I hereby give My Sanction to the Law regarding the Emergency Measures for Accounts of Financial Institutions, for which the concurrence of the Imperial Diet has been obtained, and cause the same to be promulgated.
Signed:HIROHITO, Seal of the Emperor
This fifteenth day of the eighth month of the twenty-first year of Showa (August 15, 1946).
Countersigned: Prime Minister YOSHIDA Shigeru
Minister of Justice KIMURA Tokutaro
Minister of Agriculture and Forestry WADA Hiroo
Minister of Commerce and Industry HOSHIJIMA Niro
Minister of Transportation HIRATSUKA Tsunejiro
Minister of Finance ISHIBASHI Tanzan
Law regarding the Emergency Measures for the Accounts of Financial Institutions August 7, 1946
Art.1. There shall be created in financial institutions at 00:00 o'clock August 11, 1946 (hereafter called designated hour) the new account and the old account as provided in this Law.
The assets and liabilities of financial institutions shall belong to the new account or to the old account as prescribed in the provisions of this Law.
Art.2. The following assets and liabilities of financial institutions out of those existing at the designated hour shall belong to the new account:
1. Assets:
(2) National bonds and local government bonds;
(3) Monetary claims on the state or local governments other than national bonds and local government bonds;
(4) Assets on the Bank of Japan, financial institutions or associations engaged in insurance business (with regard to debentures issued by financial institutions prescribed by Ordinance or drafts, checks and other similar assets, which are prescribed by ordinance, they shall be limited to those on which measures prescribed in the provisions of Article 3 or Article 4 have been taken;and
(5) Other assets designated by the competent Minister.
2. Liabilities:
(1) Deposits prescribed by Ordinance;
(2) Taxes and other public charges payable to the state or local governments.
(3) Liabilities other than deposits to the Bank of Japan, financial institutions or associations engaged in insurance business (with regard to debentures issued by financial institutions prescribed by ordinance or drafts, checks and other similar liabilities, which are prescribed by ordinance, they shall be limited to those on which demands for repayment or reposits have been received from the obligee financial institutions pursuant to the provisions of Article 3 or Article 4);
(4) Other obligations designated by the competent Minister.
Assets and liabilities among those listed in the preceding paragraph, designated by the competent Minister, shall belong to the old account, notwithstanding the provisions of the same paragraph.
Art.3. The Bank of Japan, financial institutions and associations engaged in insurance business shall take the following measures, according to the following items, with respect to financial debentures (hereinafter referring to debentures issued by financial institutions) prescribed by Ordinance held by them at the designated hour.
1. With respect to financial debentures which were registered at the designated hour pursuant to the Debentures, etc. Registration Law, to send a notice in writing of their type and amount to the obligor financial institution, before August 31, 1946.
2. With respect to financial debentures which were not registered at the designated hour pursuant to the Debentures, etc. Registration Law, to register them pursuant to the same Law and thereafter send a notice in writing of their type and amount to the obligor financial institution, before September 10, 1946.
Art.4. The Bank of Japan, financial institutions and other persons designated by the competent Minister shall demand repayment or send a notice in writing of the type and amount to the obligor (payer of checks included) before August 31, 1946 with respect to drafts and other assets (hereinafter referring to drafts, checks and other similar assets prescribed by Ordinance) on the Bank of Japan, financial institutions and other persons designated by the competent Minister, held by them at the designated hour.
Art.5. The assets and liabilities of financial institutions existing at the designated hour other than those which belong to the new account pursuant to the provisions of Article 2 shall belong to the old account.
Art.6. Special exceptions to the provisions of Article 2 and the preceding Article may be provided by Ordinance regarding which assets and liabilities, at the designated hour, of trust companies, insurance companies, Central Life Insurance Corporation, Central Non-Life Insurance Corporation, local agricultural associations and other financial institutions prescribed by Ordinance belong to the new account or to the old account.
