Ethics - Money Laundering, Bribery, Gifts and Hospitality

Question 1

Which RICS document covers Money Laundering?

Answer 1

RICS Countering Bribery and Corruption, Money Laundering and Terrorist Financing, 1st Edition (Professional Standard, effective from Sept 2019)

Question 2

Which three parts are included in RICS Countering Bribery and Corruption, Money Laundering and Terrorist Financing, 1st Edition?

Answer 2

Part 1 – Mandatory requirements
Part 2 – Good practice guidance
Part 3 – Supplementary guidance on Parts 1 &2

Part 1 split into two sections:
1. Bribery and corruption
2. Money laundering and terrorist financing

Question 3

Under Bribery & Corruption what must a RICS regulated firm do?

Answer 3

1. Must not offer or accept bribes
2. Must have relevant plans and policies
3. Must report any suspicious activity
4. Record their risk evaluation in writing, including the required due diligence
5. Full record evidencing compliance with the Professional Standard

Question 4

Under Bribery & Corruption what must a RICS member do?

Answer 4

1. Must not offer or accept bribes
2. Adequate knowledge of the Bribery Act 2010 and Professional Standard
3. Report any suspicious activity

Question 5

What is Bribery?

Answer 5

Bribery is offering, giving, receiving, or asking for something valuable to influence someone to act dishonestly or unfairly.

Question 6

Which Act covers Bribery? And what are its aims?

Answer 6

Bribery Act 2010

Aim to reduce bribery in business in UK & abroad.

Question 7

Name an area not prohibited by the act?

Answer 7

Hospitality

Question 8

What are the 4 offences 罪行of bribery?

Answer 8

1. to offer or give a bribe
2. to receive or accept a bribe
3. bribing a foreign official
4. failure to prevent a bribe

Question 9

What are the 6 fundamental principles to be aware of Bribery Act 2010?

Answer 9

1. Proportionality
2. Top Level Commitment – from senior management
3. Risk Assessment
4. Due Diligence
5. Communication
6. Monitoring and review

Question 10

Who is the Bribery Act policed by?

Answer 10

Serious Fraud Office

Question 11

What is the penalty for bribery?

Answer 11

10 years in prison or an unlimited fine

Question 12

Under the bribery act, when would a facilitation payment be permitted

Answer 12

When you are under duress 脅迫 and there is a threat or harm to life

Question 13

What’s the difference between a gift and a bribe ?

Answer 13

A gift is a small gesture, a bribe is under the impression that some gain will result.

Question 14

What is whistleblowing?

Answer 14

Whistleblowing is reporting wrongdoing, such as fraud or misconduct, within an organisation

Question 15

RICS stance on gifts, hospitality and cash?

Answer 15

• Never accept gift/hospitality from 3rd party suppliers or contractors
• Certain types of luxurious corporate entertainment could be classified as bribery
• Offering a client reasonable and proportionate hospitality (e.g. sport tickets and meal) will not constitute an offence as long as this is accurately recorded in gifts/hospitality register.

Question 16

VOA’s process (Gifts)?

Answer 16

MUST NOT ACCEPT benefits of kind unless TRIVIAL NATURE無關緊要的.
* G&H REPORTING FORM, to record any £25+ offered/accepted
* business manager then RECORDS on G&H REGISTER

If gifts received in VOA office without warning – return and record on G&H Register.

Question 17

VOA vs RICS on gifts and hospitality?

Answer 17

VOA refuses / RICS accepts free tickets for cultural or sporting events
VOA refuses / RICS accepts gifts of bottles of wine or spirits
VOA refuses / RICS accepts gift from client for job well done / good case outcome

Question 18

What is Corruption?

Answer 18

Corruption is the misuse of power for personal gain, whether in public office or business.

Question 19

What is fraud?

Answer 19

Fraud Act 2006

Question 20

What is Fraud詐欺罪?

Answer 20

Fraud is lying or cheating to gain money or advantage.

Question 21

What is Money Laundering?

Answer 21

Hiding the source of illegal money to make it appear as legitimate assets

Question 22

What Act covers Money Laundering?

Answer 22

• Proceeds of Crime Act (POCA) 2002
• Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and amended in 2019 (the MLRs) 2022?

Criminal Finances Act 2017
Sanctions and Anti-Money Laundering Act 2018
Economic Crime (Transparency and Enforcement) Act 2022

Question 23

Under Money Laundering, Terrorist Financing and Transfer of Funds Regulations, what must a surveyor do before accepting an instruction?

