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APC 2023 MB > Ethics > Flashcards

Ethics Flashcards

1
Q

What are the RICS Rules of Conduct?

A

Rule 1 – A – ACT WITH INTEGRITY – Honesty, integrity and professional obligations (to RICS) (e.g. not being properly influenced by others and being transparent with clients about fees and services).

Rule 2 – L – LEARNING AND COMPETENCE – Maintaining and acting with competence experience (e.g. only undertaking work where a Member has relevant knowledge, skills and resources & also undertaking sufficient CPD each year.)

Rule 3 – S – SERVICE – Providing good-quality and diligent service (e.g. Understanding clients needs and objectives before accepting work and communicating with clients clearly).

Rule 4 – O – OTHERS - Respect and encouraging diversity and inclusion (e.g. treating others courteously and respectfully and developing and inclusive workplace culture).

Rule 5 – P – PUBLIC – Public interest, responsibility and public confidence (e.g. managing professional finances responsibly and responding to complaints promptly, openly and professionally).

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2
Q

What does the RICS stand for?

A

Royal Institution of Chartered Surveyors

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3
Q

What is the Background to the RICS

A
  • Founded in 1868
  • Royal Charter was originally granted by Privy Council in 1881
  • RICS Regulations and bye-laws set out the governance of the Institution
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4
Q

Who is the Chief Executive Officer and President?

A

Chief Executive Officer – Justin Young

President – Ann Gray FRICS – from 1st January 2023 now also chairs Governing Council

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5
Q

Explain your role as a surveyor, what does RICS do?

A

To uphold the profession and maximise the professions usefulness to the public.

Provide a duty of care to the public and provide reasoned advice to clients.

RICS surveyors manage, measure, value and sell property, infrastructure, construction and land, upholding professional standards to ensure the potential of these assets is maximised and protected.

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6
Q

Where does the obligation and duty of care of RICS members to the public come from?

A

From the Royal Charter – under this RICS is meant to maintain the usefulness of the profession for the public benefit.

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7
Q

What is the RICS

A

The Royal Institution of Chartered Surveyors, founded in 1868.
A global self-regulated professional body that promotes the highest standards in the property industry through professional regulation, high educational standard and professional standards. Protects clients and consumers through strict Rules and provides impartial advice.
Professionals within the land, property, construction and infrastructure sectors responsible for regulating the professional conduct for RICS members.
Currently has 134,000 qualified members
RICS has six world regions – Europe, America, Asia, South Asia, Oceania and Middle East & Africa.
£539 annual subscription in the UK

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8
Q

What is the organisational structure/governance of the RICS

A

RICS is currently governed under the terms of its Royal Charter by various internal councils and boards. The Standards, Regulation and Management Boards report to the Governing Council.

The RICS current governance structure are under review and a variety of new regulations were approved by Governing Council in November 2022 following the Levitt Review.

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9
Q

What is the Bichard Review?

A

the Bichard review is an Independent review looking into the purpose, governance, and strategy of the RICS.

The aim of the review was to create a new sense of purpose and direction for the RICS to make it a more exemplary institution that is capable of coping with the world in the years to come.

The Bichard review had SEVEN main recommendations:

S – SELF REGULATION maintaining self regulation through greater independence for regulatory functions.

P – PUBLIC. A renewed focus on the public interest remit of the RICS

L – LEADERSHIP (show leadership in key issues like sustainability and climate change)

I – INCLUSION AND DIVERSITY increased focus on diversity and inclusion across the profession and with RICS governance.

C – CHARTER REVIEW(review governance and effectiveness within the charter every 5 years)

E – EMPOWERMENT (empower members and encourage engagement and focus on younger members.

S – SIMPLIFIED STRUCTURE - new simplified and clear governance structure.

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10
Q

What are the roles of the RICS

A
  1. To maintain the highest standards of education and training
  2. To protect consumers through strict regulation of professional standards
  3. To be the leading source of information and independent advice on land, property construction and associated environmental issues (RICS 2015)
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11
Q

Why did the RICS develop new rules of Conduct?

