Last month, MUFG Bank Ltd. started offering ¥1,000 to each of its first 100,000 customers willing to give up their paper passbooks. MUFG wants people to switch to online banking, which is cheaper for banks — and not just because they can save on production costs. Banks pay billions of yen a year in stamp taxes, which are levied on certain official printed documents. The government will lose revenue on MUFG’s plan, but it knows that Japan’s banking industry has been in serious financial trouble for years.

The move also supports the government’s desire to promote greater digitalization, which is a problem for the makers and merchants of carved personal stamps (inkan) and seals (hanko). Hanko have been traditionally used to finalize printed documents the way signatures are used in other countries. Like handwriting, hanko is an analog technology. The private sector has been phasing out hanko for years, so if the government digitalizes bureaucratic transactions, the hanko industry becomes redundant.

Naturally, they’re trying to convince the authorities to hold on to what has been recognized for years as an archaic and often inconvenient custom. One problem with hanko as a legal fixture is its unreliability. A signature, like a fingerprint, is a physical manifestation of a personal attribute, while seals are symbols designed to be unique but, given how many surnames are shared in Japan, really aren’t. You can buy plastic ones for a few hundred yen and, in some cases, they can be registered and official, so theoretically people with the same name can be using the exact same seal.

The Asahi Shimbun ran a three-part series in December outlining the hanko industry’s current strategy while reporting on the passage of a bill to revise the Commercial Registration Act, which lays out the procedures necessary for establishing a new company. The revision aims to simplify the process so that a company can be up and running more quickly, which is seen as essential to the current administration’s growth policy. One suggestion is to eliminate the need for hanko, a move discussed by the government in December 2017. In response, a national association of stamp-related companies sprung into action.

One of the association’s executives proposed that hanko be recognized as a world cultural asset, an idea that went nowhere. He then asked an acquaintance to use his connection to Chief Cabinet Secretary Yoshihide Suga to lobby for retaining hanko in official transactions after he observed that other traditional craft associations had formed alliances with politicians. As a business the hanko industry is about one-fifth the size it was about 40 years ago, and craftsmen are dying without replacements. This isn’t quite the case with other traditional crafts such as tofu-making and indigenous musical instruments.

The Suga connection was successful and the government removed the suggestion of eliminating hanko from its growth strategy and kept it as an “option.” But since digitalization is inevitable, the only recourse for hanko advocates is compromise. Their best ally is 79-year-old information technology minister Naokazu Takemoto, who is also the head of the group of politicians the hanko association recruited to their cause. In one sense, Takemoto is perfect, since he is strictly an analog guy, even admitting that he knows little about computers. However, as IT minister, this avowed lack of expertise has attracted ridicule. Takemoto’s position as the de facto point man for the hanko association’s attack may actually be working against their interests, since it emphasizes how out-of-touch hanko culture is. The only thing the association can do is insist that hanko still be used with digital forms, meaning hanko themselves should be digitalized, a move that would negate the whole idea of hanko as an aesthetic artifact.

In the third installment of the series, the Asahi Shimbun explains the two “obstacles” the government wants to eliminate in order to streamline the incorporation process. One is hanko and the other is notary publics. The law requires that a new company’s founder meet with a notary to approve the articles of incorporation. However, a government study group concluded that notaries are no longer really necessary. They are expensive and time-consuming, the Asahi Shimbun says. So the government had to address not only the ire of the hanko industry, but that of Japan’s approximately 500 registered notary publics.

The Justice Ministry objected to eliminating notaries and so another compromise was reached: Company founders could choose to meet with notaries over a video call. One study group member told the Asahi Shimbun he questioned whether either industry would benefit from the compromise, suggesting that notaries came out of the discussion in better shape than the hanko industry because notaries are still mandated, while even digitalized hanko in the form of so-called e-certificates are only an option.

One slim hope for the industry is automation. A Dec. 18 article in Nikkei Business describes a “hanko robot” that can be programmed to affix seals to multiple documents. The company that developed the robot says its purpose is to reduce monotonous office tasks. The robot doesn’t seem to have been the idea of the hanko industry but rather that of robot manufacturers trying to find a way into the office automation market, and it sounds as if this particular technology has some way to go before it becomes appealing to office managers.

The only justification for keeping your hanko now is that once your seal is registered you’re stuck with it. Banks are thinking of confiscating funds in kyūmin yokin (“sleeping accounts”). The authorities define such accounts as having had recorded no transactions for 10 years. If after 10 years the customer wants to withdraw money or close the account, they have to do it in person and they must bring the same hanko they used to open the account, no matter how long ago that was (a few exceptions permitting). Obviously, this system won’t sell hanko — new bank accounts don’t require them anymore — but it might give the industry some time to think up new strategies for survival.

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