JAPAN Law and Practice Contributed by: Tomoyuki Tanaka and Henry Tan, Anderson Mori & Tomotsune
the bank’s sustainable corporate growth and corporate value. 4.2 Registration and Oversight of Senior Management Under the Banking Act, a local bank must file a notification with the Prime Minister when a director representing the local bank or a direc - tor engaging in the ordinary business of the local bank is appointed or resigns. Under the Banking Act, directors and executive officers engaging in the ordinary operation of a local bank must have both sufficient social credibility and the requisite knowledge and experience to manage and oper - ate the bank appropriately, fairly and efficiently. Under the Banking Act, a director who is engaged in the ordinary operation of a local bank may not engage in the ordinary operation of any other company without the authorisation of the Prime Minister. The authorisation will not be granted unless the Prime Minister is of the view that the double-hatting is unlikely to interfere with the sound and appropriate management of the local bank. 4.3 Remuneration Requirements The Banking Act does not contain express stipulations with respect to matters of remu - neration. Nevertheless, in line with discussions at the Financial Stability Board (the “FSB”), the Guidelines impose general requirements on local banks established in Japan and branches of foreign banks to establish systems that ensure appropriate remuneration of management and employees in light of the need to avoid exces - sive risk-taking. Furthermore, under the Banking Act, all local banks must disclose matters concerning remu - neration in their business reports, including:
• the internal committee or governance body that determines or otherwise supervises the determination of remuneration; • matters concerning the evaluation of remu - neration systems and the operation of these systems; • consistency between remuneration systems and risk management and performance- linked remuneration; and • other matters concerning remuneration sys - tems. A listed bank is required under the FIEA to pub - licly disclose the remuneration given to each of its directors if the aggregate annual remunera - tion of directors exceeds JPY100 million. The Act on Prevention of Transfer of Criminal Proceeds (the “APTCP”), which is the primary legislation regulating AML and CFT, requires local banks to conduct the following due dili - gence on customers. Verification at the Time of Transaction The APTCP requires local banks to verify the fol - lowing items at the time of specific transactions. • The identity of customers, including their names, domiciles and dates of birth. • The purpose of the relevant transaction. • Customers’ occupations (for natural persons) and the nature of their businesses (for juridi - cal persons). • Information on the beneficial owner(s) of customers (for juridical persons) by verify - ing documents of identification presented by customers. 5. AML/KYC 5.1 AML and CFT Requirements
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