Compliance Measures
In addition to observing laws, regulations and rules, compliance refers to the act of adhering to and fulfilling social norms. Hyakugo Bank believes that as a bank, whose most valuable asset is its credibility, enhancing its managerial soundness and solidifying society’s trust are natural principles of compliance, and each executive and employee must steadily put compliance into practice in the daily execution of duties.
To this end, the Hyakugo Bank has made compliance one of its highest management priorities and has been making efforts to bolster its compliance structure, while at the same time mitigate ethical and legal risks*.
Specifically, in addition to issuing the Compliance Manual that states fundamental guidelines for compliance within the Bank, we have created the Bank-wide Compliance Committee to discuss overall compliance measures. Furthermore, Hyakugo Bank has established the Compliance Management Division to conduct integrated supervision and promotion of compliance.
Moreover, compliance officers are assigned to all headquarters divisions, regional headquarters, branches and the Retail Banking Centers to prevent legal infractions and check the status of compliance. Furthermore, Hyakugo Bank is engaged in initiatives based on the Compliance Action Plan, which is formulated as a concrete action plan each year.
Hyakugo Bank will continue to reinforce its compliance structure going forward.
*
The risk of Hyakugo Bank having to assume liability for damages or the Bank losing its credibility as a result of Hyakugo Bank being held legally or morally culpable by clients, shareholders and other stakeholders, on account of directors and employees engaging in activities that violate laws, regulations, rules, social norms, etc. in the execution of their duties or Hyakugo Bank’s rules of procedures being in violation thereof.
Response to antisocial forces
1. Basic approach towards the elimination of antisocial forces
Hyakugo Bank has made it its basic policy to resolutely cut off and eliminate any relationships with antisocial forces to maintain public trust as a financial institution and ensure the appropriateness and soundness of its operations.
2. Current status of initiatives towards the elimination of antisocial forces
Hyakugo Bank has established the Customer Consultation Department, Compliance Division as the division responsible for cutting off relationships with antisocial forces and is engaged in the following initiatives. In addition, Managers to Prevent Unreasonable Demands have been assigned to all branches and Retail Banking Centers.
(1) We have clearly set out our policy as an organization in dealing with antisocial forces in the Regulation for
Responding to Antisocial Forces, and communicated throughout the Bank specific methods of responding to antisocial forces based on the Antisocial Forces Response Manual.
(2) For unreasonable demands, we have regularly built close cooperative relationships with specialized external
organizations such as the police, the National Center for Removal of Criminal Organizations and lawyers to ensure the safety of our employees.
(3) The division responsible gathers, manages and analyzes information on antisocial forces in an integrated
manner, while at the same time establishes and continuously update relevant databases.
(4) In an effort to cut off relationships with antisocial forces, we require our general managers at branches and
Retail Banking Centers to attend Seminars on Managers to Prevent Unreasonable Demands and also conduct in-house seminars, as necessary.
(5) We have incorporated the “clause on exclusion of antisocial forces” in our deposit terms and
conditions and other regulations, and carried out other concrete initiatives towards cutting off and eliminating antisocial forces from our transactions.
Management of conflicts of interest
In transactions that may pose a conflict of interest between Hyakugo Bank or its group companies and customers, and between customers of Hyakugo Bank or its group companies, Hyakugo Bank properly conducts business so as not to unfairly impair the interests of customers, in accordance with the Banking Act, the Financial Instruments and Exchange Act and other related laws and regulations.
“Transactions that may pose a conflict of interest” refer to transactions entered into by Hyakugo Bank or its group companies that “may unfairly impair the interests of customers.” “Conflicts of interest” refer to situations in which interests conflict between the Hyakugo Bank or its group companies and the customer, and the interests between the customers of Hyakugo Bank or its group companies. Companies subject to conflict of interest management are Hyakugo Bank and its group companies, namely Hyakugo Research Institute Company Limited and Hyakugo Securities Company Limited.
Hyakugo Bank appropriately manages conflicts of interest by identifying transactions that are subject to conflict of interest management.
Pursuant to laws and regulations, Hyakugo Bank also discloses its Guidelines on the Management of Conflicts of Interest by posting them on its website and at its branches.
Response to the financial alternative dispute resolution (ADR) system
Hyakugo Bank has concluded a contract regarding procedures for handling customer complaints and procedures for dispute resolution with the Japanese Bankers Association, which is the designated dispute resolution institution as defined in the Banking Act.
