Compliance
Rakuten's Approach
Comprehensive compliance measures are crucial for realizing sustainable growth for the Rakuten Group and our 70+ businesses in Japan and around the world. One of our Brand Concepts – part of the Rakuten Shugi – reads Behave Ethically: Integrity. In the Rakuten Group Code of Ethics, we have cemented our commitment to maintaining a high ethical standard while conducting business with integrity. We strive to adhere to the law, international rules, and internal regulations and fulfill our social responsibility as a global leader to empower people and society.
Management System
To ensure strong compliance management across the Rakuten Group, we have appointed a CCO (Chief Compliance Officer) to oversee overall Group-wide compliance
under the leadership of the COO (Chief Operating Officer). We have also appointed a Co.-CO (Company Compliance Officer) in each company and a Biz.-CO (Business
Compliance Officer) in each business who work to strengthen Group-wide compliance systems by liaising with the CCO, promoting compliance programs and monitoring
their effectiveness.
Under this framework, the Rakuten Group has employed a risk-based approach to define high-risk issues and implement a variety of
measures under the Group Compliance Program. These include the prohibition of bribery and corruption; the prevention of money laundering and terrorist
financing; compliance with antitrust, competition, and other industry laws; the elimination of antisocial forces; the improvement of Group-wide compliance
education; and monitoring of implementation.
The Group Risk and Compliance Committee meets quarterly to identify risks related to laws and regulations that
may hinder the implementation of management strategies; to promote effective compliance throughout the Group; to share best practices; to propose and build
consensus on compliance measures; and report on and discuss the status of the Group Compliance Program.
The Board of Directors receives regular reports
from the CCO on the progress and results of these compliance measures and oversees overall compliance across the Group.
Rakuten Group Regulations
Rakuten Group Regulations (RGR) comprise a set of common rules across the Rakuten Group. RGR were established with the aim of ensuring that all
employees and executives adhere to the highest ethical standards, and that effective corporate governance is in place in order to maximize corporate
value.
The RGR consist of guidelines covering important areas such as the Rakuten Group Code of Ethics, the core values of the Rakuten Group
(Rakuten Shugi), legal compliance, labor practices, information security, quality management, sustainability and more. Group-level rules are completed
by company-specific regulations to address the specificities of each service when necessary.
In addition, Group-wide audits are conducted on a wide
range of topics, including legal compliance, human rights related to labor practices and information security, to confirm compliance with the Rakuten
Group Code of Ethics, a part of the RGR.
RGR are periodically reviewed and revised to respond to the development of our business and changes in the
business environment and to meet the expectations of our stakeholders and society at large.
Example of topics included in the RGR
- Prohibition of bribery and corruption
- Risk management
- Intellectual property
- Accounting
- Labor
- Information security
- Product and service quality
- Marketing and advertising
- Procurement
- Sustainability (human rights/the environment)
- Corporate culture
Raising Employee Awareness
To ensure thorough compliance across the entire Rakuten Group, every employee must be aware of and correctly understand business ethics, laws, and internal regulations. We provide regular compliance training to all executives and employees to achieve this. Specifically, we promote awareness of compliance topics, including the RGR, through Asakai, our weekly morning meeting attended by the entire company, and e-learning for all Rakuten Group employees. This e-learning is completed with compliance pledges, in which all Rakuten Group employees commit to complying with and adhering to social standards, laws, and regulations, as well as internal rules. In addition, we collect an annual compliance pledge from the upper management level employees in charge of Rakuten Group operations, including top management from Japan and around the world. The signature rate for the pledge is 100% among the management level.
Examples of training topics
- Prohibition of bribery
- Preventing harassment
- Sustainability
- Information security
- Preventing insider trading
- Handling antisocial forces
- Labor management
- Compliance with the Unfair Competition Prevention Act
- Compliance with the Act against Unjustifiable Premiums and Misleading Representations
- Preventing infringements on intellectual property
- Compliance with the Subcontracting Act
- Protecting privacy
- Data governance
- Whistleblowing channel
We also consider compliance to be an important factor in determining employee evaluation and compensation. At Rakuten, all employees are evaluated twice a year
based on their demonstrated competencies, and the results of their evaluation is reflected in their salary. These competencies and related behaviors, which are
clearly defined for each employee grade, include thorough practice of compliance, with employees expected to follow through on tasks while adhering to legal,
financial, sustainable, and operational rules and policies.
Finally, the Rakuten Awards, a global recognition system that acknowledges every month exceptional contributions made by employees within the Group, includes a
dedicated category called "Behave Ethically: Integrity“ to reward employees who demonstrate a strong commitment to acting in accordance with laws and regulations,
with honesty, sincerity and dignity in any given situation.
Reporting Channel
The Rakuten Group operates a whistleblowing channel called the Rakuten Hotline through which all Group employees – including contract employees and temporary
staff – can report illegal activity, violations of company rules and regulations, fraudulent acts, or other ethical misconduct to both internal and external
contacts.
The hotline is operated in compliance with the Whistleblower Protection Act and protects the confidentiality of those who consult or report to
the hotline and prohibits any disadvantageous treatment.
The Harassment Help Desk is also available specifically for reporting harassment-related
complaints, and to ensure that behavior constituting harassment is dealt with appropriately.
In addition to this, Rakuten also operates a Supplier Hotline,
through which Rakuten Group suppliers can make reports. See this page for more details.
