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Tilly Rees SoE > Ethics > Flashcards

Ethics Flashcards

1
Q

What are the new RICS documentation categories?

A

RICS are in the process of reviewing so that all documents fit into two categories:
Professional Standards
- Document that set out guidance for competent and ethical practice eg existing Professional statements and guidance
Practice information
Document that provides advice or practice support to RICS members and firms

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2
Q

Why is the change occurring for RoC?

A

Following the Bichard Review:
* They want to ensure RICS standards are up to date and easy to use.

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3
Q

Define Professional Standard

A

A set of guidelines that outline the expected behaviors and competencies of RICS members

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4
Q

Define Practice Information

A
  • These provide advice or practice support to RICS members and firms.
  • They are not mandatory. It does not make explicit recommendations.
  • It includes processes, toolkits, checklists, insights etc.
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5
Q

When is the change rolling out (PS/PG)?

A
  • These are being rolled out on all new RICS guidance being published, or in some cases existing guidance is being reissued using the new definitions.
  • An exercise is currently underway to review all standards and guidance documents and place each title into one of these categories.
    RICS are currently reviewing and re-categorising documentation.
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6
Q

Founded

A

1868

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7
Q

Royal Charter

A

RICS has a Royal Charter, initially granted by Privy Council in 1881

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8
Q

What sets out the governance of the institution?

A

RICS Regulations and Bye Laws set out the governance of the Institution

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9
Q

What are the FOUR levels of membership?

A

There are 4 levels of membership
1. FRICS
2. MRICS
3. AssocRICS
4. Trainee/Student

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10
Q

What to do to become a fellow?

A
  1. Evidence of achievement of FOUR fellowship characteristics, which include:
    * five or more years at MRICS,
    * a leadership role,
    * professional/technical achievement,
    * academic achievement or
    * raising the profile of RICS
  2. A portfolio of professional achievement to support the application is required to include your CPD
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11
Q

Current governance structure

A
  • Governed under the terms of its Royal Charter by internal councils and boards
  • Governing council has 20 members
  • The Standards and Regulation Board and the Management Board report to the governing council
  • There are 17 specialist professional groups covering property, land and construction
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12
Q

What does the governing council do?

A

Runs the RICS providing management and strategic direction

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13
Q

Who is the current Chief Executive officer?

A

Justin Young

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14
Q

Who is the current president and what do they do?

A

Justin Sullivan FRICS
* He chairs Governing council

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15
Q

What is the role of the RICS?

A
  • Promote and enforce the highest professional qualification and standards
  • Accountable to both members and public
  • Involves policy influence and political engagement
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16
Q

What are the THREE main roles of the RICS?

A
  1. Highest standards of education and training
  2. To protect consumers through strict regulation
  3. To be the leading source of information and independent advice on land, property, construction and associated issues (RICS 2015).
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17
Q

What was the Levitt Review?

A
  • Undertaken in 2021.
  • Public exposure of the lack of clarity, structure and purpose of RICS governance arrangements.
  • Levitt called for a full independent review of ‘purpose, governance and strategy’ of RICS.
    This led to a review by Lord Michael Bichard.
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18
Q

What was Bichard Review?

A
  • Followed the Alison Levitt Review in 2021.
    Aim: to clarify the PURPOSE of RICS, including its responsibility to act for the public advantage. Make recommendations on its governing structure, provide proposals for incoming leadership/governing body on the future culture and strategy of the institution.

The aim of the Bichard Review had 5 key themes:
1. Governance,
2. Strategy,
3. People,
4. Culture & values,
5. Member service.

  • New Governing Council elections took place April 2023.
  • RICS recruited Diversity, Equality and Inclusion and Sustainability Panel Chairs.
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19
Q

What were the 7 key areas of the 36 recommendations?

A
  1. PUBLIC INTEREST
    A renewed and increased focus on the public interest remit of RICS, including amending the Royal Charter and creating a public interest panel to advise governing council
    . MAINTAINING SELF REGULATION
    Maintaining self-regulation, through greater independence for regulatory functions
  2. DIVERSITY AND INCLUSION
    Increased focus on diversity and inclusion across the profession and within RICS governance
  3. EMPOWERING MEMBERS
    Empowering and enabling members through greater support for regional boards, alongside increased member engagement, with renewed focus on younger members
  4. INDEPENDENT REVIEW
    Undertaking an independent review of RICS governance and effectiveness at delivering against its Charter for the public advantage once every five years
  5. NEW STRUCTURE
    A new simplified, clear, accountable governance structure
  6. LEADERSHIP
    Showing greater leadership on issues that matter most to society, such as sustainability and climate change
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20
Q

What are the FIVE Future Foundations in November 2023 following the Bichard Review

A
  1. VISION
  2. MISSION
  3. STRATEGIC GOALS
  4. VALUES
  5. A WORLD CLASS ORGANISATION
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21
Q

What are the 5 benefits of being an RICS member?