A

A simpler structure – easier for members and firms to understand providing more confidence for clients and public.

Clear examples – examples of how members and firms can behave with 12 case studies.

Focusing on respect, diversity and inclusion – encouraging diversity and inclusion, tackling modern slavery – respect and courtesy underpins all professional ethics

Understanding evolving technology – importance of evolving use of data and technology and associated benefits and risks

Tackling global challenges – ethical practice by RICS members and firms has an important role – sustainable development and tackling climate change.

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12
Q

What are the RICS requirements for Registration?

A
  • Ensures there is a quality benchmark for all firms
  • If there are no members of the RICS a firm can not register
  • Firms must annually make a return to the RICS confirming their compliance with their obligations.
  • A practice can be a:
  • Corporate body
  • Partnership
  • LLP
  • Sole Practitioner Practice
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13
Q

What do the Rules for Regulation of Firms 2022 state?

A
  • If 50% of Principles of a UK firm which provides surveying services are RICS members then it has to be regulated
  • If at least 25% of Principles then the firm can apply to be regulated.
  • Principles = sole practitioners, directors, partners or board members or someone who is able to act autonomously
  • Each firm must nominate a ‘Responsible Principal’ who is obliged to ensure all reasonable steps are taken and systems are in place to ensure compliance with regulatory and RICS requirements.
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14
Q

What information is required by the RICS for registration?

A
  1. Type of business and staffing details
  2. Name of the Responsible Principal
  3. Statutory regulated activities – such as for financial services
  4. Nature of clients
  5. Complaints handling procedure details and records
  6. Professional indemnity insurance details
  7. Whether the firm holds clients’ money
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15
Q

What are the mandatory professional obligations for RICS members?

A
  • Comply with CPD requirements set by RICS
  • Cooperate with RICS
  • Promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf
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16
Q

What are the mandatory professional obligations for RICS regulated firms?

A
  1. Publish a complaints handling procedure that includes an alternative dispute resolution provider approved by the RICS and maintains a complaints log
  2. Ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity cover that meets the standards approved by the RICS
  3. If having a sol Principle ensure that thee are appropriate arrangements in place for their professional work to continue in the event that they are unable to work.
  4. Cooperate with the RICS
  5. Provide all information reasonably requested by Standards and Regulation Board
  6. Display on business literature in accordance with the RICS published policy on designations, a designation to denote they are regulated by RICS
  7. Report to RICS any matter that they are required to report under the Rules for Registration of Firms
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17
Q

What is the RICS Ethical Decision Tree?

A

The Decision Tree provides a framework of questions which members should ask themselves when facing a situation in whcih they are asked to act in a potentially unethical manner or situation.

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18
Q

What are the three levels of disciplinary action?

A
  1. Action by Head of Regulation
  2. Disciplinary Panel (independent Regulatory Tribunal)
  3. Appeal Panel
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19
Q

What is the initial investigation stage?

A
  1. Serve a Fixed Penalty Notice
  2. Make a Regulatory Compliance Order
  3. Refer the matter to a single member of the Regulatory tribunal for consideration.
  4. Refer the matter to directly to a Disciplinary Panel
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20
Q

What is a fixed penalty notice?

A
  1. Serve a Fixed Penalty Notice
  2. Make a Regulatory Compliance Order
  3. Refer the matter to a single member of the Regulatory tribunal for consideration.
  4. Refer the matter to directly to a Disciplinary Panel
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21
Q

What is the RICS Guidance for members 2021 on Social Media?

