9 - Ethics, Rules of Conduct and Professionalism Flashcards
Ethics, Rules of Conduct and professionalism - Extract from Candidate Guide - Aug 2018 (updated Feb 2022)
You see that a colleague is having some unwanted attention from a male colleague and it has happened a few times, what action if any would you take and what is this?
Consider this as a potential form of workplace harassment. I would go and speak to the male colleague and tell him its not acceptable behavior, I would also report to my senior.
You set up your own business but you decide to go off on a skiing holiday for 2 weeks, you break your leg and the doctors say you must have complete bed rest and no access to emails or work phone, what do you need in place to cover this situation?
A Locum agreement
How many different types of RICS document statuses are there ?
There are a number of document types. This includes (can be found within the first few pages of many RICS documents) :
• Rules of conduct for members and firms, updated Feb 2022
• International standards - High-level standard developed in collaboration with other relevant bodies
• RICS professional statements (PS) - Mandatory requirements for RICS members and regulated firms
• RICS guidance note (GN) - A document that provides users with recommendations or an approach for accepted good practice as followed by competent and conscientious practitioners
• RICS code of practice (CoP) - A document developed in collaboration with other professional bodies and stakeholders that will have the status of a professional statement or guidance note
• RICS jurisdiction guide - This provides relevant local market information associated with an RICS international standard or RICS professional statement. This will include local legislation, associations and professional bodies as well as any other useful information that will help a user understand the local requirements connected with the standard or statement. This is not guidance or best practice material, but rather information to support adoption and implementation of the standard or statement locally
What is the status of a RICS professional statement ? who does it apply to ?
Mandatory
RICS trainees, members, regulated firms
What would you do if you considered your directors advice to be incorrect ?
Consider :
• The implications of the advice
• Is it legal ?
• Discuss with managers, colleagues
• Refer to the Ethics decision tree
How does your behavior differ professionally and personally ?
My approach and behaviour does not change.
What information is required by the RICS for registration and in the annual return?
• Type of business and staffing details
• Statutory regulated activities - such as for financial services
• Nature of clients
• Complaints handling procedure and records
• Professional indemnity insurance certificate
• Whether the firm hold clients’ money
How do you keep up to date with current affairs and topic issues ?
On mailing list, office discussion, CPD email group, magazines and publications etc
Why do you want to become chartered ?
• Gold standard in my profession
• Offers guidance and support from RICS
• Designation will help my career
• I am committed to lifelong learning
• I want to give back to the up and coming surveyors
What is the RICS ethical decision tree?
The RICS decision tree assists me in making informed decisions , confirming my actions are ethical and legal.
What are ethics?
Moral principles that govern an individuals behaviour.
Why are ethics important?
Act as an anchor to appropriate behaviour and ensure consistency and clarity in the market. It allows us to provide the best service for the client and recognise the wider public.
What does it mean to act ethically as a Chartered Surveyor?
Acting ethically means complying with standards and ensuring that you are acting on behalf of your clients best interests.
What are the three types of due diligence?
• Simplified Due Diligence – Where you determine the business relationship is low risk of money laundering/terrorism
• Enhanced Due Diligence – for high risk customers and transactions with greater threat to financial sector
• New Customer Due Diligence – doing the checks to ensure your client is who they say they are.
What are the three benefits of regulation for firms?
CPS:
• Confidence - for client as regulated firms are monitored by RICS regulation
• Professionalism - firms have to provide clear, impartial and expert advice
• Security - firms have to have recognised CHP, access to ADR and PII cover
Why does you firm have Terms of Engagement? What should be included in Terms of Engagement?
Creates a contract with the client and clear definition of what is expected and on what terms etc.
Sets out the proposed fee basis, payment of expenses and that a copy of the firm’s complaints handling procedure is available upon request.
How would you close down a practice?
• Inform the RICS
• Inform clients and arrange for them to be handed over to a new firm
• Return any clients’ money
• Set-up professional indemnity run-off cover for a minimum of 6 years
• Retain a copy of client files and record for a minimum of 6 years
How long should files be kept for?
• A minimum of 6 years before disposing and destroying them securely (although can be sued for negligence for up to 15 years)
What do the new rules state about the use of the RICS logo and designation?