A
  1. Status - your professional credentials provide unrivalled client confidence
  2. Recognition – Promotion of your professional excellence to governments and markets
  3. Market advantage – RICS status and standards gives you a competitive advantage.
  4. Knowledge – International practice standards, professional guidance, CPD and knowledge sharing
  5. Network – Access to professional worldwide
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22
Q

What major challenges do the RICS face?

A
  1. Women in property – RICS launched first Women in Surveying Insight Report in July 2023. Looked at challenges such as discrimination, bias and inequity. In UK and Ireland, women represent 17% of RICS members.
  2. Sustainability – built environment accounts for around 40% of global carbon emissions. RICS Sustainability Report 2022. RICS Value the Planet Campaign (aims to help implement UN Sustainable Development Goals)
  3. Fire Safety – fire safety in buildings and external wall systems. UK Fire Safety conference in November 2023 on building safety and EWS1. Fire Safety Act 2021, Building Safety Act 2022, Fire Safety Regulations 2022. RICS published professional statement on ‘Valuation approach for properties in multi-storey, multi-occupancy residential buildings with cladding’ in 2022.
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23
Q

FOUR Requirements for registration

A
  1. Firms providing surveying services to the public must register for regulation to ensure that there is a recognised quality benchmark for all firms.
    If there are no RICS members, a firm cannot register
  2. Regulation provides a ‘gold standard’ of quality control for clients
  3. Firms must annually make a return to the RICS confirming their compliance with their obligations
  4. A practice can be a corporate body (a company), a partnership, an LLP (Limited Liability Partnership (LLP) is a legal business structure that combines the flexibility of a partnership with the limited liability of a company) or a sole practitioner practice
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24
Q

RICS ‘Rules for the regulation of firms’ 2022

A
  • If 50% RICS members then it has to be regulated,
  • If at least 25% then it can apply to be regulated
  • Need a ‘Responsible Principal’ to ensure compliance
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25
Q

The use of the logo

A

New rules came into effect in April 2020, including:
* A registration to the use of the designation ‘Chartered Surveyors’ by firms to the trading name only.
* Only RICS members and registered firms can use the logo.

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26
Q

Information required by the RICS for Registration

A
  1. Type of business
  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 client’s money
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27
Q

When were the Rules of Conduct published?

A

Published October 2021, effective 2nd February 2022.

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28
Q

What do the Rules of Conduct do?

A
  • Promoting and enforcing the highest ethical standards in valuation, the development and management of land, real estate, construction and infrastructure.
  • Global basis.
  • They apply to both members and firms.
  • They replace the previous Rules of Conduct for Members and Firms and the 5 Global Professional and Ethical Standards.
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29
Q

Why do we have Rules of Conduct?

A

Sets out the standards of professional conduct and practice expected of RICS members and firms

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30
Q

Rule 1

A

Members and firms must be honest, act with integrity and comply with their personal obligations to RICS

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31
Q

Rule 2

A

Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise

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32
Q

Rule 3

A

Members and firms must provide good quality and diligent service

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33
Q

Rule 4

A

Members and firms must treat others with respect and encourage diversity and inclusion

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34
Q

Rule 5

A

Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence

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35
Q

Three Professional Obligations for members?

A

RICS members must:
1. Comply with the CPD requirements set by RICS
2. Cooperate with RICS
3. Provide all information reasonably requested by the Standards and Regulation Board

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36
Q

SEVEN Professional obligations for firms (Appendix to Rules of Conduct)

A
  1. Publish a CHP and maintain a complaints log
  2. Appropriate PII cover
  3. If having a sole principle, make appropriate arrangements for their professional work to continue in the event of their incapacity, death or absence from work
  4. Cooperate with RICS
  5. Provide all information requested by the Standards and Regulation Board,
  6. Display on their business literature, in accordance with RICS’ published policy on designation, a designation to denote that they are regulated by the RICS
  7. Report to RICS any matter that they are required to report under the Rules for the Registration of Firms.
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37
Q

Why have the Rules of Conduct been updated?

