Ethics P2 - Professionalism (Bribery, AML, Negligence) Flashcards
Do you know any legislation in relation to bribing?
Bribery Act 2010
What is the aim of the Bribery Act?
To reduce bribery in business in the UK and abroad
PTRDCM
What are the 6 principles of the Bribery Act?
- Proportionality
- Top level commitment
- Risk Assessment
- Due Diligence
- Communication
- Monitoring and Review
What are the offences of Bribery?
- Bribing
- Receiving a bribe
- Bribing a foreign public official
- Failing to prevent a bribe
Is the offering of hospitality a bribe?
No - if it is reasonable and proportionate hospitality AS LONG AS it is accurately recorded
What steps do your company take to avoid bribery?
- Identify potential risks
- Staff Training
- Provision of clear policies
- Regular Reviews
Who polices the Bribery Act?
Serious Fraud Office
What are the penalties to a breach of the bribery act?
- Max 10 years in prison (for individuals)
- and/or unlimited fine (for individuals and companies)
Are you aware of any guidance on Money Laudering?
Money Laundering, Terrorist Financing and Transfer of Funds 2017 - as amended 2019
What is the definition of Money Laundering?
When proceeds of criminal activity are disguised or converted and then realised as legitimate assets
What does the Money Laundering, Terrorist Financing and Transfer of Funds cover?
Estate Agency work and relevant financial business work in the UK
What are the key provisions of the Money Laundering, Terrorist Financing and Transfer of Funds act?
- Conduct a written money laundering and terrorist finance risk assessment for the firm
- Implement systems, policies and controls and procedures to address ML and TF risks
- Adopt appropriate internal controls
- Provide staff training
- Comply with DD requirements
- Comply with legislation relating to PePs
- Ensure appropriate record keeping
- Undertake AMLs
What are the levels of due diligence for AML?
- Simplified
- Customer
- Enhanced
What process do you take for customer due diligence?
Identify and verify the client and their address
Purpose and nature of business
If a company - company details and the above of any person with significant control.
What process do you take for enhanced due diligence?
More detailed examination of the background and purpose of the transaction and increased level of monitoring is needed.
What are the penalties to assisting with Money Laundering?
Max 14 years prison and/or unlimited fine
What are the penalties for tipping someone off that they are under suspicion for Money Laundering or failing to report suspicion?
Max 5 years prison and/or unlimited fine
Are you aware of any RICS guidance in relation to Bribery?
RICS Professional Statement on Countering Bribery, corruption, money laundering and terrorist financing 2019
What does the RICS Professional Statement on Countering Bribery, corruption, money laundering and terrorist financing 2019 set out?
Mandatory globally applicable requirements for RICS members and regulated firms in relation to bribery, corruption, money laundering and terrorist financing. Effective from September 2019.
What are the mandatory requirements fir RICS firms under the Professional Statement regarding Bribery?
- Not offer or accept anything that constitutes a bribe
- Have procedures in place to comply with the law
- Report suspicious activity
- Act with due diligence to perform written evaluations
- Retain records
What are the mandatory requirements fir RICS firms under the Professional Statement regarding AML?
- 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
- Used third party reliance checks
- Appropriate understanding of the purpose of transaction
- Verify client ID
- Retain records
What is the definition of Negligence?
A duty of care exists to clients and third parties, using a ‘reasonable care and skill’. When breached, and there is a loss, a claim for damages arise.
What is the allowed margin of error in a valuation?
The principle of 10% is used. This may be +-5% for straight forward properties and +-10% if there are exceptional features.
How long does a third party have to claim negligence?
6 years
OR 3 years after knowledge with a long stop date of 15 years
How can you avoid negligence claims?
- Clearly understand the clients objectives
- Confirm precise instructions and scope of work in writing
- Ensure competence
- Undertake the work in accordance to RICS guidance
- Keep detailed records
- Keep up to date with market knowledge
- Cap PII on TofE