• Use of the RICS logo has been restricted to members and regulated firms only
• The ‘regulated by RICS’ designation must be displayed clearly to ensure visibility
• Prescribed text that must be included in the terms of engagement
• Companies are only allowed to use ‘chartered surveyor(s)’ designation in trading name and not company name
How would you limit the risk of working with a client or contractor who may be financially unstable ?
• Screening process:
• Dun & Bradstreet credit check
• Company search (Account information from Companies House)
• Internet search (Client website for additional information judgement on reliability)
If your client asked you to lower your fees because of their limited funding, what would you do ?
The client would have to pay the required price for the level of service required or reduce the scope of works involved. I could consider if the scope of work could be reduced however on the client request i would not just lower my fees.
How do you know you are competent ?
Having the knowledge and skills to undertake an instruction. If you have dealt with that type of property and location and you’ve carried out that task, you are deemed as competent. This can be defined as :
• Skills
• Knowledge
• Attitude
• Training
• Experience
Can you advise somebody as an individual ?
Unless you have the correct insurances in place, you should not be giving any professional advice to anybody, friend or family or strangers. I would advise them to contact me during normal working hours as long as it does not become a conflict of interest and TOE can be defined etc.
How do ethics link with conduct rules?
Rules of conduct are a detailed description of how we are expected to carry ourselves and how to set the highest possible level of standard.
If faced with a situation that you felt was unethical, how would you proceed?
Using the decision tree:
• Do I have sufficient facts?
• Is the matter legal?
• Is it in line with RICS Professional and Ethical Standards?
• Have I consulted with appropriate people?
• Do I have clear reasoning in reaching my decision?
• Would I be content for my actions to be made public?
If answered no to any of the above, I would not proceed with the situation alone and would consult senior staff with direction on how to proceed.
Why are ethics important?
• Prevents any issues with consistent behaviour
• Sets a standard of expertise and professionalism
• Promotes trust in the company and industry
What are the CPD requirements?
• Qualified/MRICS member – 20 hrs per year, min 10 hours formal
• Student member – 48 hrs per year (Min 24 formal)
What is the difference between formal and informal training ?
Formal has a learning objectives and a defined learning outcome, i could reference the CPD decision tree for further guidance.
What is your CPD strategy ?
My CPD plan is dictated by my skills and or knowledge gap considering future requirements and sectors etc. This is review bi annually to confirm i am getting suitable and appropriate CPD to my role.
What is a complaints handling procedure?
A procedure to allow and define the procedure for clients to raise a complaints. This may include ADR and relevant timescales for the process.
What must a complaints handling procedure include ?
The procedure must include an Alternative dispute mechanism approved by the standard and regulation board. The procedure can be based on the RICS forms. Issued with terms of engagement, nominated person also details investigated within 28 days, record the complaints, advise PI insurers of complaint etc.
What is a Complaints Handling Procedure ?
• A firm must have a CHP and maintain a complaints log
• If there is a complaint, it must be addressed to the Complaints Handling Officer and handled within 28 days of receipt. If the complaint cannot be resolved, it can be referred to an independent 3rd party
• You can be your own Complaints Handling Officer as a sole practitioner but most refer it to a 3rd party
What must a complaints handling procedure include?
• A form to fill out
• Redress mechanism
• Details should be issued to clients with the terms of business
• Clear, quick, transparent and impartial and free of charge
• Names and contact details of nominated investigating person must be stated
• Complaint must be investigated within 28 days
• All complaints and progress and outcomes must be recorded
• Advise PI insurers of a complaint
• Two stages: 1 – consideration, 2 – referral to third party
What options are available if you couldn’t resolve the complaint?
• Property Ombudsman
• RICS Dispute Resolution
• Escalation etc
What is the property ombudsman?
Independent government approved body who provides redress to consumers whose complaints are considered on a case by case basis. They are not regulators and have no authority to take legal action or dictate action.
Where would you find the RICS requirements for professional indemnity cover ?
• Professional indemnity insurance requirements
• Regulation Document
• Version 9 with effect from 1 April 2022
In relation to professional indemnity insurance, what is the minimum limit of indemnity for turnover under £100,000(in the preceding year )?
• £250,000. This is dependent on predicted turnover based on the previous year’s turnover
• The RICS defines 3 levels of cover:
o up to £100,000 = £250,000
o £100,001 - £200,000 = £500,000
o £200,001 + = £1,000,000 of cover
How many years after an instruction has been completed can a Professional Indemnity claim be made ?
