Legal and Compliance Management System
Master Policy on Legal and Compliance
The Bank is committed to establishing a corporate culture which places a high priority on the achievement of global best practices, on ensuring regulatory compliance with relevant laws and regulations, adherence to internal requirements and legitimate and appropriate conduct of business.
We have formulated The Code of Conduct & Ethics which comes under the Master Policy: The Fundamentals of Establishing an Internal Control System. The Bank confirms that all management and employees shall be responsible for reading and understanding The Code of Conduct & Ethics and acknowledge such understanding by signing it annually to ensure compliance with such guidelines in conducting our business.
Also within the Master Policy: Legal & Compliance establishes a framework to evaluate and mitigate the risks associated with laws and regulations that affect virtually all areas of our business. Detailed Policies & Procedures regarding legal and compliance issues are established under the Master Policy. The Board of Directors approves and verifies the Compliance Program annually as it contains specific action plans regarding training, initiatives, and the updating of policies and procedures, as well as compliance guidelines.
Legal and Compliance Management Program
The Board of Directors delegates the Audit and Compliance Committee to review the appropriateness and effectiveness of the internal control program including legal and compliance, and also appoints an Executive Officer in charge of Compliance and Governance, who is responsible for establishing a legal and compliance management program and ensuring legitimate and appropriate conduct of business.
The Legal and Compliance Division, supervised by the Executive Officer in charge of Compliance and Governance, develops and improves the legal and compliance management program and conducts compliance checks and consultation on relevant legal issues, including review and authorization of contracts.
Each division and branch has a Compliance Leader, who is responsible for providing consultation services, increasing awareness of compliance-related issues and responding to irregularities in the relevant division or branch.
As part of the program to foster a transparent and fair corporate culture, and also to maintain and improve the workplace environment in accordance, the Bank has an Aozora Hotline Whistle-Blower Program, which allows employees to report possible violations of policies and procedures directly to directors and corporate auditors. The Bank also has the Compliance Monitoring Program, which includes an e-mail questionnaire to staff, enabling the General Manager of the Legal and Compliance Division to independently communicate with employees on compliance issues. The Bank ensures comprehensive adherence to the groupwide legal and compliance management program through executing the Governance and Advisory Agreement and reviewing compliance at the Compliance Conference with Group companies to maintain and enhance corporate identity across the entire Aozora Bank Group.
Compliance Training and Awareness Program
Training programs for General Managers and Compliance Leaders are conducted semiannually to ensure thorough understanding of new laws and regulations and the key compliance issues, as well as appropriate responses.
The Bank also strives to ensure awareness of the importance of compliance throughout the Bank by taking various opportunities, such as during new employees’ training and at business training programs to do so.
Anti-Money Laundering & Anti-Terrorism Financing Policy
Aozora Bank has formulated policies and procedures for the prevention of money laundering and the financing of terrorism, which contain guidelines for conducting proper customer identification, the monitoring of account activity, and the reporting of suspicious transactions.
To prevent illegal use of accounts, the Legal and Compliance Division has enhanced verification procedures for the opening accounts for non face-to-face transactions with additional customer identification procedures in order to prevent illegal use and monitors transactions, such as wire transfers and cash withdrawals, based on certain parameters.
The Legal and Compliance Division supervises the Bank’s anti-money-laundering and anti-terrorist-financing program. The division also conducts extensive training of new hires and client contact staff for the Corporate and Retail Banking groups of the Bank.
Prevention of Anti-Social Elements
Before entering into business with any new and prospective customer, Aozora Bank, in principle makes it a rule to confirm whether such customer in any way related to so-called anti-social elements or not, for the purpose of preventing any transactions with possible or anti-social elements, and in the case of clients the Bank has business relationships continuously or repeatedly, regular checks are required to be conducted at least once a year. In the event we find any information related to possible anti-social elements with respect to a certain clients, the Executive Officer in charge of Compliance and Governance shall decide on the necessary response plan with regard to the business transaction with such a client.
With a view to sharing information and promoting various measures for the prevention of anti-social elements, a Liaison Meeting for Responding to Anti-Social Elements is to be held quarterly, consisting primarily of Senior Executive Officers, and their report shall be presented to the Management Committee and the Audit and Compliance Committee.
The Legal and Compliance Division serves as secretariat for the Liaison Meeting for Responding to Anti-Social Elements and as the division assignld to deal with the matters relating to the prevention of possible anti-social elements, it comprehensively manages all information related to anti-social elements held by the Bank.
Legal Check and Review
A legal check and review by the Legal and Compliance Division is required in advance when introducing and implementing new businesses requiring verification from a legal and compliance perspective. The Bank also utilizes external law firms to ensure that the Bank is adhering to the legal and regulatory requirements of external laws, regulations and authorities, as well as internal policies and procedures.