A

Highlights the high standard of professional behaviour expected of RICS members and that the Rules of Conduct protect the interests of members and profession

RICS are likely to investigate concerns about social media if they involve:
- Discrimination
- Dishonesty
- Abusive or threatening behaviour
- Behaviour that is likely to cause harm, distress or offence
- Bullying, harassment or victimisation of a person or people
- A pattern of frequent or a large number of concerning communications
- Ignoring previous advise or warnings about concerns

RICS are unlikely to investigate posts which:
- Are critical of an organisation, its policies and performance rather than individuals
- Use professional and respectful language
- Are removed if requested to do so

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22
Q

How should fee negotiations be carried out ethically?

A
  • Firms should avoid price fixing, aggressive fee cutting or collusion with competitors
  • Should be market based and agreed on an ad-hoc basis with clients
  • Healthy competition is encouraged
  • You can enter into fee negotiations with a client under a professional manor after submitting your initial fee
  • Should not be seen to be undercutting another firm
  • Must be completely transparent with clients and consumers, so they understand you may be in receipt of, or offering, a referral fee and state so in terms of engagement if applicable
  • Granting and acceptance of fees should be done in accordance with the Bribery Act 2010 and the Rules of Conduct
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23
Q

What should Terms of Engagement provide?

A

The clients agreement to the proposed fee basis, payment of expenses (and how calculated) and that a copy of the firms complaint handling procedure is available upon request.

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24
Q

What steps should you follow when considering an Instruction?

A
  1. Check professionally competent
  2. Conflicts of interest or personal interests
  3. Confirm terms of engagement in writing and get written approval from the client before starting work on the instruction.
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25
Q

When would it be appropriate to decline an instruction?

A
  • Not competent to undertake instruction
  • Do not have sufficient facts on the issue
  • Proposed client will not sign terms of engagement or undertake AML checks
  • There is a conflict of interest or personal interest
  • A Professional Indemnity Insurance (PII) liability cap cant be agreed
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26
Q

What is a conflict of Interest between two clients?

A

A conflict of interest arises when a member or firms independence and impartiality is threatened due to the existence of a conflict between two clients when:

  1. any financial interest
  2. a personal interest
  3. commercial relationships
  4. acting on both sides of the transaction
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27
Q

What is Conflict avoidance?

A

Conflict avoidance is when you do not accept the instruction

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28
Q

What is Conflict management?

A

Conflict management is when an instruction is accepted and steps are agreed and put in place to manage the conflict such as an information barrier with written agreement from all parties.

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29
Q

Tell me about the RICS Global Professional Statement on Conflict of Interest?

A

This is a mandatory statement that came into effect in January 2018

It states that a member must not advise or represent a client where doing so would involve a conflict of interest or significant risk of conflict of interest other than where all those who are or may be affected have given their written consent

informed consent may only be sought where the RICS member or regulated firm is satisfied that proceeding is in the interests of those who are or may be affected and is not prohibited by law.

All conflicts must be managed in accordance with the Professional Statement

Every RICS firm must have in place effective systems and controls appropriate to the size and complexity of the business to ensure full compliance.

All firms must keep their records to show compliance with the Statement.

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30
Q

What are the three types of Conflict of Interest?

A
  1. Party Conflict – work on the same or related instruction for two different parties
  2. Own Interest Conflict – personal interest
  3. Confidential Information Conflict – work between two parties that is confidential
31
Q

Tell me how you should obtain informed consent?

A

Can only be given in writing by the person explaining the position to them is entirely transparent about any material factors and sure that the party affected understands. Surveyors should only seek informed consent if satisfied that all relevant parties are best served by doing so.

32
Q

How should you handle a conflict of interest?

A
  1. Upon receipt of the full facts consider whether the inflict is irresolvable because your impartiality is compromised and should be avoided or whether it can be managed maintaining its transparency and openness.
  2. Decide whether to accept or decline the instruction from Client A or B.
  3. Assuming that you wish to accept the instruction set out in writing as soon as possible information to client A and B stating:
    • the nature of the conflict, how you intend to deal with the conflict (information barrier)
    • be as clear as you can
    • request written confirmation from both sides of their informed consent that your firm can act in accordance with the provisions of the procedure proposed.
  4. Once you have received written consent to your declaration of the conflict and your proposals to manage the conflict set up an information barrier with the provisions agreed by both clients.
33
Q

How would you use information / ethical barriers?