Art.7. If the total liabilities of financial institutions belonging to the new account at the designated hour exceeds the total assets belonging to the new account, such excessive amount shall be entered on the account as a credit of the new account against the old account.
If the total assets of financial institutions belonging to the new account at the designated hour exceeds the total liabilities belonging to the new account, such excessive amount shall be entered on the accounts as a debit of the new account against the old account.
Art.8. Financial institutions shall prepare a statement of the assets belonging to the new account at the designated hour and have it certified by a public notary before the date prescribed by Ordinance.
The provisions in the Public Notary Law regarding the certification of Articles of Incorporation pursuant to the provisions of Article 167 of the Commercial Code (except the provisions of Article 62 (2) of the Public Notary Law) shall apply to the certification of the statement of assets prescribed in the preceding Paragraph.
Art.9. Property claims and obligations of financial institutions arising after the designated hour on assets and liabilities belonging to the old account shall belong to the old account except for those prescribed by Ordinance.
Property claims and obligations of financial institutions arising after the designated hour, other than those belonging to the old account pursuant to the provisions of the preceding paragraph, shall belong to the new account.
Obligations of financial institutions to pay the pay of the officers the staff and other employees arising after the designated hour shall belong to the new account or the old account as prescribed by Ordinance.
Art.10. Cash (including checks) belonging to the old account of financial institutions pursuant to the provisions of Paragraph 1 of the preceding Article shall be transferred as prescribed by Ordinance from the old account to the new account and the equivalent amount shall be entered on the accounts as a debit of the new account against the old account.
Art.11. If a financial institution has used or consumed the assets belonging to the old account for the purpose of business on the new account, the amount equivalent to the countervalue thereof shall be entered on the accounts as a debit of the new account against the old account.
Art.12. The amount of expenditures for pay prescribed in the provisions of Article 9, Paragraph 3, shall be entered on the accounts as a credit of the new account against the old account, as prescribed by Ordinance.
Art.13. In order to repay obligations belonging to the old account pursuant to the provisions of the proviso of Article 16, financial institutions shall transfer the necessary funds from the new account to the old account and expond them from the old account to repay the obligations except when otherwise prescribed by Ordinance.The amount equivalent to the funds so transferred shall be entered or the accounts as a credit of the new account against the old account.
Art.14. With regard to the amounts entered on the accounts as credit or debit of the new account against the old account pursuant to the provisions of Articles 7, 10, 11, 12 or the preceding Article, only the balance of such credits or debits shall be entered on the accounts as a credit or debit of the new account against the old account.
With regard to the amounts entered on the accounts as credit or debit of the new account against the old account pursuant to the provisions of Articles 7, 10, 11, 12 or the preceding Article (in cases where the preceding paragraph applies, the credit or debit resulting from the application of the provisions of the same paragraph), the amount corresponding to the interest shall be added to the credit or debit and entered on the accounts, as provided by Ordinance.
Art.15. Assets of financial institutions which are not clear whether they belong to the new account or the old account shall be presumed to belong to the old account.
Art.16. Financial institutions may not repay obligations belonging to the old account or dispose of assets belonging to the old accountexcepting in cases prescribed by Ordinance.
Art.17. The obligee of liabilities belonging to the old account of financial institutions may neither receive payments from, nor offset his claims with, the assets belonging either to the new account or the old account,excepting from or with assets belonging to the old account in cases of repayment of obligations belonging to the old account or disposal of assets belonging to the old account, as prescribed in the proviso of the preceding Article.
Art.18. Compulsory execution, provisional attachment or public auction sale as provided in the Public Auction Sale Law may not enforced against property belonging to the old account of financial institutions
Compulsory execution, provisional attachment or disposal or public auction sale as provided in the Public Auction Sale Law commenced against property belonging to the old account of financial institutions shall be suspended.
The preceding two paragraphs shall not apply in case such measures are taken on the old account when the repayment of obligations belonging to the old account or the disposal of assets of the old account is made pursuant to the provisions of the proviso of Article 16.