15 years (Limitations Act)
What type of cover would you need to cover a claim brought after a firm or member ceases to trade ?
Run off cover
What cover do you need?
• PII insurance - Professional indemnity insurance covers financial loss, personal injury and property damage resulting from your negligent act or error while you’re working for a client.
• PLI insurance - Public liability insurance is there to protect you if a member of the public is injured (or their property is damaged) and your business is faced with a compensation claim as a result. It can cover you when you’re working at client sites or in public.
• Employers Liability Insurance - Employers’ liability insurance covers you and your business for compensation costs if an employee becomes ill or injured as a result of the work they do for you. It’s legally required of all businesses with one or more employees.
• Building Insurance (if you own your own premises)
Why do you need PI insurance?
Consultants provide expert advice and therefore face risks associated with making mistakes or errors in judgement that could cost a business in profits. When profits are lost due to any negligence or perceived negligence businesses often respond with lawsuits. It also protects the client, surveyor and firm.
What is the guidance for sums PI insurance?
Minimum levels of indemnity cover
* up to £100,000 = £250,000
* £100,001 - £200,000 = £500,000
* £200,001 + = £1,000,000 of cover
Run off cover
* Run off cover must also be held for a minimum of 6 years for a limit of £1million.
Maximum uninsured excess
* Up to and including £10m = the greater of 2.5% of the sum insured, or £10,000
* Over £10m = no maximum
What would you do if you dropped your camera on someone’s car bonnet during a survey?
Make numerous attempts to contact the owner to detail what has happened along with an sincere apology. If not available I would leave a note, take pictures etc. I would escalate this to the management team. This may prompt a claim under professional or public indemnity insurance.
What status is the RICS Professional Indemnity Insurance Requirements document?
A regulation document
When closing down a practice what sort of insurance should you take out?
Run off cover
• Run off cover must also be held for a minimum of 6 years for a limit of £1million.
According to the PII Policy Document, if your firm turned over £137,500 in the previous year, what is the minimum level of insurance required this year?
£500,000 cover
Who does PII protect ?
Clients from financial loss, the firms form loss resulting in being able to continue trading and the surveyor.
How long should the run off cover last for ?
RICS details a minimum of 6 years with £1 million per claim of cover.
What is meant by each and every claim ?
• This is one of the two types of cover/policy
• Each and every is cover for each claim that does not add up, the opposite is aggregates, where the claims and added up to a certain agreed value.
• You could have each and very claim up to £100,000 per claim or you could have £100,00 aggregate(which is a lot lower cover)
What are the April 2022 PI Insurance updates ?
- Fire safety cover - Since 2020, insurers have imposed a blanket fire safety exclusion on PII terms provided due to concern following high profile fire safety failures, meaning chartered surveying firms have increasingly been left uninsured for fire safety exposure on all aspects of their business.
- Under the new terms, insurers are not permitted without specific dispensation to exclude fire safety claims on a property four storeys or less and fire safety coverage must be provided as a minimum on an aggregate, defence cost inclusive basis.This aspect of the changes will come into effect on 1 May 2021.
- Cyber cover - There is a new regulatory requirement for insurers to clarify the cyber cover provided in PII policies. The changes do not restrict the cover provided in PII policies, but clarifies existing requirements on insurers from their regulator the Prudential Regulatory Authority.
- Approved Insurers -A new insurer has joined the list of RICS Approved Insurers, providing a greater competition and increasing the availability of cover.
What measures should be taken to try and avoid PI claims?
• Keep full and detailed records of meetings, conversations etc
• Record recommendations and advice given
• Use proper letters of engagement, scope of services and terms of engagement
• Don’t advise on a specialism outside your field of experience
• Use RICS guidelines
• Avoid poor management and excessive workloads
What if the loss exceeds the cover provided by the PII insurance?
The professional / firm is liable for the difference – in assets etc
What does PII stand for ?
PII is Professional Indemnity Insurance - This is in place to protect the client, surveyor and profession in the event of financial loss as a results of neglect, error or omission.
What basis should PII be underwritten ?
On a claims made basis
What does claims made basis mean ?
When the insurance policy covers when the claim is made not from the work was caried out
What is the significance of claims made basis ?
Promotes the need for run off cover so this could not continue.
how long should run off cover be around for ?
Contract under hand = 6 years, a deed - 12 years, 15 years under the limitations act
What is run off cover ?