A

Ensure that the barrier is robust enough to offer no chance of information passing between the two parties
Take reasonable steps to operate an effective barrier
The surveyors acting on the two sides must be different and must be physically separated
All information regarding the instruction should be stored securely
Keep a clear audit trail, the firms compliance officer must oversee all actions.

34
Q

What does the RICS Professional Statement: Conflicts of Interest – UK commercial property market investment agency, 2017 cover?

A

This is additional mandatory professional statement only relating to UK commercial agency work where a risk has been identified

Dual Agency
o Where an agent has a contractual agency relationship with both the seller and the buyer at the same time
o Must not be undertaken in any circumstances from 1st January 2018 by an RICS member

Multiple Instructions
o Where an agent has a competing contractual relationships simultaneously with several buyers for commercial real estate investment opportunities
o An agent may make multiple introductions. When a client formally instructs on a exclusive basis following signed terms of engagement the agent must inform potential other clients that they are no longer able to advise them.
o If non-exclusive basis the agent must obtain informed consent from the clients subject to the necessary information barriers

Incremental Advice
o When an agent is approached by another party to provide advise to include valuation, building survey or planning in relation to a purchase or disposal that is incremental to an existing instruction
o E.g. agent acting for a for a seller but is approached to provide a valuation by the lender or buyer
o Must only provide as much incremental advice if consent is given and an information barrier is put in place

Personal Interest / Own Interest Conflict
o When acting for a family member, a close business associate or someone with whom you have a financial or personal interest or benefit (connected person)
o Must not let personal interest interfere with or influence your professional judgement – full transparency is required

34
Q

How would you maintain client confidentiality?

A
  • The RICS Bye Laws state that ‘client confidentiality must be maintained for all client affairs’
  • Includes historic information and information provided by a client prior to instruction
  • Clients approval for third party access unless you are subject to a statutory duty overriding – HMRC or police investigation
  • Old files should be held for a minimum of 6 years before disposal and destroyed securely
  • If another surveyor overhears or receives confidential information this can not be used for their own purposes – client and sender should be advised and matter recorded in a note to the firms compliance officer
  • Any confidential information received in error should be disposed of
34
Q

What are the main rules for holding clients’ money? Who gets the interest on client accounts?

A
  • Separate account
  • Appropriately labeled
  • Client gets the interest
35
Q

What do you contain in a conflict check email?

A

Borrower Name, Client Name and Property Address normally unless any of the information is confidential & in which case no email and just check internally on the database.

35
Q

How would you carry out a conflict check?

A

Check the internal database; send a conflict email across the firm; wait a reasonable time for a response (1 week).

35
Q

What was the main change in 2017/2018 with conflict checks?

A

It bans dual agency - stops firms people acting for a buyer and a seller at the same time.

35
Q

Why is PII Important

A

Chartered surveyors are at risk of being sued by their clients or other parties in the event that negligent advice is given.
A PII policy should meet any genuine claim, protecting the assets of the client, the professional and a firm (if applicable) whilst also providing funds to pay the claim.

36
Q

Tell me how you would start a new practice (RICS compliance)

A
  1. Inform RICS of your new practice by completing a Firm Details Form
  2. Appoint a Responsible Principle for all RICS communication
  3. Register with RICS for regulation of the firm
  4. Arrange PII and send details to RICS
  5. Set up procedures got the requirements for Client Money Handling, including Protection Scheme
  6. Register for the RICS Valuer Registration Scheme (VRS) if undertaking Red Book Global Valuations
  7. Obtain RICS approval for the Complaints Handling Procedure
  8. Set up complaints log
  9. Appoint Complaints Handling Officer
  10. Use logo kit from the RICS for all practice material to comply with the designation ‘Regulated by RICS’
  11. Plan for succession / future running of the business
  12. Ensure CPD is logged online
  13. Ensure completion of an online RICS Annual Return at the end of each year
37
Q

What is the Statutory Compliance for starting a new practice?