A
  • Provide one clear framework
  • Provide clear examples alongside each rule.
  • Focus on respect, diversity and inclusion.
  • Understand evolving technology.
  • Tackling global challenges such as sustainable development.
  • To respond to new risks and challenges.
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38
Q

What is the ethics decision tree?

A

Provides a framework of questions which members should ask themselves when facing a situation in which they are asked to act in a potentially unethical manner or situation

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39
Q

Why is it important to regulate the surveying profession?

A
  • To protect the public
  • Uphold confidence in the profession
  • Uphold professional standards
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40
Q

Who undertakes disciplinary procedure?

A

Undertaken by the Standards and Regulation Board

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41
Q

How can a disciplinary procedure be triggered?

A
  1. Someone complaining to the RICS,
  2. An allegation
  3. because of information established by the RICS
    * Not every shortcoming on behalf of a member or a firm will necessarily give rise to disciplinary proceedings.
    * However, failure to follow any RICS guidance will be considered by the RICS when examining the behaviour of a member or firm.
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42
Q

What is the guidance on disciplinary procedure?

A

RICS Regulatory Tribunal Rules 2022

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43
Q

What is the guidance for the regulatory approach?

A

RICS Regulatory Decision Making 2022 provides an outline of the regulatory approach by RICS of regulated members, non-members and firms

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44
Q

What are the THREE levels of disciplinary action?

A
  1. Action by Head of Regulation
  2. Disciplinary Panel (drawn from independent Regulatory Tribunal)
  3. Appeal panel
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45
Q

Initial investigation phase of disciplinary proceeding

A
  1. The first step is a formal investigation by the Head of Regulation of the RICS
    They will initiate one of the following FOUR
  2. Serve a Fixed Penalty Notice
  3. Make a Regulatory Compliance Order
  4. Refer the matter to a single member of the Regulatory Tribunal for consideration
  5. Refer directly to a Disciplinary Panel
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46
Q

What is a fixed penalty?

A
  • Used for breaches of the Rules relating only to the supply of information to the RICS by firms and members.
  • These may consist of a fine and or a caution
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47
Q

What is a Regulatory Compliance Order?

A

It is a written document which states the terms upon which the member or firm must take in a specified period of time and an agreement to pay a fine

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48
Q

What is a Regulatory Compliance Order used for?

A

For low level breaches of the Rules, such as some minor breaches which could easily be corrected

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49
Q

What might a Regulatory Compliance Order cover?

A
  • Non-compliance with RICS Rules, including
  • Failure to undertake appropriate CPD.
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50
Q

Action by a Disciplinary Panel

A

Use for serious breaches of conduct

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51
Q

What are the penalties available to a Regulatory Tribunal Disciplinary Panel?

A
  1. Issue a Regularity Compliance Order (as above)
  2. Reprimand
  3. Fine
  4. Impose an unlimited amount of fine
  5. Impose conditions upon future continued RICS registration
  6. Expulsion
  7. Require publication of the results of the hearing
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52
Q

Appeal Panel

A
  • Appeal Panels can consider a member or firms appeal against review of a decision relating to the above level of disciplinary procedure
  • They will review the decision made, having regard to the evidence previously presented and any new representation.
  • The appeal panel can allow the appeal and vary the penalty previously imposed
  • Membership of this Panel includes lay members.
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53
Q

What is the associated guidance with use of social media?

A

Use of social media: guidance for RICS members

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54
Q

What does the guidance on social media state?

A

RICS is likely to investigate concerns about social media posts where they involve:
1. Discrimination
2. Dishonesty
3. Abusive or threatening behaviour
4. Bullying/harassment
5. A pattern of frequent or a large number of concerning communications
6. Ignoring previous advice or warnings about concerns

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55
Q

When is the RICS unlikely to investigate social media posts?

A

RICS notes that it is unlikely to investigate social media posts which:
* Are critical of an organisation, its policies and performance, rather than individuals
* Use professional and respectful language

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56
Q

What is the latest on Professional Standards?

A
  • The RICS is in the process of re-categorising all current PS and GN to become Professional Standards
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57
Q

What is a Professional Standard?

A
  • ‘Set requirements or expectations about how they provide services or outcome of their actions’
  • Mandatory requirements, use the word ‘must’ and these must be complied with
  • Recommended practice uses the word ‘should’
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58
Q

What is an RICS Practice Information?