‘Run off’ insurance is professional indemnity insurance which covers the historic liabilities of a business and its directors when the business ceases or is acquired.
How can you avoid the chance of claims ?
• Keep full and detailed records of meetings, conversations etc
• Record recommendations and advice given
• Use proper letters of engagement, scope of services and terms of engagement
• Don’t advise on a specialism outside your field of experience
• Use RICS guidelines
• Avoid poor management and excessive workloads
What does PII stand for ?
PII is Professional Indemnity Insurance - This is in place to protect the client, surveying and profession in the event of financial loss as a results of neglect, error or omission.
What benefits does it provide for the profession ?
Protected from financial loss, improve trust in the profession,
What basis should PII be underwritten ?
On a claims made basis
What types of insurance will you require and why?
• PII insurance - Professional indemnity insurance covers financial loss, personal injury and property damage resulting from your negligent act or error while you’re working for a client.
• PLI insurance - Public liability insurance is there to protect you if a member of the public is injured (or their property is damaged) and your business is faced with a compensation claim as a result. It can cover you when you’re working at client sites or in public.
• Employers Liability Insurance - Employers’ liability insurance covers you and your business for compensation costs if an employee becomes ill or injured as a result of the work they do for you. It’s legally required of all businesses with one or more employees.
• Building Insurance (if you own your own premises)
What else does the RICS guidance state with regards to PI insurance?
• Insurance should be on an each and every claim basis rather than aggregated so that you have sufficient protection regardless of how many claims have been made against you
• It is the policy in place at the time of the claim that is relevant, not the policy in place when the negligent work was carried out.
• Policy should be on a claims made basis
What should a PII policy contain?
• Must be on a claims made basis
• Must be on an each and every claim basis
• Policy wording is written on a full civil liability basis
• Underwritten by a listed insurer
• Covers past and present employees
• Run-off cover
• Minimum level of indemnity required by the RICS
Explain the term ‘claims made Basis’
A ‘claims made’ basis covers claims that are made and reported during the policy period only and not once the policy period is over.
Explain the term ‘each and every claim Basis’
The limit of indemnity covers each claim individually (instead of a accumulatively for that year, which is referred to as ‘in the aggregate’)
What does having the PII policy written on a full civil liability basis mean?
A full civil liability basis means if a claim isn’t specifically excluded, it’s included (as opposed to a ‘negligence only’ policy, where if a claim is not specifically included, it’s excluded)
What happens to PII when you retire?
Run-off cover ensures firms, members and customers are not exposed to financial detriment in the period following a firm ceasing to trade or a member’s retirement
How would you determine what is sufficient in terms of PII runoff cover?
Should be for a minimum of 6 or 12 years, depending on how the contract was executed, however negligence claims can be made up to 15 years after work was undertaken - advice from an insurance broker should be sought as to whether to maintain for the full 15 years
What are the minimum levels of PII based on ?
Minimum level of indemnity is based on the firm’s turnover in the previous year (or estimated within a business plan for a new firm)
What are the minimum levels of PII required?
The RICS defines 3 levels of cover:
o up to £100,000 = £250,000
o £100,001 - £200,000 = £500,000
o £200,001 + = £1,000,000 of cover
What is meant by the term ‘maximum level of uninsured excess’?
The part of each claim the firm must pay itself
What should you do in case of a potential claim on your PII?
Must notify insurer in the event of:
- An actual claim
- A written or verbal threat of a claim
- Any circumstance that the firm has reason to believe may result in a claim
- Any complaint notified via the firm’s CHP
What would you do if you dropped your camera on a car during a survey?
Should have public liability insurance to cover cost of repair to car.
What year did the Money Laundering Regulations come into force in the UK?
1994
In the RICS Professional Statement - Countering bribery, corruption, money laundering and terrorist financing February 2019 - RICS Members and Firms must do what in relation to bribery and corruption ?
In relation to bribery and corruption RICS-regulated firms must:
• not offer or accept, directly or indirectly, anything that could constitute a bribe
• have plans in place to comply with applicable laws governing bribery and corruption, and ensure that these are followed
• report any activity they are aware of that breaches anti-bribery and corruption laws to the relevant authorities (as specified in local legislation); where there is no local legislation the activity should be recorded and, if possible, reported to a senior manager
• act with due diligence to perform periodic written evaluations of the risks that face the firm and that may lead to the facilitation of bribery or corruption; in determining Countering bribery, corruption, money laundering and terrorist financing 6 RICS professional statement Effective from 1 September 2019 the appropriate level of due diligence, the firm may consider the type of business activities they engage in and the environment in which they operate
• retain information detailing how the firm has met the requirements of this professional statement.
