CLIENT MONEY & BRIBERY Flashcards
What processes do firms need to put in place when handling client money
Have a principal to oversee client money accounting functions
Systems must be secure
Money should be kept separate and be identifiable
Clients must always have access to their money
Client ledgers and balances must be maintained
What are the 2 types of client money accounts
Discrete accounts - hold money for one client
General accounts - hold money for multiple clients
How do the RICS facilitate and insure the protection of clients money
The Clients Money Protection Scheme
Operated by the RICS for anyone to be reimbursed for losses faced as a direct loss by a RICS regulated firm
What is a conflict of interest
When someone in a position of trust has a competing personal or professional interest, making it difficult to fulfill their duties impartially
Chartered surveyors have a duty to make clients aware of potential conflicts of interest and turn down work opportunities where a conflict of interest will occur
What do the Rules of Conduct say about Conflicts of Interest?
Members and firms must act with integrity
Don’t provide advice/service where there is a conflict of interest, unless RICS Conflicts of Interst is complied with
What are the rulings regarding conflict of interest?
Can’t act on behalf of a client where there is a conflict of interest or possibility
Affected parties must be informed of the inability of the member to represent them
Can only act if all parties provide written informed consent
What 3 types of Conflict of Interest are there?
Party Conflict:
The duty owed to one client, conflicts with the duty owed to another
Own Interest Conflict:
The duty owed to one party conflicts with the own/ firms interests
Confidential Information Conflict:
The information owed to one party is meant to be kept confidential for another party
How would you manage a conflict of interest?
- Exclusivity of staff – no cross over of information
- Separate lines of communication to the client
- Separate data storage, separate office/office space
What would you do if there was a conflict of interest, but the client was insistent that you proceeded?
I would check the client understood what a conflict of interest is
I would make them aware of the potential to act impartially.
Seek a letter of informed consent from the client.
I would finally talk through working procedures to manage the conflict of interest.
What does it mean to have information barrier
When information between members of the same firm is restricted, therefore only exclusive members selected to work on the project and kept separated from the other members to prevent information being shared.
What is a bribe?
The offer, promise, giving, demanding or accepting of an advantage for an action that is illegal, unethical or breach of trust
What are the main principles of the Bribery Act 2010
- Making a bribe
- Receiving a bribe
- Bribery of foreign public official
- Faliure of a corporation to prevent bribery
Who does it apply to
All UK Entities and associated persons and companies
What are the 6 principles of prevention companies need to put in place
- Proportiate procedures
- Top level commitment
- Risk Assessments
- Due Diligence
- Communication
- Montioring and review
Under what circumstance is a facilitation payment permitted
Under duress
It should be reported ASAP so a manager or ethics compliance contact
What are consequences of bribery?
Upto 10 years inprisonment and unlimited fines
What do you do with Gifts/Hospitality offers
Always declare this on a company’s gifts and hospitality register
Explain to the Contractor if it is inappropriate to attend and why
Gifts must not be given or taken as rewards, inducements or encouragement for dishonest conduct
What Gifts/Hospitality offers am I allowed to accept?
Only accept and offer gifts that are customary and reasonable in terms of value
Christmas cards and calendars
Invitation to networking events and places to show case
What guidance does the RICS provide on Bribery
Countering Bribery and Corruption, Money Laundering and Terrorist Financing 1st edition, February 2019
What does ‘Countering Bribery and Corruption, Money Laundering and Terrorist Financing’ say for members
- Members must not offer or accept, anything that could constitute a bribe
- Members must ensure that they have adequate knowledge of bribery and corruption to be able to comply with the requirements of this professional standard
- Members must report any activity they are aware of that breaches applicable anti-bribery and corruption laws to the relevant authorities
What does ‘Countering Bribery and Corruption, Money Laundering and Terrorist Financing’ say for firms
- Firms must never accpet anything that is perceived to be a bribe
- Firms must have procedures in place that comply with legisation
- Firms must report any breaches to relevant authorities
- Firms must 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
What does it say about money laundering and terrorist financing?
Understand the indentity of the client by undertaking basic quality checks
Take appropriate measures to understand the client and the transaction
What is money laundering
Concealing the profits from illegal activity to disguise their illegal origin
What legislation is there around money laundering?
Anti Bribery Act 2010
Anti Money Laundering Act 2017
What would you do if a client offered to pay you in cash
I would request that they pay the sum directly into my company’s account as it could be seen as Money Laundering as per the Money Laundering Act 2017
One of the requirement of the Money Laundering Act is that firms must have systems in place that prevent money laundering. Not accepting cash would mean that there is an auditable trail.
What are some examples of modern slavery
Forced labour, human trafficking, child labour
What is some legislation around Modern Slavery?
Modern Slavery Act 2015
What is a facilitation payment?
A payment to a government official to expidite a routine adminisitrive action
If you witnessed money laundering on your project, who would you inform?
I would make it aware to my line manager and principle within the buisness, as well submitting a suspious activity report to the national crime agency
