Does lending a bank account between family members also constitute a violation of the real-name financial transaction system?

You have asked about acts that violate the real-name financial transaction system.

To get straight to the point, lending a bank account between family members also constitutes an act that violates the real-name financial transaction system.

Article 3 of the relevant Act provides that all financial transactions must be conducted under one's real name, and lending one's name to a third party is, in principle, prohibited as a ‘borrowed-name transaction.’

In particular, even where only the name is lent for purposes such as tax avoidance, if the actual flow of funds is not under the person's control, it may be judged to be an ‘act of lending one's name’ and its illegality may be recognized.

A person who lends their name may be criminally punished as an ‘aider’ or accomplice in a violation of the real-name financial transaction system, and in practice an administrative fine, a criminal fine, or, in severe cases, even imprisonment may be imposed.

If you have been contacted by the police, an investigation is likely already underway, so rather than making hasty statements or responses, it is important to consult immediately with an attorney experienced in financial crimes.

You should clearly organize the account usage history, the flow of funds, and the circumstances of lending your name, and secure materials that can prove there was no purpose of tax avoidance or money laundering.

We recommend that you establish a defense strategy with a specialized attorney who has handled many cases related to violations of the real-name financial transaction system.