In relation to bribery and corruption RICS members must:
• not offer or accept, directly or indirectly, anything that could constitute a bribe
• ensure that they have adequate knowledge of bribery and corruption to be able to comply with the requirements of this professional statement
• report any activity they are aware of that breaches applicable anti-bribery and corruption laws to the relevant authorities (as specified in local legislation); where there is no local legislation the activity should be recorded and, if possible, reported to a senior manager.
Can you name any Money Laundering Red Flags?
• Cash-only buyers
• An unusual sale price (too low or too high)
• Payments from multiple/different source to counterparty
• Funds provided by unknown third parties
What due diligence do you apply in relation to money laundering ?
My company has a policy relevant to this, I would always air on the side of caution. For example as a business do not accept cash or cheque payments. Any red flag would be raised suitably.
What is money laundering?
Concealing the source of proceeds of criminal activity to disguise their illegal origin. This may take place through hiding, transferring and or recycling illicit money or other currency through one or more transactions, or converting criminal proceeds into seeming legitimate property.
Client comes into your office with 10k cash to pay builder, what can you do?
I would politely decline as under RICS guidance, one should not facilitate or complicit any money laundering acts. Should I be concerned if there is money laundering then this should be reported to local legislation. Under the Money Laundering Act 2007 (updated 2017), under HMRC guidance, which advise that necessary due-diligence should be completed to ensure the money is clean. HMRC advise that these checks should be done if these transactions are occasional and of a value of €10k and you are not registered high value dealers. A high value dealer is a firm who has registered with the HMRC as they receive regular high value payments of €10k or more in cash for goods. Companies such as jewellers or car dealers. Such due-diligence checks include; checking who they say they are, financial statements, where the money came from.
How would you advise the client to deal with the 10k cash?
I would advise that the money needs to be put into the bank and proof of where the money was obtained will also need to be shown to their bank as banks can become suspicious of irregular payments of large amounts.
Why is real estate a money laundering risk ?
Money laundering through real estate transactions integrates black funds into the legal economy while providing a safe investment. It allows criminals to enjoy assets and derived funds having camouflaged the origin of the money used for payment.
If you ran your own firms who would you report suspicious activity to ?
• National crime agency(NCA)
• HMRC
• The Police
Can you rely on someone else’s due diligence ?
No it is your responsibility to ensure the checks are suitable and sufficient.
What is tipping off ?
the process of alerting the suspect party of a potential forthcoming investigation following the reporting of a potential red flag.
Give me some examples of how your firm might comply with the Money Laundering Regulations.
We report cash payments over £10K. Carry out risk assessments to make sure that we take the necessary procedures when working with clients from high risk countries or high risk sectors.
What are the principles of the Money Laundering Regulations?
Sets additional obligations for private sector firms working in areas of high money launder risk. Aims to stop criminals using professional services to launder money and to investigate large or regular cash transactions. You have a duty to report cash payments over £10K. Carry out risk assessments to make sure that you take the necessary procedures when working with clients from high risk countries or high risk sectors.
If you were given a gift what would you do ?
Log in within the gift log, I may decline the gift taking into account timings and proportionality and my companies gift handling policy.
Would you accept a gift from a contractor ?
I would take into account the proportionality and timings. If I did It would be logged in our gifts handling record.
If you were offered a bottle of wine at xmas what would you do ?
Consider the proportion and circumstances of the gift, including the timings. In some cases this maybe include being aware of cultural differences.
When would accepting or providing hospitality be acceptable ?
Once al the works are complete on site and the final account agreed and there is no conflict of interest. also consider the scale, time and suitability of the hospitality and or gift.
What’s the difference between a gift and a bribe ?
A gift is a small gesture, a bribe is under the impression that some gain will result.
Would you accept a gift or hospitality?
Consider the timing and proportionality. Could always check this against the guide in the Bribery Act 2010. Ensuring it does not influence decisions, should not be regular, should be openly received, keep a gift of the items received.
What would you do if a contractor took you out for a coffee?