Art.19. The obligee of liabilities belonging to the new account of financial institutions may neither receive payments from nor offset his claims with the assets belonging to the old account.
Art.20. The cancellation or alteration of the registration prescribed in the Debentures, Etc. Registration Law of financial debentures held by the Bank of Japan, financial institutions and associations engaged in insurance business at the designated hour, on which notice was sent pursuant to the provisions of Article 3, may not be demanded until the date designated by Ordinance.
Art.21. Drafts and other assets on the Bank of Japan, financial institutions or persons designated by the competent Minister, which were held by the Bank of Japan, financial institutions or persons designated by the competent Minister at the designated hour may not be transferred or otherwise disposed of without the approval of the competent Minister except when it is repaid.
Art.22. Financial institutions may not be adjudicated bankrupt until otherwise provided by Law.
The dissolution, merger, separation, change of organization and or increase or decrease of capital stock (including shares of investment or foundation funds) shall not take effect without the approval of the competent Minister, except where the competent Minister has ordered it under the provisions of other Laws.
If the competent Minister has given his approval under the provisions of the preceding Paragraph, it shall be deemed that approval simultaneously has been given under the provisions of other Laws on the same matters.
Art.23. The obligor of obligations belonging to the old account of financial institutions will not be barred by limitations until one month after he has become able to exercise his rights.
Art.24. With regard to the part of life insurance payments corresponding to the legal insurance reserves belonging to the old account of the life insurance companies or Central Life Insurance Corporation (hereafter called "old life insurance payments" ), there shall be no changes to the insurance policies of old life insurance payments even if the policyholder has not paid in the premium payable after the designated hour until the date prescribed by Ordinance.
With regard to insurance policies of old life insurance payments, cancellation of contracts, decrease in insured amount or other alterations in the conditions of the insurance contract or demands for loans pursuant to the provisions of the policy may not be made.
Art.25. In case an insurance contract (hereafter called "new contract" ) for the same insured object by the same party as the insurance contract (hereafter called "old contract" ) regarding non-life insurance payments corresponding to the legal insurance reserves belonging to the old contract of non-life insurance companies or Central Non-Life-Insurance Corporation (hereafter called "non-life insurance companies, etc." ) has been made within two months after the designated hour;the non-life insurance companies shall first bear the loss on the new contract and insurance contract for losses corresponding to the insurance reserves in the new account and, if it is not enough to cover the whole loss, shall bear the loss on the old contract, as prescribed by Ordinance to the extent the insured amount under the old contract exceeds that under the sum total of the new contract and insurance contract for losses corresponding to the insurance reserves in the new account.
If a new contract has been made pursuant to the preceding Paragraph, the non-life insurance companies, etc. shall return part of the premiums of the old contract to the policyholder of the old contract, as prescribed by Ordinance.
Art.26. The business year of financial institutions in which is the designated hour shall terminate at the designated hour notwithstanding the provisions of other laws, ordinances or articles of incorporation and the next business year shall end on March 31, 1947 except as otherwise provided by Ordinance.
If there be any surplus in the business year ending at the designated hour, it shall be set aside as a special reserve, notwithstanding the provisions of other laws, ordinances or articles of incorporation and if there be any loss, it shall be carried over to the next business year.
Art.27. In this Law, "financial institutions" shall refer to the following persons (excluding those dissolved previous to the enforcement of this Law and those designated by the competent Minister):
1. Banks (excluding the Bank of Japan), trust companies, insurance companies, mutual loan companies, Wartime Finance Bank, Southern Development Bank, Overseas Funds Bank, Central Bank of Agriculture and Forestry, Central Bank of Commercial and Industrial Association, Pension Bank, People's Bank, National Reconstruction Bank, Central Life Insurance Corporation, Central Non-Life Insurance Corporation, local agricultural associations and urban district credit association;
2. Prefectural fishing industry associations, fishing associations and other associations that may receive deposits as a business, which had monetary obligations on deposits at the designated hour.
