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Content - SCCIJ Luncheon: "My Number", companies and privacy

  • December 11, 2015

SCCIJ Luncheon: "My Number", companies and privacy

Tokyo (SCCIJ) - "Is my privacy still safeguarded under the new 'My number' system?" was the lead question of the December Luncheon which was answered by speaker Ms. Masako Banno comprehensively in front of almost 50 members and guests of the SCCIJ. "My number" is the official name of the first ever personal identification number in Japan currently being introduced. Ms. Banno's presentation emphasized the practical approach for most firms to prepare for the implementation of the My Number system, as well as the amendment of the Act on Protection of Personal Information.

Luncheon speaker Ms. Banno

First national ID system

"My Number" has twelve digits and is used for taxation, pension, health insurance and other social security including unemployment insurance. "It can be compared to the Social Security Number in the United States", Ms. Banno said. Most Japanese citizens including children and foreign residents in Japan have already received a notice card for their personal "My number".  

As next step they will obtain a "My Number" card after January 2016. The card could become a substitute for driver's license or another ID card when used for identification. But except for the designated purposes, the number on the backside should not be shown to anybody, Ms. Banno clarified.

December SCCIJ Luncheon speaker Ms. Masako Banno (click to enlarge)

December SCCIJ Luncheon speaker Ms. Masako Banno (click to enlarge)

Long debate about privacy

The speaker summarized the long debate of the My Number system in Japan. During the Cold War era, there were concerns regarding the freedom of speech and suspicion of abuse by the government. Later, the main issue was the negligent leakage of data.  

But the public was finally persuaded to support the national ID system, or more simplified administrative process, going through some incidents, such as the scandal of Japan Pension Service in 2007 where it lost huge number of pension records, or  the Great East Japan earthquake in March 2011, when disaster victims had difficulty getting their pension or withdrawing money.

SCCIJ Executive Committee members and advisors with luncheon speaker Ms. Banno

SCCIJ Executive Committee members and advisors with luncheon speaker Ms. Banno

My Number for companies

In general, companies need to handle withholding tax or social insurance procedure on behalf of their employees or individual business partners including consultants or landlords. After My Number system is implemented as of January 1, 2016, those companies should add My Number of such people on the application forms to tax authorities or social insurance offices.  

In addition, companies with more than 100 employees or companies handling the personal data of more than 5,000 people are required to have some security control measures on an institutional, human, physical and technical level in place. Here are the recommendations of Ms. Banno on how companies should do this.  

For all companies handling My Number:

• Specify the staff in charge of My Number

• Specify the purpose to handle My Number, in particular carefully when you ask outside business partners for their My Number  

For Companies with the duty of security control measures :

• Make the most of your companies’ existing APPI program

• Create a brief security policy

• Make a brief internal rule of where to/how to keep/use My Numbers (restrain physical/technical access)

• Train the person in charge/ Divide authorities in order to prevent abuse  

There are criminal penalties not only on people who intentionally disclosed My Numbers, but also on their companies. The penalties are up to 4 years imprisonment and 2 million yen fine on the person and a 2 million yen fine on the company. Also, companies will be exposed to the dangers of civil responsibilities and reputation risks. Developing the security control measures helps you negate your negligent responsibility as a director or a manager, even when an unavoidable misconduct happens in your company, the speaker emphasized.

December SCCIJ Luncheon about the consequences of the "My Number" system

December SCCIJ Luncheon about the consequences of the "My Number" system

Amendment of APPI

The Luncheon speaker also analyzed the essential points of the upcoming amendments to APPI. First of all, there will be no exemption anymore for small and medium enterprises handling personal information of fewer than 5,000 people, which means all companies should be prepared for the amendment. Second, Personal Information Protection Commission will be established, and will enforce APPI as the central government authority.  

Furthermore, extra-territorial application of APPI regulates the transfer of personal information from Japan to foreign countries. Finally, anonymized information, or Big Data, will be more clearly differentiated from personal information, and will be used more flexibly, while it will be subject to certain regulation in order to protect the privacy of the owner of the initial personal information.  

Privacy protection

One of the aims of these measures is that Japan is recognized by EU as a country with an adequate level of privacy protection. At the moment, this is not the case. So Japanese companies need to sign on standard contractual clauses in order to get personal data from companies in EU countries, unless they are able to have consents from all of the owners of the personal information.  

The Government unofficially says that the APPI amendment will be fully implemented by January 2017, while the official schedule of implementation will be announced early next year. “This gives companies one year to prepare for this final step.” Ms. Banno said.  

Biography of the speaker

Ms. Masako Banno is an attorney at law of Okuno & Partners. She was admitted to the Japanese Bar in 2004 and the New York Bar in 2014. She handles wide variety of international corporate legal issues in particular focusing on governmental regulations including financial regulation, employment law or immigration law.  

From 2007 until 2009, she served as a legal counsel to Japan Securities Dealers Association, where she had first-hand experience in legal compliance and data protection of financial field, the strictest regulation among industries. Masako obtained her Global Business LL.M. degree at the University of Washington School of Law in 2012. She is Deputy Director-General of Tokyo Bar Association’s Gender-Equal Opportunities Committee.    

 

Text and photos: SCCIJ

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