A

Information to support the
- practice,
- knowledge and
- performance of RICS members and regulated firms

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59
Q

What are examples of practice information?

A

These can include but are not limited to:
- good practice,
- information,
- insights of processes

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60
Q

What do you know about fee negotiations?

A
  • Avoid price fixing
  • Market-based and agreed on an ad-hoc basis.
  • Consider level of service when negotiating.
  • Be completely transparent (e.g., if a referral fee is involved).
  • Consider the Bribery Act 2010 and the RICS Rules of Conduct.
61
Q

What is the relevant guidance on granting and receiving referral fees?

A

Bribery Act 2010 and the RICS Rules of Conduct 2021

62
Q

When agreeing fees what should be considered?

A
  1. Time
  2. Cost
  3. Quality
63
Q

THREE steps of Terms of Engagement

A
  1. Competent
  2. No conflicts of interest or personal interest
  3. Confirm terms of engagement in writing and get written approval from the client BEFORE you start work on the instruction
64
Q

Why might you decline an instruction?

A
  1. Not competent
  2. Insufficient facts
  3. The client won’t sign ToE or complete AML checks
  4. Conflict of Interest
  5. PII liability cap cannot be agreed
  6. The advice is for a friends or on a pro bono basis and your PPI cover does not cover work done on a personal basis
  7. The potential client is included in the UK governments sanctions list
65
Q

What is a conflict of interest?

A

Arises when a member of firms independence and impartially is threatened due to the existence of conflict between two client.

66
Q

Conflict avoidance v conflict management (‘No v Yes’)

A
  • A conflict avoidance = do not accept the instruction
  • Conflict management = instruction is accepted, and steps are agreed and put in place to manage the conflict, with the written agreement of all parties
67
Q

What is the RICS Guidance on Conflicts?

A

RICS Global Professional Standard: Conflicts of Interest 2017

68
Q

What does the guidance on conflicts state?

A
  • 3 types of conflict:
  • “Informed consent” must be given
  • Must be in best interest of all parties and legal.
  • All conflicts must be managed in accordance with the Professional Standard
  • All firms must keep records to show their compliance with the Standard
69
Q

What is informed consent?

A
  • This can only by given in writing
  • Need to be transparent about any material factors
  • Only seek informed consent if satisfied that all relevant parties are best served by doing so
70
Q

What 2 things do you consider when managing a conflict?

A
  • Transparency
  • Openness
71
Q

What are the 3 steps of handling a conflict of interest?

A

Steps:
1. Conflict avoidance
* Consider whether the conflict is irresolvable because your impartiality is compromised and should be avoided or whether it can be properly managed maintaining transparency and openness
2. Written advice to both parties
* Disclose the nature of the conflict and how you propose to manage it
* Be clear – so parties can make informed decisions
* Request written consent
3. Conflict management
* Set up information batter

72
Q

How should information barriers be operated?

A
  • The barrier must be robust
  • Must be physically separated, preferably in different buildings, or different floors
  • There is a virtual IT barrier
  • Information should be securely stored
  • Keep a clear audit trail of the conflict check process
73
Q

What does RICS Conflicts of Interest – UK Commercial Property Market Investment Agency Professional Statement 2017 state?

A
  • Dual agency prohibited from January 2018.
  • Multiple introductions allowed if on “non-exclusive basis” –informed consent given from all clients and declared.
  • Incremental advice allowed if consent is given, and an information barrier must be in place.
74
Q

What is an personal/own interest conflict?

A
  • This arises when acting for a family member, a close business associate or someone with whom you have financial or personal interest or benefit (known as a ‘connected person’)
  • You must not let a personal interest interfere with or influence your professional judgment.
  • Full transparency is required
75
Q

What is client confidentiality?

A
  • RICS Byelaws state that client confidentiality must be maintained.
  • Permission to share information is needed unless under investigation.
  • Files must be held for a minimum of 6 years before disposal.
76
Q

What would you do if you overheard confidential information?

A
  • Cannot be used for own purposes, info disposed of securely.
  • Client must be notified of error and matter recorded.
77
Q

What is the guidance on complaints handling?

A
78
Q

What does the RICS state regarding the CHP?

