Countering bribery and corruption, money laundering and terrorist financing Flashcards
In what year was the RICS Professional Statement Countering bribery and corruption, money laundering and terrorist financing published?
2019
Why is the Professional Statement countering bribery and corruption, money laundering and terrorist financing (2019) particularly relevant to real estate?
- Evidence shows that real estate is one of the foremost tools used for money laundering.
- Countering bribery and corruption are critical to maintaining RICS professional standards
- The RICS professional statement expects Members to go beyond the legislative requirements - due to the structural weaknesses that exist, allowing corruption within the real estate markets
Broadly describe the obligation for members and firms set-out within RICS Countering bribery and corruption, money laundering and terrorist financing 2019
Members and 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
- Have training in place to comply with laws
- Report any activity they are aware of that breaches anti-bribery and corruption laws to the relevant authorities (if not law - report to manager)
- Perform periodic written evaluations of the risks that face the firm and that may lead to the facilitation of bribery or corruption
- Retain information detailing how the firm has met the requirements of this professional statement.
(Money laundering only):
- Take appropriate measures to understand the client and the purpose of the transaction
- Verify the identity of their client by undertaking basic identity checks
What must RICS Regulated Firms do in relation to Bribery and Corruption?
- Written policy / guidance
- Appropriate / proportionate governance and systems in place
- Promote transparency (gift / charity / conflicts register)
- Clear guidance for staff
- Appoint responsible person / contact on ethical matters
- Due diligence on third parties
What must RICS Regulated Firms do in relation to Money Laundering and Terrorist Financing?
- Written policy / guidance
- Appropriate systems and controls
- Training for staff
- Keep records / reports Identify the ‘beneficial owner’ of a company / client
- Appoint responsible person
What first step is critical in avoiding Money Laundering or Terrorist Financing risks?
- KYC (Know your client) or CDD (Customer due diligence)
- Critical, legal requirement in some countries.
- Can be relatively simple identity checks or can involve deeper investigations (e.g. where there is a concern over the background associations of an introducer, or where the KYC documents are not provided when asked for and without reasonable excuse)
Under RICS Professional Statement Countering bribery and corruption, money laundering and terrorist financing 2019 - in what circumstances can the principles of the professional statement be usurped?
In the case of a Departure:
Where specific legislative, regulatory or court order needs to be followed that differ from some of the requirements of the professional statement
What are the three principles that must be followed when conducting Customer Due Diligence (CDD)?
(Countering bribery and corruption, money laundering and terrorist financing)
- identify the transacting party/parties
- verify the identification is valid and
- carry out additional checks where necessary, according to certain risk factors
What are the two levels of Customer Due Diligence (CDD)?
(Countering bribery and corruption, money laundering and terrorist financing)
- Simplified Due Diligence (i.e. basic verification - check Companies House - used in low risk situations)
- Enhanced Due Diligence (where under your policies, more checks are required / high risk. e.g. check what the source of funding is)
What types of client may be particularly high risk in relation to corruption and money laundering? (PEP)
Politically Exposed Person
Will always warrant Enhanced Customer Due Diligence
What is the definition of Bribery provided within RICS Countering bribery and corruption, money laundering and terrorist financing 2019?
“Offering or accepting an advantage as an inducement for an action that is illegal, unethical or a breach of trust”
Define corruption
(Countering bribery and corruption, money laundering and terrorist financing 2019)
The misuse of public office or power for private gain, or misuse of private power in relation to business practice and performance
Define Money Laundering
(Countering bribery and corruption, money laundering and terrorist financing 2019)
Concealing the source of the proceeds of criminal activity to disguise their illegal origin
(eg. converting criminal proceeds through legitimate transactions)
Under the Bribery Act 2010, who must consent, in order for the offence to proceed to court?
- the Director of Public Prosecutions
- the Director of the Serious Fraud Office
What are the maximum penalties available under the Bribery Act 2010?
10 years in prison or unlimited fine
15 year ban from being a Director of a company (lack of top-level commitment)
