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: Internal Control Programs. 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 businesses.
Also, the Master Policy on Legal and 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 and 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 to the Audit and Compliance Committee the task of reviewing 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 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 and conducts compliance checks and 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 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, 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 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 the execution of the Advisory and Governance Agreement and the review of compliance at the Compliance Conference with Group companies to maintain and enhance corporate identity 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 to ensure thorough understanding of new laws and regulations and key compliance issues, as well as appropriate responses.
The Bank strives to ensure awareness of the importance of compliance throughout the Bank by taking advantage of opportunities such as training sessions for new employees and business training programs to present pertinent issues.
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, in principle, makes it a rule to confirm 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 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 client, the Executive Officer in charge of compliance and governance shall decide on the necessary response plan with regard to the business transactions with such client.
With regard to 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 assigned to deal with matters relating to the prevention of possible anti-social elements, it comprehensively manages all information related to anti-social elements held by the Bank.
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 of 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 withdrawal, based on certain parameters. The Legal and Compliance Division supervises the Bank’s anti-money laundering and anti-terrorist 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.
