces, and if marked, their markings in accordance with the provisions of this Resolution; the source of the ivory; and the reasons for any significant changes in the stockpile
compared to the preceding year.

Read full report: TRAFFIC+report_Ivory+Towers_web