Answer 23

Due Diligence Checks

Question 24

What is Customer due diligence (CDD)/know your customer (KYC)

Answer 24

Taking the appropriate steps to ascertain who the customer or client is and, if relevant, their ultimate beneficial owner is and counterparty. These can be relatively simple checks to verify the identity of the customer/client or may entail deeper investigations. This is a legal and regulatory requirement in many countries

Question 25

How many levels for due diligence check?

Answer 25

3 1. Simplified 2. Standard 3. Enhanced

Question 26

What is Simplified due diligence?

Answer 26

- approriate for Public Authority or a financial institution - not appropriate for any doubts on doc provided or a suspicion of ML

Question 27

What is Standard due diligence (SDD)?

Answer 27

- Often used for individuals, compaines and trusts - verify the customer's identity and and the nature of purpose of the transcation - incl. requesting gob't issued identification doc (like driving licence), for a company, its name, company number and registered address, and source of funds

Question 28

What is Enhanced due diligence (EDD)?

Answer 28

- more checking and monitoring is required to complete the client profile, requiring continued review of the client or the transaction - particularly person/business in high-risk countries or **Politically exposed persons (PEPs) **or customer from high-risk third country- Holding an important public role in a country or international organization - present higher risk due to links and influence

Question 29

What is Red Flags?

Answer 29

Red flags are warning signs that may indicate money laundering or terrorist financing in real estate

Question 30

Can you name any Money Laundering Red Flags?

Answer 30

* Cash-only buyers * An unusual sale price (too low or too high) * Payments from multiple/different source to counterparty * Funds provided by unknown third parties

Question 31

What is the five main categories of red flags that property professionals need to be aware of?

Answer 31

1.** The client** – Who they are and their background. [Politically exposed persons (PEPs)] 2. **The parties **– Other people involved in the transaction. 3. **The source of funds** – Where the money is coming from [funds provided by unknown parties] 4. **The transaction **– The nature and details of the deal [sale price too low or too high/ cash buy] 5. **The instructions** – The specifics of what is being requested.

Question 32

What are the three layers of the defence system to protect businesses against money laundering?

Answer 32

1. **Front-line staff** – Employees who first interact with clients. 2. **Policies, systems, and controls** – Including checks like electronic passport verification. 3. **Senior management and internal audits** – Oversight from leadership and specialists.

Question 33

Who is the money laundering officer in your organisation? Who would you report it to?

Answer 33

Toby Nerval - Chief Financial Officer. Report issues to line manager

Question 34

Do you know the global money laundering and terrorist financing watchdog?

Answer 34

The Financial Action Task Force (FATF)

Question 35

What are the Key elements of UK Anti-Money Laundering requirements?

Answer 35

* **Registration** – Firms covered by the rules must register with an AML supervisor. For estate agents, lettings agents, and property managers, this is **HMRC**. * **Global Compliance** – All branches and subsidiaries, even those outside the UK, must follow AML policies when doing regulated activities. * **Risk Assessment** – Firms must assess money laundering risks and keep a written record of their findings – min 5 years * **Customer Checks (CDD)** – Estate agents must verify customers and their beneficial owners before starting business. Lettings agents must check all parties before confirming a tenancy agreement. * **Enhanced Due Diligence (EDD)** – Extra checks are required for higher-risk situations. * **Politically Exposed Persons (PEPs)** – Firms must have systems to check if a customer (or their close associates/family) is a PEP, as they pose a higher risk. *App - Thridford* * **Staff Training** – Employees must receive regular AML training, including data protection. * **Reporting Suspicious Activity** – Firms must report any suspected or attempted money laundering or terrorist financing.* Other requirements for the money laundering regulations? - Firms must register with HMRC regularly - Max 10,000 euros for acceptance of cash - Senior member must be appointed tot take responsibility for compliance - Money Laundering Reporting Officer must be nominated and report any suspicions to the National Crime Agency - Firm to maintain records for minimum of 5 years

Question 36

What are the penalties for money laundering/ under Proceeds of Crime Act (POCA)?

Answer 36

- Maximum 14 years or unlimited fine for assisting - Maximum of 5 years or unlimited fine for failing to report a suspicion of money laundering

Question 37

What are the Proceeds of Crime Act?

Answer 37

Proceeds of Crime Act 2002 - allows UK authorities to recover money and assets gained from crime and creates criminal offences to fight money laundering.

Question 38

The keys offences under POCA 2002?

Answer 38

* Concealing, Disguising, Converting, or Transferring Criminal Property * Arrangements for use of Criminal Property * Acquisition and Possession of Criminal Property * Disclosing / tripping off 洩漏that a Suspicious Activity Report (SAR) has been submitted