I would question the intentions firstly. If I felt like it was a genuine business reason, I would accept but offer to pay for myself and log the meeting in the companies gift register if they end up paying.
There is some case law relevant to PII and discusses the Liability of individuals. What is the name of the case law?
Merrett v Babb
Hart v Large
Can you please expand on your knowledge of Merret Vs Babb ?
• Considered if a professional employee was vulnerable to claims brought directly against them for advice given on behalf of their employers.
• Essentially, an individual provided valuation advice and was negligent. The firm the person worked for did not have adequate run off insurance, the company shut down and the client made a claim which was passed to the employee that gave the advice.
Can you please expand on your knowledge of Hart V Large ?
The Claimants brought claims in negligence against the architects instructed by the previous owners, the Claimants’ conveyancing solicitors and Mr Large. The claims against both the architect and the solicitors settled prior to trial.
Against Mr Large, the Claimants alleged that he was negligent in: (1) failing to recommend a full building survey, rather than HomeBuyer report; (2) failing to draw attention to the issues of water ingress / damp in the HomeBuyer report; and (3) failing to recommend that the Claimants obtain a professional consultant’s certificate.
The key take-aways from this case:
• Being clear on the report about the scope of inspection including limitations, caveats and actions available to the client;
• Recommending justifiable further investigation;
• Taking all reasonable steps to ensure clients understand the differences between the levels of service, including the extent and limitations of each option
What is the RICS mission statement ?
Our mission is
* To qualify and equip members to the highest standards
* To enforce those standards
* To lead solutions to combat challenges in the built environment
When was the RICS founded ?
15th June 1868,
What does the RICS stand for ?
Royal Institution of Chartered Surveyors
What are the key roles of the RICS?
• Maintain the highest standards of training and professional experience
• Protect customers and consumers through a strict code of ethics
• Provide impartial advice, analysis and guidance
• Regulate and promote the profession
Why do you want to join the RICS?
• Globally recognised professional institution
• Highly regarded reputation which I want to be a part of
• Professional status within my profession
• Lifelong learning/CPD
What are the 5 principles of better regulations?
PACTT
• Proportionality
• Accountability
• Consistency
• Targeting
• Transparency
What are the roles of the RICS ?
• Maintain the highest standards of training and professional experience
• Protect customers and consumers through a strict code of ethics
• Provide impartial advice, analysis and guidance
• Regulate and promote the profession
What parts are there to the RICS ?
• Governing Council
• Regulatory Board
• Management Board
• Executive Team
• President Team
How many members does the RICS have ?
RICS has 140,000 members who operate out of 146 countries
Who is the president of the RICS ?
Ann Grey
What is the RICS motto ?
Est modus in rebes - there is measure in all things
Why do you want to become chartered ?
• This is the gold standard in my profession
• Offers guidance and support from RICS
• Designation will help my career
• I am committed to lifelong learning
What is Clement Lau working on in during his term ?
He is determined to extend the reach and influence of RICS’ thought-leadership and to drive the organisation’s digital capability during his term
Who gave the RICS Royal Charter?
1881 by Queen Victoria
What act covers discrimination ?
The Equality Act 2010, which came into force 1st October 2010
What are the 9 protected characteristics of the Equality Act 2010 ?
• Race & Ethnicity
• Disability
• Religion or belief
• Age
• Sexual orientation
• Gender
• Gender reassignment
• Pregnancy & maternity
• Marriage & civil partnership
Where are you protected under the Equality Act ?
Within and outside of work
What are the key principles for firms to prevent Bribery ? PCR CDM
1) Proportionality
• Are the procedures proportionate to the bribery risk and the nature of the firms activities?
• Are the procedure clear, practical, effectively implemented?
• Are anti-bribery procedures in place for different payments? Hospitality, donations etc.
2) Commitment (Top Level)
• Issue a statement to staff/partners that communicate the polices
• Zero tolerance
• Select and train a senior employee to take responsibility for procedures and policy.
• Issue internal and external publications
3) Risk Assessment
• Procedures to assess the nature and extent to exposure for potential bribery.
• Accurately identify and prioritise risks a firm may face
• Written record of risk assessments and findings
• Internal risks – bonus culture, lack of bribery messages from top management
• External risks – Country (is the country particularly known for bribery) or Sectoral
4) Communication
• Embed an understanding of procedures and zero tolerance with internal and external communications
• Training should be continuous
• Whistle blowing policy established
5) Due Diligence
• Firms should carry out due diligence on their staff and partners
• Credit checks, internet checks, interviews etc
• Should get a clear statement of the nature of services offered
6) Monitoring and Reviewing
• Periodically review anti-bribery policies and assess effectiveness.