A
  • Firms must have a published complaints handling procedure (CHP) that meets the requirements of the RICS Rules of Conduct 2021.
  • CHP needs to be in ToE
  • Need to notify your PPI insurers if there is a claim for negligence
  • A complaints log must be maintained t
  • Firm must include an RICS approver Alternative Dispute Resolution (ADR) mechanism in their CHP.
79
Q

What must be detailed in the complaints log?

A
  • details,
  • progress and
  • outcome of any complaints
80
Q

What is the first thing you do when there is a complaint?

A

Notify PI insurers and CHP must be approved by the RICS.
Whenever the firm receives a complaint from who they owe a duty of care.

81
Q

What is stage 1 on CHP?

A

STAGE 1 – In House
1. CHP details issued,
2. clear procedure,
3. complaints handling officer,
4. submitted in writing.

Acknowledged within 7 DAYS and Investigated within 28 DAYS.

82
Q

What is CBREs CHP timeframes?

A

Acknowledged within 5 DAYS and Investigated within 20 DAYS.

83
Q

What is stage 2 of CHP?

A

STAGE 2 – ADR, 3rd Party
* If unresolved, an appropriate redress mechanism must be provided such as the** Property Redress Scheme** and the RICS Dispute Resolution Service.

84
Q

What are the 6 types of ADR?

A
  1. Negotiation
  2. Mediation – neutral mediator – facilitates discussions between parties.
  3. Early neutral evaluation – independent, non-binding opinion
  4. Ombudsman – confidentially receive case details and instigates resolution of complaint.
  5. **Arbitration **(Arbitration Act 1996)
  6. Independent Expert Determination (RICS Guidance Note 2016)
85
Q

What are the FOUR requirements of CPD?

A
  1. Min 20 hours CPD in a calendar year
  2. at least 10 must comprise Formal CPD.
  3. Must maintain current understanding of RICS Rules of Conduct during a rolling 3-year period
  4. All member much record their CPD activity using the RICS CPD management system
86
Q

What is the difference between formal and informal learning

A

Formal
- Structured learning
Informal
- Self-managed learning

87
Q

Why would there be a negligence claim?

A
  • Duty of care is breached
  • Claim for damages arises
88
Q

What is the relevant case law on negligence?

A

Yianni vs Edwin Evans 1981
Established that a residential valuer instructed by a Lender could owe a duty of care in tort to the Borrower relying on a valuation.

89
Q

What is the Statutory Compliance for setting up a new practice? (NINE)

A
  1. Disclose business name.
  2. Equality Act 2010, Financial services Act 2012, Bribery Act 2010.
  3. Money Laundering Regulation 2007 – appoint Money laundering officer
  4. Health and Safety Compliance - Health & Safety Act 1974, Control of Asbestos Regulations 2012.
  5. Fire safety compliance, - Fire Safety Act 2021
  6. Register for data protection - GDPR 2016 and Data Protection Act 2018 compliance.
  7. Inform HMRC – VAT threshold = £90k per annum.
  8. Compliance with current employment law.
  9. Ensure insurance compliance for employer and public liability
90
Q

How to avoid negligence?

A
  • Understand the clients objectives
  • Confirm scope Terms of Engagement
  • Ensure you are competent
  • Make detailed file notes and take photographs
  • Keep up to date with market knowledge and legislation
  • Cap the professional liability excess on your PII policy in the terms of engagement
91
Q

What is the Limitation Act 1980?

A
  • Contract - 6 years from date of negligent act / 3 years from date of knowledge / 15 years long stop date.
  • Tort – 6 years from the date the claimant suffered the loss.
92
Q

What is Professional Indemnity Insurance?

A
  • Mandatory for surveyors working in practice
  • To protect clients, surveyors and third parties against negligence claims when their duty of care breach and a claim for damages arises
  • appropriate level of insurance is in place
  • All policies must be underwritten by an RICS approved insurer, as found on the RICS website
93
Q

What is the RICS compliance on closing a practice?

A
  1. Inform the RICS of your closure and deregister
  2. Inform clients and hand over to a new firm
  3. Return any monies held by client to their own accounts
  4. Inform insurers and procure PII run-off cover for a minimum of 6 years
  5. Retain a copy if the client files and records for a minimum of 6 years.
94
Q

What is the RICS guidance on Professional Indemnity Insurance?

A

RICS Regulation: RICS Professional Indemnity Insurance Requirements 2022

95
Q

What does RICS Professional Indemnity Insurance Requirements April 2022 state?

