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Let’s get rid of the Hanko system in Japan

Hanko is a carved stamp that can be used as a personal signature in Japan. It is common to use Hanko when you make a contract, withdraw money from banks, or receive a parcel at home. Hanko has its origins in ancient China and spread to the surrounding countries as a culture. The length of the history of Japan’s Hanko system can be seen from an old gold seal that was supposedly given to a Japanese lord by the Han Dynasty in the year 57 AD. Since the Meiji era (1868-1912), the practice of stamping Hanko on various official documents has been formed and continues to this day.

There are various categories of the Hanko system.

  1. Those that are required by law to be signed and sealed.
  2. Documents to be submitted to a public institution have a “Hanko” column, which is stamped by a corporation or individual.
  3. A document that is customarily stamped on documents exchanged between private companies at the time of a contract or quotation.
  4. In the case of a contract between a private company and an individual or in various procedures, it is used to confirm the individual’s identity and intention to make the contract.
  5. Hanko for courier receipts, attendance registers, radio gymnastics participation cards, etc.
  6. Hanko for individuals to enjoy impressions as an art or a hobby.

Of these, category 6 will remain as a culture in the future. Hanko that used on traditional Japanese paintings and calligraphy, is a highly artistic world. Category 5 is likely to remain as a practice, even though it means nothing.

Category 1 to Category 4 are use-cases of Hanko as a signature system. However, they are incomplete mechanisms because Hanko has no function to verify the person’s identity, confirm the person’s intention, or prevent falsification of the contents. Hanko is easy to alter or copy. Making an imitation carved stamp from a Hanko printed image is also a no-brainer if you have a 3D printer. 30 years ago, there was already a service that said, “Bring your Hanko printed image, and we’ll engrave a solid Hanko that looks precisely like it.” Illegally copied Hanko has been used for criminal purposes repeatedly.

It was in 1999 when I first wrote a paper to tell that Hanko was no longer effective as a certification system.

Financial service and authentication technology: A study on the security of Internet financial transactions (co-authored with Tsutomu Matsumoto), “Kin’yu Kenkyu (Monetary and Economic Studies)” Vol.19, No.1 (issued in April 2000).

Even if there is a governmental system of a Registered Hanko and a Hanko certificate, it would not be a reliable authentication system because the fraud could be perpetrated as much as possible by forging Hanko itself. That’s why the Electronic Signature Law was enacted to create a more trustworthy system that is not a stamp (Act on Electronic Signatures and Certification Business, Law number: Act No. 102 of 2000). This law was enacted to use an information technology-secured digital signature method instead of Hanko required at the Registered Hanko level. However, because of the complexity of how it worked, many people wanted the Hanko to survive. As it is, 20 years have passed since then.

It was in the late 2010s that the debate about abolishing Hanko began to flourish. The existence of the Hanko is hindering the efficiency of Japanese companies’ office work. It is holding back the digitization of operations. It is an obstacle to building a digital government. Various criticisms have been made repeatedly, but people have stubbornly refused to change.

I’ve been writing that Hanko system in Japan should be reconsidered as follows:

Due to the Coronavirus crisis of 2020, people refrained from going outside. Problems arose when company employees who refrained from going out on unnecessary occasions and continued to work from home had to come to the office to use the company’s Hanko. At the request from Keidanren, the government’s Council for the Promotion of Regulatory Reform stepped up its efforts to abolish the Hanko.

Private sector contracts are increasingly moving to electronic contracting services. The issue was raised that many of the documents submitted to public authorities required a stamp. In the future, the relevant ministries and agencies will consider how to respond to this, and the move to abolish the Hanko is likely to spread to other local governments as well. Some of them may need to be amended by law, and operations may address some of them. This is the beginning of the abolition of the obligation to use Hanko for business purposes, which has been an issue for a long time and is an old eviction that remains only in Japan.

Nevertheless, it would be difficult to abolish Hanko’s use for all of the above Categories 1-4 quickly. For Categories 2-4, it is likely to be applied to electronic contracting services based on the Electronic Signature Law for use-cases that require secure authentication.

Japan managed to survive the first wave of the Coronavirus pandemic with limited damages, but it is not surprising that the second and third waves could come at any time. We don’t have much time left. The old ills that have been left unattended for many years must be removed as soon as possible.