• Use bribery risk assessment to make decisions
• Review process in response to external or internal stimuli
• Review financial control mechanisms
When did the bribery act 2010 come into force ?
01-Jul-11
What is the name of the RICS guidance on bribery and money laundering and when is it effective from ?
Professional Statement (Mandatory) - Countering bribery and corruption, money laundering ad terrorist financing, 1st edition, February 2019
What due diligence do you apply in relation to bribery ?
My company has a policy relevant to this, I would always air on the side of caution. For example as a business do not accept cash or cheque payments.
What is bribery ?
The offer, promise, giving, demanding to acceptance of an advantage as an inducement for an action that is illegal, unethical or a breach of trust.
EVIC - Exchange of value for an improper cause
What is the bribery act ?
The bribery Act 2010 details the 4 offences as :
• giving a bribe
• receiving a bribe
• bribery an official
• no procedure in place
What is corruption
The misuse of public office or power for private gain, or misuse of private power in relation to business practice and performance
What are the four main offenses noted in the bribery act 2010 ?
The bribery Act 2010 details the 4 offences as :
• giving a bribe
• receiving a bribe
• bribery an official
• no procedure in place
What are the principles for mitigating bribery ?
Suitable procedure in place, training,
What’s does the bribery act 2010 say about hospitality/gifts ?
Consider timings, reasonable, cultural differences,
What is a facilitation payment ?
A facilitation payment is a type of bribe - a common example is where a government official is given money or goods to perform (or speed up the performance of) an existing duty.
Facilitation payments were illegal before the Bribery Act came into force and they are illegal under the Bribery Act, regardless of their size or frequency - but are not illegal in all countries.
What is the difference between a bribe and an offer of hospitality ?
A bribe is expecting an offer of unfair advantage to something, you must consider the proportionality and timing of the offer.
Can you amme some bribery warning signs
Bribery warning signs include :
• Be aware of high risk areas for bribery and corruption. Even the suspicion of impropriety could be very damaging to the firm’s reputation and your reputation. Always check the policy and if in doubt, ask
• Lavish gifts or hospitality being given or received
• Unexplained preferment of certain individuals for receipt of benefits, especially when outside of normal selection and control procedures, such as secondments, training contracts, employment, placements and internships
• Individual never takes time off even if they are ill, for holidays, or insists on dealing with specific contractors themselves
• Making unexpected, uncommercial or illogical decisions when accepting projects or contracts
• Raising barriers around specific roles or departments which are key in the tendering or contracting process
• Unusually smooth process of cases where individual does not have the expected level of knowledge or expertise
• Abusing decision-making processes or delegated powers in specific cases
• Agreeing contracts not favourable to the organisation either with regard to terms or time period
• Unexplained preference for certain contractors during the tendering period
• Avoidance of independent checks on tendering or contracting processes
• Bypassing normal tendering or the contractor’s procedure
• Invoices being agreed in excess of the contract without reasonable cause or explanation
• Missing documents or records regarding meetings or decisions
• Firm procedures or guidelines not being followed
• The payment of, or making funds available for, high value expenses (e.g. school fees) on behalf of others
• Requesting or making donations to charitable or political causes connected to key individuals or companies that business is being done with
• Abnormally high commission percentage being paid to a particular agency. This may be split into multiple accounts for the same agent often in different jurisdictions
• Private meetings with public contractors or companies hoping to tender for contracts
• Abnormal cash payments
• Pressure exerted for payments to be made urgently or ahead of schedule
• Payments being made through a third party country, i.e. goods or services supplied to country A, but payment to be made usually to shell company in country B
Who does the crown prosecution service prosecute on behalf ?
National crime agency, HMRC, The Police , crown prosecution service.
Are you familiar with any RICS guidance on money laundering ?
RICS counter bribery, corruption, money laundering and terrorist financing. 1st Edition - February 2019
What is the status of this document (RICS counter bribery, corruption, money laundering and terrorist financing) ?
RICS Professional statement - Mandatory requirements for RICS regulated members and firms.
What is a PEP ?
Politically exposed person
What act governs bribes ?