Contact: Advisory Office, Japanese Bankers Association
Phone: 0570-017109 or 03-5252-3772
Initiatives for Anti-Money Laundering and Counter Financing of Terrorism, etc.
Financial institutions face the risk of day-to-day transactions being used for money laundering, financing of terrorism, or financial crimes due to the nature of their business. As the threat of terrorism grows around the world, money is increasingly transferred over greater distances, and globalism in money transferring increases, there is a rising interest in the measures being taken by financial institutions to combat these risks.
With this background, the Hyakugo Bank Group carries out effective initiatives for combatting money laundering and the financing of terrorism in order to comply with related laws and regulations such as the Act on Prevention of Transfer of Criminal Proceeds and the Foreign Exchange and Foreign Trade Act and to enable the Group to respond to constantly changing risks. Through this, the Group lives up to the trust vested in it as a financial institution.
Initiatives for preventing money laundering and the financing of terrorism, etc.
Policy on Anti-Money Laundering and Counter Financing of Terrorism
Hyakugo Bank has defined the following basic policy for Anti-Money Laundering and Counter Financing of Terrorism (hereinafter referred to as “AML/CFT”) .
1 Operation policy
Hyakugo Bank has positioned AML/CFT as one of its most critical business issues. The Bank constantly reviews and improves its activities aimed at the establishment of an effective risk management system, and coordinates closely with related authorities both inside Japan and overseas, living up to the trust vested in it as a financial institution.
2 Organizational structure
Hyakugo Bank has designated the officer in charge of the Compliance Management Division as the manager responsible for AML/CFT and the AML/CFT unit of the Compliance Management Division as the division responsible for AML/CFT. The Bank coordinates with each division to implement AML/CFT measures.
3 Risk-based approach
Hyakugo Bank uses a risk-based approach to identify and evaluate risks related to AML/CFT. faced by Hyakugo Bank based on external information such as the National Risk Assessment of Money Laundering and Terrorist Financing issued by the National Public Safety Commission and implements mitigation measures commensurate with these risks.
4 Economic sanctions and asset freezing
Hyakugo Bank uses filtering, etc. to eliminate transactions with targets of economic sanctions, etc. It also has in place a system for carrying out appropriate confirmation related to measures for freezing assets, etc.
5 Reporting of suspicious transactions
Hyakugo Bank appropriately deals with customers, transactions, etc., detected as suspicious activity by reports from branches, etc., or monitoring by the headquarters, and promptly reports suspicious transactions to the authorities.
6 Prohibition of anonymous accounts and accounts opened under false names
Hyakugo Bank does not perform transactions involving highly anonymous accounts or accounts opened under false names.
7 Policy regarding the management of correspondent agreement parties
Hyakugo Bank gathers sufficient information regarding correspondent banks, appropriately evaluate them, and implement appropriate handling measures based on correspondent party risk.
Furthermore, Hyakugo Bank discontinues all transactions with fictitious banks that are not engaged in actual banking business, and with all banks that have transactions with fictitious banks.
8 Training for executives and employees
Hyakugo Bank strives to deepen knowledge and understanding of executives and employees and to secure and develop employees with specialization and aptitude commensurate with their roles through its system of continuous, systematic training regarding AML/CFT.
9 Compliance status review and auditing
Hyakugo Bank has the division responsible for AML/CFT, regularly implement reviews and improvements regarding the Bank’s system for AML/CFT, as well as conducts reviews and improvements as appropriate when review is deemed necessary by the manager responsible for AML/CFT. Furthermore, an independent internal audit division performs regular audits, and the Bank makes further improvements of the system based on the results of the said audits.
10 Foreign currency transactions
When handling foreign currency transactions, Hyakugo Bank not only complies with Japanese laws and regulations, but also takes into consideration related overseas regulations, etc. in order to eliminate the risk of the said transactions being improperly used for purposes such as money laundering, etc. Furthermore, the Bank establishes a system to continuously improve and reinforce its handling of foreign currency transactions. To this end, the Bank carries out measures for mitigating the risks of the said transactions, actively collects information regarding the external environment, and assesses risks in a timely and appropriate manner, among others.
11 Group company management
Hyakugo Bank shares the information it has itself gathered and analyzed regarding AML/CFT as needed with each company of the Hyakugo Bank Group and works for AML/CFT throughout the Group.