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Japanese banking law impedes U.S. use of direct deductions

Servicemembers moving off base — who need Japanese bank accounts to pay for keeping the lights on in their new homes — could be left in the dark unless the Japanese government comes up with a bright idea.

A new Japanese anti-terrorism law is making it virtually impossible for Department of Defense military and civilian employees to open the type of checking account commonly used to make automatic utility payments, including for electricity, propane and cellular phones.

But officials in the Japanese government’s Financial Services Agency said they’re already working to ease the problem. Also, off-base residents still can pay such bills at Japanese post offices or convenience stores.

Earlier this year, Japan — prompted by the 2001 terrorist attacks on New York and the Pentagon — quietly implemented the “Identification of customers by financial institutions” law.

“It became an international issue because accounts can be used for movement of funds by terrorists and for money laundering,” said an FSA spokesman in Tokyo, who asked that he not be identified.

Any Japanese bank account opened before Jan. 6 is not affected, the FSA official said.

As a courtesy, some Japanese banks permitted opening of accounts allowing convenient automatic payment of such utilities like electricity, propane and telephone services.

However as a precaution, such accounts now are being offered only to those with official Japanese identification giving the account holder’s address — which Department of Defense military and civilian identification cards don’t include.

The Japanese government is studying how to ease the problem, said the Financial Services Agency official.

“It was taken as a precaution, but there’s a backlash for those stationed here,” said Col. Richard Howell, 35th Support Group commander at Misawa.

Howell said another inconvenience that surfaced because of the new law affects non-account holders who exchange dollars for yen at Japanese banks.

“You get a fractionally better yen rate through a bank if you hold an account,” he said.

To open an automatic deduction account under the new law, Japanese citizens must produce a Japanese driver’s license, health insurance card or proof of resident registry. Non-Japanese residents must produce an alien registration card, the FSA official said.

Each non-Japanese resident must have and carry an alien registration card — unless they’re in Japan under the status of forces agreement.

On Okinawa, a Bank of the Ryukyus spokeswoman said the new, stepped-up ID verification requirement would not affect SOFA personnel because regulations there always have prevented SOFA members from opening accounts that provide automatic deduction services.

“As of January 6, we were advised to more thoroughly check the identification of a new depositor, but this requirement applies to everyone including Japanese citizens,” said Aya Haemori at the bank’s Certificate and International Transaction Department.

Howell added no one has contacted him directly complaining about the current bank restrictions.

“I’ve heard some rumors; people saying they had concerns, but it was because they didn’t understand the policy,” he said.

A Bank of America spokesman in Okinawa said the off-base account issue is not affecting bank operations at bases in mainland Japan and Okinawa.

Base banks will be able to fulfill any additional need for yen the new Japanese banking law creates, said Tom Ryan, Pacific theater manager.

“We have no problem meeting the yen needs of customers,” he said. “If they bring us the dollars, we can provide the yen.”

— Chiyomi Sumida contributed to this report.


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