A

 Requirement to disclose business name
 Disability discrimination compliance – Equality Act 2010
 Financial services compliance – Financial Services and Markets Act 2000, Financial Services Act 2012
 Bribery Act 2010 compliance
 Appoint a Money Laundering Reporting Officer – Money Laundering Regulations 2017, as amended
 Health and Safety compliance - Health and Safety Act 1974, as amended
 Asbestos Register – Control of Asbestos Regulations 2012
 Fire Safety compliance – Regulatory Reform (Firs Safety) Order 2005) et al
 Register for data protection – General Data Protection Regulation 2016 & Data Protection Act 2018
 Estate Agency Compliance – Estate Agents Act 1979, Consumer Protection Regulations 2008, Misrepresentation Act !967 et al
 Inform HMRC for VAT and Tax registration - VAT registration threshold is currently £85,000 pa turnover
 Ensure compliance with current employment law – National Living Wage, working hours, stakeholder pensions, gender pay gap reporting
 Ensure insurance compliance for employer and public liability

38
Q

How would you close a practice in accordance with the RICS?

A
  • Inform the RICS of your retirement / closure
  • Ensure clients are informed at the earliest opportunity and hand over arrangements made to a new firm
  • Return any monies held by clients to their own accounts
  • Inform insures and PII run-off cover for a minimum of 6 years from the expiry of the policy in force at the time of cessation in accordance with RICS requirements
  • Retain a copy of the client files and records for a minimum of 6 years
39
Q

Why do you want to become a member of the RICS?

A
  • It is a globally recognised organisation
  • Ensures a high standard in the surveying professional
  • Highly regarded /reputation
  • Career development and career long learning
  • Market advantage / trusted guidance
40
Q

What are some of the challenges that RICS are currently facing?

A
  • Rolling out IPMS
  • Increasing diversity and improving inclusion
  • Sustainability
41
Q

What do you know about the Bye-Laws?

A

There are 10 of them, governed by the privy council which provide the framework to be self-regulatory rather than needing to be governed by government. The input by the privy council in essence provides a ‘quality assurance’.

Bye Law 2 outlines membership and Registration and Bye-Law 3 outlines designations and how they should be used.

The Regulations then go into further detail about each of these which are governed by the Governing Council.

42
Q

What is contained in your company’s complaints handling procedure?

A
  1. Where your complaint is initially made orally the Client will be requested to send a written summary of their complaint to the person dealing with it.
  2. Once we have received the written summary of the complaint, we will contact them in writing within seven days to inform them of our understanding of the circumstances leading to the complaint. The client will then be invited to make any comments that they may have in relation to this.
  3. Within 21 days of receipt of the written summary, the person dealing with the complaint will write to the client, in order to inform them of the outcome of the investigation into the complaint and to let them know what actions have been or will be taken
  4. If the client is dissatisfied with any aspect of our handling of the complaint, they should contact our Senior Partner
  5. If the complaint still can not be resolved surveying the Client may use the Centre for Effective Dispute Resolution an independent redress provider as approved by the RICS Regulatory Board.
43
Q

What is contained in your companies Anti-bribery policy?

A

This policy allows reasonable and appropriate hospitality or entertainment given to or received from third parties for the purposes of:

establishing or maintaining good business relationships;

improving or maintaining our image or reputation; or

marketing or presenting our products and/or services effectively.

The giving and accepting of gifts up to the value of £150 is allowed if the following requirements are met:

It is not made with the intention of influencing a third party to obtain or retain business or a business advantage, or to reward the provision or retention of business or a business advantage, or in explicit or implicit exchange for favours or benefits;

it is given in our name, not in your name;

it does not include cash or a cash equivalent(such as gift certificates or vouchers);

it is appropriate in the circumstances, taking account of the reason for the gift, its timing and value. For example, in the UK it is customary for small gifts to be given at Christmas;

it is recorded in the Gifts and Hospitality Register

it complies with any applicable local law

Gifts with a value in excess of £150 should be declared to your department head.

