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 to ensure compliance with relevant laws and regulations, and to ensure legitimate and appropriate conduct of business. We have formulated the Code of Conduct & Ethics, which comes under the Master Policy: Internal Control Programs which are decided by the Board of Directors. The Bank confirms that all management and employees are 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 businesses.
Furthermore, the Bank established the Master Policy on Legal and Compliance as a framework for evaluating the risks related to various laws and regulations with which the Bank should comply to prevent these risks.
Detailed policies and procedures regarding legal and compliance issues are established under the Master Policy. The Board of Directors approves and verifies the compliance program annually which 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 to the Audit and Compliance Committee the task of reviewing the appropriateness and effectiveness of the internal control program including legal and compliance matters, and also appoints an Executive Officer in charge of compliance and governance, who is responsible for establishing a Bank-wide legal and compliance management program and ensuring legitimate and appropriate business conduct.
The Legal and Compliance Division, supervised by the Executive Officer in charge of compliance and governance, develops and improves legal and compliance management programs, conducts checks and reviews of specific business matters from a compliance perspective, conducts training and promotes awareness of compliance-related issues, establishes policy and procedure as well as conducts consultations on relevant legal issues, including the 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 and assessing compliance related matters in the relevant division or branch.
For the purpose of fostering a transparent and fair corporate culture, and maintaining and improving the workplace environment, the Bank has the Aozora Whistleblower Hotline 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 enables the General Manager of the Legal and Compliance Division to independently communicate via e-mail questionnaires with employees on compliance issues. The Bank ensures comprehensive adherence to the Group-wide legal and compliance management program through the execution of the Advisory and Governance Agreement and the review of compliance at the Compliance Conference with its subsidiaries to enhance the corporate brand across the entire Aozora Bank Group.
Legal and Compliance Management System
Compliance Training and Awareness Program
Training programs for General Managers and compliance leaders are conducted by the Legal and Compliance Division to ensure thorough understanding and awareness of new laws and regulations and key compliance issues. The Bank strives to ensure awareness of the importance of compliance through various opportunities such as training sessions for new employees and business training programs. The Bank also has an e-learning site offering appropriate programs in a timely manner.
Prevention of Anti-Social Elements
Before entering into business with any new or prospective customer, the Bank confirms whether the customer is in any way related to so-called anti-social elements, for the purpose of preventing any transactions with such clients. Where the Bank has ongoing business relationships with a client, regular checks are conducted at least once a year. In the event we find any information related to possible anti-social elements with respect to a certain client, the Executive Officer in charge of compliance and governance makes the final decision on the necessary response, prepared by the division responsible, with regard to transactions with such a client.
For the purposes of sharing information and promoting various measures for the prevention of anti-social elements, the Anti-Social Elements Monitoring Meeting is held quarterly, consisting primarily of business group heads, and their report is presented to the Management Committee and the Audit and Compliance Committee.
The Legal and Compliance Division serves as secretariat for the Anti-Social Elements Monitoring Meeting and as the division in charge of dealing with matters relating to the prevention of possible anti-social elements, it centrally manages all relevant information held by the Bank.
Anti-Money Laundering and Anti-Terrorism Financing Policy
Aozora Bank has formulated procedures and manuals, which contain guidelines for conducting proper customer identification, the monitoring of account activity, and the reporting of suspicious transactions, for the prevention of money laundering and the financing of terrorism.
To prevent illegal use of accounts, the Legal and Compliance Division enhanced the verification procedures for the opening of accounts for non face-to-face transactions with additional customer identification procedures, identified unusual transactions, such as wire transfers and cash withdrawal, based on certain parameters, and conducted monitoring.
The Legal and Compliance Division supervises the Bank’s anti-money laundering and antiterrorist financing program. It also conducts extensive training of new hires and customer relationship managers for the Corporate and Retail Banking groups of 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 it is adhering to the legal and regulatory requirements of external laws, regulations and authorities, as well as internal policies and procedures.