A
  • An appropriate level of insurance is in place for each instruction
  • Consideration on potential liabilities which may exist
  • All policies must be underwritten by an RICS approved insurer, as found on the RICS website
96
Q

Minimum requirements of PII based on turnover include

A
97
Q

maximum level of uninsured excess required by RICS is:

A
98
Q

What needs to be considered when basing requirements of PII cover?

A
  • Their likely risk profile to negligence claims when deciding on their levels of insurance needed
  • If it is a new business, estimate the turnover and adjust accordingly
99
Q

What else should you know about PII cover?

A
  • This policy should be fully retroactive.
  • PII policies work on a ‘claims made’ basis
  • The PII certificate to be sent to the RICS on an annual basis
  • Early notification to firm’s insurers is required when a potential claim arises
100
Q

What is Run-off cover following cessation of trading?

A
  • A minimum of £1m of aggregate cover over period of 6 years
  • Most firms aim to cap their liability with clients for individual instructions
101
Q

What is the guidance on Liability caps?

A

RICS Practice Information – Risk, Liability, and Insurance 2021

102
Q

What does the guidance on liability caps state?

A
  • RICS recommends the use of liability caps to manage risks associated with professional work
  • Be aware of third-party reliance
  • Ensure that only those stated in the report can rely upon the information
103
Q

What is the guidance on handling clients money?

A

RICS Professional Standard: Client Money Handling, 2019

104
Q

What are the SIX areas of ‘Client Money Handling, 2019’

A
  1. Holding client money
  2. Providing information to clients
  3. Receipts of client money
  4. Payments of client accounts
  5. Accounting records sand controls
  6. Compliance
105
Q

What can clients money include?

A

Deposits, rent, service charge and retentions.

106
Q

What procedure do chartered surveyors need to be aware of when handling clients money?

A
  • Keep accounts separate / identifiable (use word “client”).
  • Client must be able to have monies on demand.
  • Money only to be withdrawn if properly required.
  • Keep accurate records.
107
Q

What is the RICS compliance when setting up a new practise?

A
  1. Inform RICS
  2. Appoint ‘Responsible Principal’ for all communication
  3. Register with RICS regulatory board.
  4. PII and CHP details to RICS.
  5. Procedures for client money handling.
  6. Complaints Handling Officer and log.
  7. Comply with use of RICS logo.
  8. Succession plan.
  9. CPD logged and RICS annual return completed.
108
Q

What is the key legislation on gifts and bribery?

A

Bribery Act 2010 -
* Aims to reduce bribery in business in UK and abroad

109
Q

What is hospitality?

A
  • Hospitality which seeks to genuinely promote and improve the image of a firm is an acceptable
  • key part of doing business
  • and registered, if required, by the Firm in accordance with their anti-bribery procedures
110
Q

What is CBRE’s gift policy?

A
  • Under CBRE RISE values of ‘Integrity’, there is guidance on gifts.
  • All gifts must be reported on Gifts and Hospitality Declaration Form.
  • As a general rule, employees can give/accept gifts or events tickets up to the value of £100 per person.
  • The gifts cannot be cash, cannot be in a manner that can influence a decision (e.g. if we are pitching for business).
  • If unsure, you must consult the Compliance Director before accepting or making offers. CBRE Compliance Director is Geraldine Mash.
  • Gifts and hospitality offered to/from any government entity is prohibited unless authorised by Compliance Director
  • Excessive gifts can be seen a conflict of interest, or bribe.
111
Q

What considerations did you have when offered a gift?

A
  • Is gift prohibited by law?
  • Could it be interpreted as a bribe?
  • Could it influence business decision?
  • How would it be perceived if publicly disclosed?
112
Q

What is a bribe?

A
  • The giving or receiving of an advantage such as a payment, gift or a service for an action which is illegal or a breach of trust
  • Certain forms of lavish corporate entertainment can be classed as bribery.
113
Q

What is accepted in terms of gifts/hospoitality?

A
  • Government guidance states that hospitality is not prohibited by the Act.
  • It states that offering a client reasonable and proportionate hospitality will not constitute an offence such as a ticket to a major sporting event and taking clients for meals as long as this is accurately recorded in a gift hospitality register.
114
Q

What are the SIX principles of the Bribery Act 2010?

A
  1. Proportionality
  2. Top level commitment
  3. Risk assessment
  4. Due diligence
  5. Communication
  6. Monitoring and review
115
Q

What are the FOUR offences relating to bribery?