44
Q

Why do you have Professional Indemnity Insurance?

A

To protect clients, surveyors and third parties against negligence claims where there is a duty of care breaches and a claim for damages arises. All policies must be underwritten by an RICS approved insurer.

45
Q

What are the current minimum requirements for PII based on turnover?

A

100k or less turnover - £250k level of indemnity

100k - 200k turnover - £500k level of indemnity

£200k + turnover - £1m level of indemnity

46
Q

What is the Maximum level of uninsured excess required by RICS?

A

Firms turnover of up to 10 million = maximum uninsured excess the greater of 2.5% of the sum insured of £10,000

Firms turnover of over 10 million = no set limit of uninsured excess

47
Q

When does negligence occur?

A

Duty of care exist to client and third parties using reasonable care and skill. When breaches and there is a loss a claim for damages arises.

48
Q

What actions can you take to avoid negligence?

A
  1. clearly understanding the clients objectives and confirm precise instructions in terms of engagement
  2. ensure you are competent to take on an instruction
  3. undertake work in accordance with the relevant Professional standards and Practice information
  4. Make detailed notes and take photographs
  5. Keep up to date with market knowledge, carry out and record CPD
49
Q

What are the six main areas of good practice as set out in the RICS Professional Standard Client Money Handling 2019

A
  1. Holding Client Money
  2. Providing information to Clients
  3. Receipts of Client money
  4. Payment from client accounts
  5. Accounting records and controls
  6. Compliance
50
Q

Yianni v Edwin Evans (1981)

A

Residential valuer instructed by a mortgagor lending instruction could owe a duty of care in tort to a mortgagee purchaser relying on the valuation

51
Q

Scullion v Bank of Scotland plc (2010)

A

Breach of duty of care owed to Mr Scullion in relation to a valuation report of a flat in Cobham. The Court of Appeal held that a surveyor who provides advice on a value to a lender in respect of a buy-to-let purchase foes not owe a duty of care to the borrower

52
Q

Burgess v Lejonvarn (2020)

A
  • Established that professionals providing professional services pro bono and without a contract owe a duty of care in tort to act with reasonable care and skill in respect of services they provide.
  • Not under a duty to advise or give warnings and nor are they liable for work they do not do.
53
Q

Procedures to be aware of when Handling Clients Money

A

Client accounts must be kept separately & clearly identifiable

The word ‘client’ is on the bank account and cheque book

A client must be able to have their monies on demand

Payment of interest is agreed with a client and accounts must be kept in credit

Regular bank reconciliation checking that payments received are transferred to the bank account and expenditure records are checked at least monthly

Accurate records are kept with a running balance available

Annual audit and reporting obligations by certified accountant if employed by the RICS are met

Money can only be withdrawn from the a client account if properly required

If cash receipts are made to settle transactions, make sure your records show all cash transactions

Signatories must be agreed with authorised staff and two signatures should be required

A discrete account is for a single named client account only

RICS Regulatory Review Visits of inspection can be undertaken by RICS usually on a routine 3 yearly basis by an accountant employed by the RICS

All firms handling client money need to display their procedures document on their website.

