Compliance
Compliance Structure
The Bank has the Compliance Management Division as the supervising division for compliance, and a Legal Division that appropriately manages legal risk in its diversified business. These divisions develop internal rules regarding compliance risk and legal risk management. As a specific action plan to realize our compliance framework, the Compliance Management Division develops annual compliance programs that are designed to deepen compliance awareness among the Aozora Group’s officers and employees, in addition to periodically conducting seminars and e-learning to maintain and improve compliance awareness. Progress and achievement status are reported to the Audit and Compliance Committee and the Board of Directors on a semi-annual basis. Aozora has established a “Code of Ethics and Conduct” (refer to the Financial and Corporate Data Section) that every officer and employee must remain in compliance with. All officers and employees of the Aozora Group, including group companies, pledge on an annual basis that they understand and comply with the Code of Ethics and Conduct.
Social norms, common sense, and the expectations for financial institutions are constantly changing due to factors such as the expansion of digitalization in society and hybrid work styles that took hold during the COVID-19 pandemic. Aozora continues its effort to develop new products and services in order to realize sustainable growth in the Group’s business. If the Aozora Group fails to properly respond to changes in the external environment and business conditions, its business operations and transactions may be deemed to be in violation of laws and regulations, social norms, business practices and market conventions, or regarded as corporate activities lacking common sense, including from the perspective of customers, which could damage the Group’s corporate value. To avoid any damage to our corporate value, the Aozora Group will continue to comply with all laws and regulations applicable to our business operations, conduct sensible corporate activities based on social norms and common sense, and strive to further improve our compliance/risk management framework to respond to a wide range of changes in the environment.
Elimination of Anti-social Elements
The Aozora Group clearly states in the “Basic Policy on the Elimination of Anti-Social Elements” (refer to the Financial and Corporate Data Section) that the Group steadfastly confronts any anti-social elements that pose a threat to public order and safety while ensuring that it categorically blocks any relationship with such elements.
Aozora has established and maintains close cooperative relationships with outside specialized agencies, including law enforcement agencies, Anti-Organized Crime Campaign Center of Tokyo, and attorneys. In addition, we refuse to perform any action that may serve to provide income/funding for anti-social elements, including but not limited to backdoor transactions, monetary contributions/membership fees, and subscribing to informational magazines.
Anti-money Laundering Initiatives
The Aozora Group is aware that preventing financial crimes, including money laundering, financing of terrorism and proliferation financing, and responding to economic sanctions under the Foreign Exchange and Foreign Trade Act (“Anti-Money Laundering Measures”) are important issues facing the global financial system. We have established a framework to comply with domestic and international laws, regulations and rules, while also making an ongoing effort to further strengthen our Anti-Money Laundering Measures.
For example, Aozora has developed internal policies and an organizational structure, which includes the establishment of a Financial Crime Management Office as a department overseeing anti-money laundering issues, while conducting a review as needed to ensure their effectiveness. We also provide training for officers and employees regarding the prevention of financial crimes and the response to economic sanctions under the Foreign Exchange and Foreign Trade Act. In addition, we ensure that we verify the identity of customers and the purpose of their transaction at the time of account opening, which is followed by the ongoing monitoring of our customer transactions. Additionally, we have developed an internal structure that allows for immediate reporting to the relevant authorities regarding any suspicious transactions detected by our daily monitoring processes.
Anti-bribery Initiatives
The Aozora Group has announced the “Basic Policy on Anti-bribery”, which prohibits all of Aozora’s officers and employees from giving, offering or promising improper corporate hospitality, gifts and other benefits to public officials, etc. in any country as well as from giving or receiving excessive corporate hospitality, gifts or other benefits beyond socially-acceptable limits. In addition, we continue to provide opportunities for all officers and employees to learn more about our anti-bribery policy.
Whistle-blower Program
By exercising the Aozora Group’s self-monitoring function, the Bank works to ensure early detection and correction of legal violations and misconduct to prevent the occurrence of any scandal. To this end, in addition to the job-related reporting line, we have established a whistle-blower program called “Aozora Hotline Program”* in order to foster a clean, open, and fair corporate culture within the Aozora Group.
The Aozora Hotline Desk inside the Compliance Management Division and the HR Division’s dedicated point of contact for harassment serve as the internal contact for whistle-blowers, while an outside law firm acts as the outside contact. It is also possible to make reports to our Standing Audit & Supervisory Board member. This program is available to all officers and employees working for the Bank or its group companies (including rehired retirees, contract employees, part-timers, and temporary staff) as well as to all officers and employees within one year of retirement.
The Bank strives to create an easy-to-use environment regarding the whistle-blower program. It allows for anonymous reporting. In addition, all officers and employees are provided with a small-sized card that includes the dedicated e-mail address and telephone number of the contact point and instructions on how to make a report, as well as a special postal envelope addressed to the contact point outside the Bank.
The identity of a whistle-blower is kept strictly confidential, and any information that is related to the whistle-blower’s complaint or could identify the whistle-blower is tightly controlled. Those who divulge such secrets are subject to disciplinary action and other strict measures in accordance with the Human Resources Manual. Whistle-blowers do not receive any unfavorable treatment for making a report.
If any violation of the law or misconduct is confirmed as a result of whistle-blower investigations, the Bank will promptly take corrective and preventive measures. All officers and employees are obligated to cooperate with investigations.
In FY2022, there were no whistle-blower cases that had a significant impact on the management of the Aozora Group.
* For the number of reports received, please refer to “Non-financial Information Index: Compliance”.
Whistle-Blower Reporting and Processing System
Tax Compliance
The Aozora Group recognizes that complying with tax laws and properly paying tax liabilities in all countries where it conducts business are part of our social responsibilities as a business entity. As such, we have developed the "Aozora Bank Group Tax Compliance Policy", as a way to raise awareness of tax compliance among the Group's officers and employees.