The Bribery Act 2010, this came into affect on 1st July 2011
Why is real estate in general attractive to potential money laundering ?
Safe investment, good return on investment, fixed abode for further activates, good reputation
Which factors did you take in consideration to make your decision regarding the gift? (RICS decision tree)
• Checked the cost of the gift
• Check if it was given to just me or the company and at an appropriate time?
• Is it reasonable?
• Is it a bona fide expenditure?
What is the definition of IESC ?
International Ethics Standards Coalition
How many different partner companies or institutions are involved in the coalition (IESC)?
100+
The International Ethical Standards will serve as what?
An anchor to appropriate behavior, Consistency and clarity
The (IESC) Coalition came together because?
To veomce a key factor in market certainty and transparency, it believes in creating one shared standard
Why are the Professional and Ethical Standards so important?
60% of global wealth is in land and real estate and 50% of property transactions are international
What is the purpose of the International Ethics Standards (IESC) ?
The purpose of the international ethics standard coalition of professional organisations in construction/property is to assert and sustain the critical role of ethics in professional practice to meet the needs of the global market and maintain public trust.
- Accountability
- Confidentiality
- Conflict of Interest
- Financial Responsibility
- Integrity
- Lawfulness
- Reflection
- Standard of Service
- Transparency
- Trust
What is the obligation of a RICS regulated firm ?
Avoid conflicts of interest, ensure competence, procedures for CPD, complaints handling procedure, suitable indemnity insurance, use of suitable designation, cooperate with RICS.
What is a contact officer ?
The designated person to liaise between company and the RICS. In my company this is ????
What steps would you need to take to set up a proactive regulated by the RICS ?
• Inform RICS
• Appoint a contact officer
• Register with RICS for Regulation
• Arrange suitable insurance (PI, PII, specific item insurance etc)
• Set up client business account for client money
• Complaints handling procedure
• CPD training
What is required to register a firm to RICS?
the Firm provides surveying services to the public. the Firm is operating in Regulated Area A (UK);c. at least 50% of the Firm’s Principals are RICS Members.
Which firms CAN volunteer to be regulated by the RICS?
If 25% of the principles are members, then it is voluntary to become regulated.
Why would a firm volunteer to be regulated?
It allows you to use RICS designation and logo’s on marketing material to show that you offer the highest level of service and given the RICS reputation and access to clients, this would be beneficial to the company.
As a sole practitioner, which additional safeguards do the RICS require? (for example if you are ill or pass away?)
• Use of a locum who can complete any outstanding works and arrange for adequate run-off cover
• Third party named for Complaints Handling
Who can you use the RICS logo ?
RICS Regulated firms and members.
Can you advise on what a conflict of interest is and how you would deal with it?
An example of this would be where you may be asked to undertake work on behalf of a contractor but another part of the business is already working for the client on the same project. In these circumstances you would need to explain the situation to your prospective client and then politely decline the opportunity. Try and relate your answer to your working experience gained to date – you may already have experienced such a situation which you could talk about.
How do you undertake a conflict of interest check
We have a system that checks appointments based on information such as address, name and partied involved, in addition to verbal conversations between the surveyors.
What is the difference between conflict avoidance and management ?
• Conflict avoidance is a person’s method of reacting to conflict, which attempts to avoid directly confronting the issue at hand
• Conflict management is the process of limiting the negative aspects of conflict while increasing the positive aspects of conflict. The aim of conflict management is to enhance learning and group outcomes, including effectiveness or performance in an organizational setting
What is a conflict of interest?
A conflict of interest occurs when an individual’s personal interests – family, friendships, financial, or social factors – could compromise his or her judgment, decisions, or actions in the workplace
What information barriers does your firm have in place?
• Restricted access to files
• Clear desk policy
• Private meeting rooms
• Physical barriers e.g. restricted floor access
How would you proceed if a client was insistent that you continued to work for them despite a conflict of interest?
• Check their understanding of reduced impartiality
• Seek letter of instruction to continue
• Agree working procedures to manage the conflict
• Keep them updated of any risks
• Seek informed consent
What is the RICS Structure ?
What is the RICS Ethics Decision Tree ?
A tool to help with difficult decisions day to day. Consideration of it is legal ?
Outcome are do not proceed, act or record.
What is the RICS CPD decision tree ?
If something constitutes formal or informal CPD