54
Q

Tell me about the Bribery Act 2010

A

Aims to reduce bribery in business in UK and abroad

A bribe can be giving, offering, promising or receiving of an advantage such as a payment, gift or a service for an action which is illegal or a breach of trust

Based on 6 principles:
1. Proportionality
2. Top level commitment
3. Risk assessment
4. Due diligence
5. Communication
6. Monitoring and review

The four offences:
1. Bribing
2. Receiving a bribe
3. Bribing a foreign public official
4. Failing to prevent bribery

Companies are responsible for their employees’ corrupt acts unless can show that they had adequate policies and procedures in place to combat bribery

Certain forms of lavish corporate entertainment can be classified as bribery

Government guidance: Offering a client reasonable and proportionate hospitality will not constitute an offence, such as sport tickets and taking clients for meals as long as recorded in gift register

Companies must meet criteria to prove they have taken steps to prevent bribery
- Identification of potential risks
- Staff training
- Provision of clear policies
- Regular reviews

There is a defence if you can show that you have adequate procedures put in place to prevent bribery

55
Q

What are the Penalties of Bribery?

A

The Bribery Act is policed by the Serious Fraud Office

Maximum penalty of 10 years imprisonment and / or an unlimited fine for individuals

Companies face an unlimited fine

56
Q

How would you deal with a Bribe?

A
  1. When faced with a situation that may involve bribery, I would use the RICS decision free to evaluate the potential legal, financial, and reputational. This allows for informed decision-making.
  2. My response to a bribe would be swift and unequivocal rejection. I would firmly communicate my refusal to accept the bribe and make it clear that such actions are unacceptable under the law and within the organization.
  3. In accordance with the Bribery Act 2010, I would promptly report the incident to the appropriate authorities within my organization, such as the designated compliance officer or senior management. This ensures that the matter is investigated and addressed internally.
  4. I would cooperate fully with any internal or external investigations, provide any necessary documentation or information, and support the prosecution of wrongdoers as required by law.
  5. Beyond reacting to a bribe I would take proactive steps to prevent bribery within my organization. This includes promoting a culture of transparency, providing training and education on anti-bribery policies, and implementing robust internal controls to reduce the risk of bribery.
57
Q

What is Money Laundering?

A

Money laundering is when proceeds of criminal activities are disguised or converted and then realised as legitimate assets

58
Q

What are the key provisions of the Terrorist Financing and Transfer of Funds Regulations, 2017 (as amended in 2022)

A

A requirement to have a written money laundering and terrorist financing risk assessment

Implemented systems, policies, controls and procedures to address money laundering and terrorist financing risks and meet the requirements under the regulations

Adopt appropriate internal controls

Provide staff training

Comply with new customer, enhanced and simplified due diligence requirements

Comply with the requirements relating to politically exposed persons

Ensure appropriate record keeping, policies and procedures

AML checks must be undertaken to confirm identity of the proposed purchaser of a property and check the purchaser’s source of funds by the vendors agent prior to exchange

Include additional high-risk factors when assessing the need for enhanced due diligence, and seek additional information and monitoring in certain cases e.g. high risk third countries

59
Q

What are the level of Customer Due Diligence checks?

A

Identify the client and verify them via a passport, driving license or electronic identification

Make reasonable endeavours to identify the beneficial owners of the client

For a company – its name, company number and address of the registered office is required

The names of the company directors are required unless listed on a regulated market e.g. London Stock Exchange

Obtain information on the purpose and intended nature of the business relationship and proposed funding arrangements as appropriate

60
Q

Tell me about the additional procedures that are requires for any transaction or business relationship involving a person established in a high risk third country or a politically exposed person or family member?

A

Require additional evidence and monitoring

PEPs generally presents a higher risk for potential involvement in bribery and corruption by virtue of their position and the influence they may hold.

More detailed examination of the background and purpose of the transaction and increased monitoring

61
Q

What are the red flags associated with Money Laundering

A

Inability or unwillingness of parties to provide identity documents

Changes to parties involved in transactions

Unusual transaction features, e.g. unexpected urgency required by parties, potential loss-making of an unusual transaction for a client

Payment of fees, purchase or rental monies in unusual currencies

62
Q

What is our responsibility of Anti-Money Laundering as surveyors?

A

Rules of Conduct specifically state that RICS members/firms must not facilitate money-laundering and financial crime.