A
  1. Bribing
  2. Receiving a bribe
  3. Bribing a foreign public official
  4. Failing to prevent a bribery
116
Q

What are the penalties of bribes?

A
  • If this Act is breached, there is a maximum penalty of 10 years imprisonment and/or an unlimited fine for individuals; companies face an unlimited fine
  • The Bribery Act is policed by the Serious Fraud Office
117
Q

Are companies responsible for employees corrupt acts?

A
  • Yes.
  • Unless the company can show they had adequate policies/procedures in place to combat bribery.
118
Q

what are key considerations of bribes?

A
  • Bribery Act 2010 – hospitality is not prohibited by the act, but just caution.
  • RICS Professional Statement ‘Countering Bribery, Corruption, Money Laundering and Terrorist Financing’ (1st edn, 2019)
  • Professional objectivity, openness, transparency
  • Proportionality
  • Sanctions
  • Tax implications
  • Employment contract details
119
Q

What is the RICS Guidance on money laundering?

A

Terrorist Financing and Transfer of Funds Regulations 2017

120
Q

What are the key provisions of the regulation within the terrorist financing…?

A
  1. Need a written money laundering and terrorist financing risk assessment
  2. Implement systems, policies and controls and procedures to address money laundering
  3. Adopt appropriate internal controls
  4. Staff training
  5. Comply with new customer, enhanced and simplified due diligence requirements
  6. Comply with the requirements relating to politically exposed persons (PEPs)
  7. Ensure appropriate record keeping
  8. AML checks to confirm the identity of the proposed purchaser and check the purchaser’s source of funds
  9. To include additional high-risk factors when assessing the need for enhanced due diligence and seek additional information and monitoring in certain cases eg when there are transactions between parties based in high-risk third countries
121
Q

What is money laundering?

A

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

122
Q

What Regulation concerns Money Laundering?

A
  • Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, 2017 (as amended in 2022).
  • UK has recently implemented 6th EU Anti Money Laundering Directive into the Regulations.
123
Q

What are estate agents’ legal obligations?

A
  1. Register with HMRC if they let properties over €10,000 pcm.
  2. Enhanced DD on transactions which are without economic purpose.
    Customer DD - identify, verify, address, directors, business info.
    Enhanced DD - extra procedures, e.g., high risk country or PEP.
    Other - cash limit of €10,000, business relationship monitored, and a record kept, MLRO appointed, maintain records for 5 years.
124
Q

What are the two types of due diligence?

A

Customer DD
Enhanced DD

125
Q

What is customer DD?

A
  • Identify the client and verify their identify
  • For a company, its name, company number and address
  • The names of the directors are required unless the company is listed on a regulated market
  • Obtain information on the purpose and intended nature of the business relationship
  • Proposed funding arrangements as appropriate
126
Q

What is enhanced DD?

A
  • Additional procedures for a ‘high risk third country’ or a ‘politically exposed person (PEP) or a PEP family member/business associate
  • A PEP is a term describing someone who has been entrusted with a prominent public function
  • A PEP generally presents a higher risk for potential involvement in bribery and corruption by virtue of their position and the influence that they may hold.
  • More detailed examination of the background and purpose of the transaction and increased monitoring
127
Q

what are the penalties of money laundering?

A

If failure to comply with regulations?
* Maximum sentence of 14 years and/or unlimited fine for doing.
* Maximum sentence of 5 years and/or unlimited fine for assisting.

128
Q

What are typical money laundering checks?

A
  • Public Ltd Company – London Stock Exchange Listing
  • Publicly Accountable Body – Government Ownership Control
  • Private Limited Company – Certificate of Incorp. Full Name and ID.
  • Private Individual – Passport driving licence/bank statement/3 months.
129
Q

What can firms do to prevent money laundering?

A
  • Have group-wide procedures and training on prevent money laundering and terrorist financing risks.
130
Q

What are some red flags to consider with regard to money laundering?

A
  1. Unwillingness of parties to provide identity documents
  2. Changes to parties involved in transactions
  3. Unusual transaction features, such as urgency required by parties, p
  4. Unusual currencies
131
Q

UK Government Sanctions
Anti-money laundering sanctions update March 202

A
  • Consider risks to AML policy, e.g., sanction lists contain UK citizens.
  • Use software as part of DD if a firm is more likely to engage with high-risk clients or assets.
  • HM Treasury’s ‘consolidated list’, MLRO will have access.
  • Office of Financial Sanctions Implementation (OFSI) for assistance.
132
Q

What three main areas are stated as an offence in the Proceeds of Crime Act 2022?