All reported misconduct is investigated by a dedicated team for
substantiating reports, and feedback is provided to whistleblowers that includes a conclusion, resolution, and plans for improvement.
In all circumstances
where a breach is substantiated, those involved in misconduct will be subject to disciplinary action in accordance with the provisions of the employment rules
of the company.
Compliance Program
To continuously improve compliance initiatives and reduce compliance risks, Rakuten implemented a PDCA (plan-do-check-adjust) cycle called the Rakuten Group Compliance Program. The program consists of the following four steps:
(1) Identification of changes in the environment
(2) Identification/evaluation of risks
(3) Formulation/implementation of control measures
(4)
Evaluation of control measures.
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Identification of changes in the environment
Identify potential internal and external changes in the business environment that could impact business goals -
Identification/evaluation of risks
Identify the risks that these changes present, and evaluate based on the level of impact and probability of occurrence -
Formulation/implementation of control measures
Build a framework based on clear accountability, decision criteria, business processes, education and training, and monitoring -
Evaluation of control measures
Confirm whether the risk has been mitigated as a result of the compliance program
Prohibition of Bribery and Corruption
In recent years, global governments are raising their standards for corruption prevention, tightening controls on activities such as the inappropriate offering
of entertainment or gifts.
The Rakuten Group prohibits bribery as per the Rakuten Group Code of Ethics, and has established the Rakuten Group instructions
for the prohibition of corruption under the RGR. Based on national laws of various countries and international initiatives, these instructions prohibit corrupt
activities both in Japan and abroad and define policy on issues such as the offering of entertainment and gifts, donations and sponsorships, and political
contributions. To eliminate bribery and corruption, the Rakuten Group is also working to strengthen this framework through a variety of measures, including
requesting that clients adhere to commensurate instructions; establishing policies regarding the offering of entertainment and gifts to public servants and
other figures; reviewing our business processes regarding purchasing; raising awareness among Group companies of Rakuten Group's unified policies regarding
purchasing; and conducting training for employees of the Rakuten Group.
Based on the above policies, the Rakuten Group has also established the
Anti-Bribery and Corruption (ABC) Program – a compliance program to reduce the risk of corruption and maintain a high standard of ethics and business integrity.
The program includes the following initiatives.
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Risk evaluation
We conduct risk assessments to establish the risk of corruption in each Rakuten Group company. We also confirm that we are building and adhering to appropriate frameworks to address these risks. -
Education
To ensure thorough adherence to laws and regulations surrounding the prohibition of corruption and bribery, as well as the Rakuten Group's own regulations, we conduct regular e-learning training for all Rakuten Group employees and executives. -
Monitoring
We conduct regular monitoring of the operation of the ABC Program. The results of this monitoring help us to revise the program and maintain its effectiveness continually. -
Reporting
Rakuten Group employees are requested to report to the appropriate internal channel, such as the Rakuten Group's confidential whistleblowing channel when there has been a violation or suspected violation of laws and regulations or internal rules such as the Rakuten Group instructions for the prohibition of corruption. If a violation is discovered, we conduct a thorough internal investigation and cooperate with the investigations of relevant authorities.
Measures against Money Laundering, Terrorist Financing, Proliferation Financing, and Economic Sanction
As the global threat of organized crime and terrorism continues to grow, Rakuten is strengthening measures against international financial crime.
Because
the Rakuten Group operates a diverse range of services as part of the Rakuten Ecosystem, some Group services are at risk of being used for trading illegally
acquired funds. To address this risk, we have launched a compliance initiative called the Anti-Money Laundering/Combatting the Financing of Terrorism (AML/CFT)
Program, through which we have established frameworks to prevent money laundering.
We are preparing initiatives through these frameworks both in Japan and
abroad, and have defined a set of AML/CFT/proliferation financing/economic sanctions instructions under the RGR. These instructions form a management system for
handling issues surrounding AML, CFT, proliferation financing and economic sanctions, defining what is necessary to conduct business appropriately.
With
regards to Japan's Act on Prevention of Transfer of Criminal Proceeds, Rakuten Group companies and businesses are working to prevent the abuse of financial
services by organized crime by adhering to the relevant laws and regulations, authenticating at the point of transaction, and implementing management systems
for the recording and reporting of suspicious transactions.
Regular e-learning training on the AML/CFT program is also conducted for all Rakuten Group
employees.
Tax Compliance
Rakuten Group's mission is empowerment. By paying our fair share of taxes, we contribute to society and empower local communities and central governments to fund social, educational and cultural programs.
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We adhere to the requirements of the local tax legislation in all countries and regions we operate, as well as to international tax rules and policies,
with respecting both the letter and the spirit of each tax legislation.
- We file our tax returns and make tax payments in a timely and proper manner.
- We respect the spirit of relevant tax legislation when performing tax planning and we do not undertake tax structures without commercial substance.
- We do not invest in tax havens for the purpose of tax avoidance.
- We always apply the "arm's length" principle in our transfer pricing policies across the group, taking into account the latest guidelines from the OECD and the local authorities.
- We maintain an open and honest dialogue with the tax authorities.
- We pledge to respond to any tax violations by our employees or business partners of which we become aware in a serious and responsible manner.
Kenji Hirose, our CFO (Chief Financial Officer) who is a Group Executive Vice President, is responsible for tax policy, and the department in charge of tax periodically reports to the CFO.