63
Q

The Consumer Protection from Unfair Trading Regulations 2008

A

they are a set of regulations in the United Kingdom that aim to protect consumers from unfair commercial practices and deceptive marketing.

64
Q

What key provisions and principles of the Consumer Protection from Unfair Trading Regulations 2008 include?

A

Prohibition of Unfair Commercial Practices: The CPRs prohibit unfair commercial practices, which include any commercial practice that is misleading, aggressive, or otherwise unfair to consumers.

Misleading Actions: The regulations define misleading actions as any act or omission that deceives or is likely to deceive the average consumer. This includes false advertising, false information about products or prices, and any other form of deceptive marketing.

Misleading Omissions: These regulations also cover misleading omissions, which occur when important information is omitted or concealed, and this omission causes or is likely to cause the average consumer to make a transactional decision they would not have made otherwise.

Aggressive Commercial Practices: The CPRs address aggressive commercial practices, such as using harassment, coercion, or undue influence to pressure consumers into making purchases. These practices are also prohibited.

65
Q

Tell me about the RICS guidance in ‘Anti-money laundering sanctions update, March 2022’

A

Consider the risks a business as part of your AML procedure, nothing that the sanctions lists include UK citizens and people who live in the UK

Understanding risk factors and red flags

Use software as part of due diligence if a firm is likely to engage with higher risk clients or assets

Check individual clients of a higher risk against the HM Treasury’s ‘consolidated list’

Check existing clients regularly where they present a higher risk – e.g. HM Treasury’s Sanction Notices

What to do if your client is a possible match on the sanctions list, including contacting the Office of Financial Sanctions Implementation (OFSI) for assistance

66
Q

What are the three main areas of offence of Proceeds of Crime Act 2002?

A

if a person conceals, disguises, converts or transfers criminal property

if a person enters into or becomes concerned in an arrangement which they know or suspect facilitates the acquisition, retention, use or control of criminal property by or on behalf of another person

if a person acquires, uses or has possession of criminal property

67
Q

Tell me about the RICS Professional Statement: Countering bribery, corruption, money laundering and terrorist financing 2019

A

It is Mandatory Professional Standard

Globally applicable requirements for RICS members and firms in relation to bribery, corruption, money laundering and terrorist financing

It is divided into three parts:

Part 1
Bribery and corruption: Regulated firms must:

Not offer or accept anything that could constitute a bribe

Have procedures in place to comply with the law

Report suspicion to the relevant authority

Act with due diligence to perform periodic written evaluations of the risks the firm faces

Retain records to show how the firm has met the requirements of this Professional Statements

Not facilitate or be complicit in ML or TF

Have systems in place to comply with the laws

Report suspicion

Evaluate and review the risks presented to the firm

Use third party reliance for checks only where there is a level of confidence for the quality of information provided by the third party

Take appropriate measures to understand the client and the purpose of the instruction

Verify the client by undertaking basic ID checks

Retain records to show have the firm has met the requirements of the Professional Statement

Part 2
Guidance
Have a written policy in place for and senior management to take control of the procedures

Publish a code of behaviour for staff and provide staff training

Encourage transparency

Set up a gifts register

Keep up to date with legislation

Part 3
Supplementary guidance

Establishing a ‘risks-based approach’: consider the 3 w’s – who, what, why

Dealing with politically-exposed persons: enhanced due diligence

The need to identify the beneficial ownership of a company, partnership or trust – e.g. requesting a recent Certificate of Incorporation Annual Return for a company

68
Q

What is the purpose of Professional Indemnity Insurance?

A

To provide financial cover in the event a client suffers financial loss as a result of a breach of professional duty e.g. neglect, error.

69
Q

What do you do if a contractor offers you a crate/ bottle of whiskey/
diary at Xmas?

A

May be acceptable to receive gifts of low value or for marketing purposes and hospitality received in the course of a business meeting that can be reciprocated like
a working lunch. Anything that affects professional opinion is not acceptable.

APC 2023 MB (6 decks)

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