Art.28. Financial institutions stated in Item 2 of the preceding article shall report to the competent Minister within two (2) weeks after the enforcement date of this Law if they had any monetary obligations on deposits at the designated hour.
Financial institutions stated in preceding article, Item 2 shall register the fact they are financial institutions within the provisions of this Law within two (2) weeks after the enforcement date of this Law at the place where the principal office of business is located and within three (3) weeks after the enforcement date of this Law at the place where the subordinate office of business is located.
Necessary provisions regarding the registration stipulated in the preceding paragraph shall be prescribed by Ordinance.
Art.29. In this Law, "deposits" shall refer to deposit accounts and other financial obligations prescribed by Ordinance.
Art.30. The books prepared in connection with the business or property of financial institutions shall be kept in such way as may clearly show whether the entries belong to the new account or to the old account.
Art.31. In case financial institutions have two or more accounts in accordance with other laws or ordinances, this law shall apply to each of such accounts.
Art.32. A financial institution which has its main office or principal place of business in the area in whiche this law is enforced and which has a branch office or subordinate place of business in a place where this law is not enforced shall be applied this law with exception to the assets and liabilities of such branch office or subordinate place of business.
If a financial institution which has its main office or principal place of business in a place where this law is not enforced has a branch office or subordinate place of business in the area in which this law is enforced, such branch office or subordinate place of business (if there are two or more branch offices or subordinate places of business, they together, notwithstanding other laws and ordinances shall be considered to be a separate financial institution with regard to the application of this law.
If an office or place of business of a financial institution in the area in which this law is enforced has a credit or debit or an office or place of business in a place where this law is not enforced, the financial institution shall put such credit or debit in the accounts as belonging to the old account.
Art.33. Necessary matters regarding the separation of old and new accounts of financial institutions which are not provided in this Law may be prescribed by Ordinance.
Art.34. Any representative, agent, employee or other worker of the Bank of Japan, financial institution or association engaging in insurance business who did the actual violation in the following cases shall be subject to penal servitude for 3 years at less or to a fine of 30,000 yen or less:
1. In case of a false entry in the notice prescribed in Article 3 or Article 4;
2. In case of failure to receive certification pursuant to the provisions of Article 8, Paragraph 1, or of such certifications of an inventory with false entries;
3. In case of violation of the provisions of Article 16;
4. In case of violation of the provisions of Article 20.
Art.35. Any person designated by the competent Minister pursuant to the provisions of Article 4 who enters a false statement in the notice prescribed in the same article shall be subject to penal servitude for 3 years or to a fine of 30,000 yen or less.
Art.36. Any person who comes under any of the following items shall be subject to penal servitude for 3 years or less or to a fine of 30,000 yen or less:
1. Any violator of the provisions of Article 17;
2. Any violator of the provisions of Article 18;
3. Any violator of the provisions of Article 21.
Art.37. Any representative, agent, employee or other worker of a financial institution who was the actual violator in case of a violation of the provisions of Article 30 shall be subject to penal servitude for 1 year or less or to a fine of 10,000 yen or less.
Art.38. Any representative of juridical person, any agent, employee or other worker of a juridical person or an individual who commits an illegal action in violation of the provisions of Article 34 to Article 36 inclusive, regarding the business or property of the juridical person or individual, the juridical person or individual himself shall be subject to a fine prescribed in the various Articles above, addition to the punishment imposed on the actual violator.
Art.39. The representatives of financial institution shall be subject to a penalty of 3,000 yen or less, in the following cases:
1. In case of failure to report under the provisions of Article 28 Paragraph 1;
2. In case of failure to register under the provisions Article 28, Paragraph 2.
Supplementary Provisions:
The present Law shall come into force as from the day of its promulgation.
The provisions of Article 16 to Article 21 inclusive shall be applied to any act after the designated hour.