Conduct/Ethics - Bribery / Money Laundering / Terrorist Financing Flashcards
What statute in place for Bribery?
Bribery Act 2010
What can you tell me about the Bribery Act 2010?
- Came into force July 2011
- Carries robust penalties
- Previous laws dated back to 1889
- Law delayed due to disagreement on whether “fair and proportionate” corpoorate hospitality could be deemed bribery. (agreed in favour of companies who offer on a genuine basis).
How would you define a Bribe?
- Act defines as: “giving or receiving a financial or other advantage” in connection with the “improper peformance in a position of trust”
- RICS Professional Statement defines as: “The offer, promise, giving, demanding or acceptance of an advantage as an inducement for an action that is illegal, unethical or a breach of trust”.
The Bribee can be guilt of the offence just as is with the Briber.
What are the offences under the Act? what constitutes a bribe?
- Bribing another person
- Being bribed by another person
- Bribing a foreign/public official
- Failing to prevent bribery (not having systems in place to prevent)
What does the RICS publish on Bribery?
Professional Statement: Countering bribery and corruption, money laundering and terrorist financing (2019).
- Effective 01 Sept 2019.
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 penalties under the Act?
- Unlimited fines
- Up to 10 years imprisonment.
What procedures can companies put in place to prevent bribery on their behalf?
There are six principles of prevention companies should put in place:-
- Due Diligence
- Top Level Commitment
- Monitoring and Review
- Communication
- Proportionate Procedures
- Risk Assessments.& contactable person
- Under the Bribery Act, under what circumstance is a facilitation payment permitted?
The only circumstance in which it is OK to make a facilitation payment is when you are under duress.
* For example if there is a real and present risk or danger to “life, limb or liberty”.
* If you or your companions are under immediate physical threat.
* You should put safety first, make the payment and report the matter immediately.
* Or as soon as is practicable to your manager or your ethics compliance contact.
What Must a regulated firm to in relation to bribery and corruption?
(1.3 of Professional Statement)
- Not offer or accept, directly or indirectly anything constituting a bribe
- Have plans in place to comply with law and ensur rules are followed
- Report activity tantamount to breaching anit-bribery and corruption laws, or record if no access to local legislation/contact
- Act with due diligence and perform periodic evaluations which business could face as a risk
- Retain information how business has met with requirements of the professional statement.
What Must members do for Bribery?
(1.3 of prof statement)
- Not offer or accept, directly or indirectly anything constituting 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.
What should regulated firms do in relation to bribery and corruption?
(2.1 Prof Statement)
- Written policy/risk assessment
- Appropriate governance/systems in place
- Encourage transparency
- Clear guidance to staff
- Appoint a contactable person to discuss/address matters
- Publish a code of behaviour
- due diligence on third party suppliers to ensure acting appropriately.
What should you do as a member on the matter of bribery and corruption?
- Declare where necessary to my employer
- Attend relevant training
- Familiarity and compliance with employer’s policy and processes
- If a senior manager, take leadership role in ensuring employer has appropriate regime in place.
What is money laundering?
(defined in: Professional statement on Countering bribery and corruption, money laundering and terrorist financing.)
Concealing source of proceeds from criminal activity to disguise their illegal origin.
- Can be through hiding, transferring, and/or recycling illicit money. Converting criminal proceeds into seemingly legitimate property.
What is terrorist financing?
The solicitation, collection or provision of funds intended to support terrorist acts or organisations.
(defined in: Professional statement on Countering bribery and corruption, money laundering and terrorist financing.)
What regulations are in place for AML?
The Money Laundering, Terrorist Financing and Transfer of Funds (information of payer) Regulations 2017
Who is the supervisory body for AML?
HMRC
Why firms need to register for AML?
o Estate Agents
o Letting Agents rent exc $10k euros per month
o High value dealers (auctioneers/art dealers) deal in transactions of at least $10k euros in either one or series of linked transactions
What systems have to be in place as per the The Money Laundering, Terrorist Financing and Transfer of Funds (information of payer) Regulations 2017
Reg 8 – Relevant persons to register with supervisory body and follow AML laundering regs
Reg 21 – Relevant persons appoint money laundering reporting officer (MLRO) responsible AML compliance
Reg 18 – Firms must identify and assess the risk of ML and TF in business. Risk Assessment must be provided
Reg 19 – Firms must establish and maintain policies, controls and procedures to mitigate ML/TF risks
Reg 24 – provide training on how to recognise and deal with potential ML activities
Reg 27 – Customer due diligence (CDD) to establish and verify identity of customer and nature of transaction (SDD/EDD).
What obligations do you have regarding modern slavery?
Rule 4 (4.4) - Firms must check that supply chain does not engage in modern slavery or other abuses of workforce.
- Section 52 on the modern-day slavery states you have a duty to report it.
What is an MLRO / MLCO.
- Money Laundering Reporting Office (senior manager/director)
- Money Laundering Compliance Officer (required if size and scope of business requires)
What does the RICS publish on the matter of AML?
Professional statement: countering bribery and corruption, money laundering and terrorist financing (2019)
What Must firms do regarding AML/TF
- not facilitate or be complicit in money laundering or terrorist financing activities
- have systems and training in place to comply with these laws, and ensure these are
followed - report any suspicions of money laundering or terrorist financing activities 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 - evaluate and review periodically the risks that prospective and existing business
relationships present in terms of money laundering or terrorist financing offences
taking place - ensure that their responses to the risks identified are appropriate, including
conducting appropriate checks on clients and customers - use reliance only where there is an appropriate level of confidence in the quality of
the information provided by the third party – reliance should only be taken from third
parties with standards conforming to the legal requirements, that provide the obliged
market participant with a complete exchange of all legally required AML information
regarding the identified party and only by confirming the identity and verification
of identity of the client or counterparty in question; ultimate responsibility for the
assessment of risk and actions taken based on this remain with the member or
regulated firm - take appropriate measures to understand the client and the purpose of the
transaction - verify the identity of their client by undertaking basic identity checks
- record and retain information detailing how the firm has met the requirements of this
professional statement.
What Must members do regarding AML/TF (part 1 mandatory requirements)
- not facilitate or be complicit in money laundering or terrorist financing activities
- report any suspicions of money laundering or terrorist financing activities 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