A

3 main areas of offence:
1. Concealing criminal property;
2. Arrangements; - facilities criminal property for a person
3. Acquisition use and possession of criminal property

133
Q

What is the guidance on bribery and money laundering?

A

RICS Professional Statement: Countering bribery, corruption, money laundering and terrorist financing 2019

134
Q

What 9 key provisions are included in the Terrorist Financing Regulation?

A
  1. Have a written money laundering and terrorist financing risk assessment.
  2. Implement systems, policies and controls to address money laundering and terrorist financing risks.
  3. Adopt internal controls
  4. Provide staff training
  5. Comply with new customer due diligence requirements
  6. Comply with requirements regarding Politically exposed persons (PEPs).
  7. Ensure record keeping, policies and procedures.
  8. AML checks must be undertaken to confirm identity of proposed purchaser and check source of funds.
  9. Include high-risk factors when assessing need for enhanced due diligence e.g. when transactions are based in high-risk third countries.
135
Q

What does RICS Professional Statement: Countering bribery, corruption, money laundering and terrorist financing 2019 state?

A

This sets out the mandatory requirements for RICS members and regulated firms in relation to bribery, corruption, money laundering and terrorist financing
It is divided into 3 parts:
1. Mandatory requirements for anti-bribery, corruption, anti-money laundering and terrorism
2. Guidance setting out supporting good practise for the above
3. Supplementary guidance on some of the concepts set out in parts 1 and 2

136
Q

What does Part 1 - Bribery and Corruption state?

A

RICS firms must:
- Not offer or accept anything that could constitute a bribe
- Have procedures in place to comply with the law
- Report suspicion
- Act with due diligence to review risks
- Retain records to show that the firm has met the requirements of this Professional Statement

137
Q

What does Part 1 - Money Laundering and terrorist financing state?

A

RICS firms must:
- Not facilitate or be complicit in ML and TF
- Have systems in place to comply with the laws
- Report suspicion
- Evaluate and review the risks
- 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

138
Q

What does Part 2 state? (Countering bribery…)

A

Practical guidance provided such as:
- Have a written policy in place
- Encourage transparency
- Setup a gifts register
- Keep up to date with the legislation

139
Q

What does Part 3 state? (Countering bribery…)

A

Provided on a range of issues including:
1. Establishing a ‘risk-based approach’:
2. WHO you act for
3. WHAT you are doing
4. WHY you are being asked to do something
- Dealing with politically exposed persons (PEPs): they are higher risk as they hold positions of influence and enhanced due diligence is required
The need to identify the beneficial ownership of a company, partnership or trust – such as by requesting a recent Certificate of Incorporation or Annual Return for a company

140
Q

What is the purpose of professional indemnity insurance?

A
  • To protect clients and yourself when a duty of care is breached
  • when claims for damages arise
141
Q

How long should you store valuation files for? Why?

A
142
Q

What is the purpose of ToE?

A
  • provide clarity with client
  • protection in terms of PII
  • helps to ensure good level of service is met
143
Q

What would you do if you carried out a large loan security valuation and the customer sent you a case of Champagne?

A
  • Under CBRE RISE values of ‘Integrity’, there is guidance on gifts.
  • Excessive gifts can be seen a conflict of interest, or bribe.
  • All gifts must be reported on Gifts and Hospitality Declaration Form.
  • As a general rule, employees can give/accept gifts or events tickets up to the value of £100 per person.
144
Q

If unsure about a gift what would you do?

A
  • If unsure, you must consult the Compliance Director before accepting or making offers. CBRE Compliance Director is Geraldine Mash.
145
Q

What questions would you ask yourself regarding gifts?

A

Is gift prohibited by law?
Could it be interpreted as a bribe?
Could it influence business decision?
How would it be perceived if publicly disclosed?

146
Q

How do you carry out AML checks? Why is this important?

A
147
Q

What is the difference between ToE and ToB?

A

Terms of business are the general terms and conditions for a company’s operations,
while terms of engagement are the conditions for a specific project or service

148
Q

What might you find in terms of business?

A
  • Payment of fees
  • Liability
  • Money Laundering and sanction regulations
  • Charges and expenses
149
Q
A

Tilly Rees SoE (46 decks)

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