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 White paper on crime 2003 Part 1/Chap.2/Sec.5 

Section 5 Offenses by Mentally Disabled Persons

  Under the Law Concerning Mental Health and Welfare of Mentally Disabled Persons (hereinafter referred to as the "Mental Health and Welfare Law" in this section), "mentally disabled persons" refers to any person who suffers from schizophrenia, an acute poisoning by mental functional drugs, addiction to mental functional drugs, intellectual disability, personality disorder, and other mental disabilities.
  Article 39 of the Penal Code stipulates as follows: (a) when insane persons commit criminal acts, they shall not be punished; (b) when quasi-insane persons commit criminal acts, they shall be given a reduced sentence. Therefore, in criminal trials, persons who, due to mental disability, are unable to discern between right and wrong of their own actions, or who have such discernment but are unable to act on it, are treated as insane persons and should therefore not be punished. Also, persons whose ability of discernment or ability to act on such discernment is extremely limited are treated as quasi-insane persons, and their punishment is mitigated accordingly.
  On July 10, 2003, the Act on Medical Care and Treatment for Insane or Quasi-insane Persons Who Have Caused Serious Case (Law No. 110 of 2003) was enacted. The purpose of this Law is to provide proper and continuous medical treatment and to implement observation and guidance necessary to secure the medical treatment, with the aim of improving their disease, preventing the recommitment of similar serious offenses, and of promoting their social rehabilitation.
  Under this Law, where a person who has committed a serious offense such as homicide, robbery, rape, bodily injury, and arson is (i) not prosecuted on the ground of being insane or quasi-insane, or (ii) found, by final and conclusive judgments, not guilty on the ground of being insane or given a mitigated sentence on the ground of being quasi-insane (excluding the case of sentence without suspension), a collegiate body in a district court consisting of a judge and a mental health examiner (psychiatrist) shall, on application of a public prosecutor, hold a trial with regard to the necessity of medical treatment (by hospitalization or as outpatient) and the details of such treatment, and make a decision on these matters based on an agreement between the two.
  A person who is given a decision of hospitalization (decision to hospitalize the person for medical treatment) shall be hospitalized in a designated medical institution and receive detailed and specialized treatment. During the period of hospitalization, the probation office shall make arrangements for the person's living conditions after the discharge from the hospital. A person who is given a decision of outpatient treatment (decision to have the person receive outpatient treatment) or is allowed discharge from the hospital shall, for 3 years in principle, go to a designated medical institution to receive outpatient treatment and be subject to mental health supervision by the probation office (rehabilitation officer).
  The Law was promulgated on July 16, 2003, and except for some provisions, it will enter into force on the date determined by a Cabinet Order within 2 years from the date of promulgation.