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APC - Autumn 2024 > Ethics: Part 2 (Professional Practice Issues) > Flashcards

Ethics: Part 2 (Professional Practice Issues) Flashcards

1
Q

What is the key Bribery legislation?

A

Bribery Act 2010

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2
Q

What is an acceptable and key part of doing business in accordance with anti-bribery?

A

Hospitality, promotional or other ‘low value’ business expenditure which promotes and improves the image of a firm

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3
Q

What is the aim of the Bribery Act 2010 and what is bribery?

A

Sets out the procedures to reduce bribery in business in UK and abroad for an action which is illegal or a breach of trust

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4
Q

What 6 principles is the Bribery Act based on?

A
  1. Proportionality
  2. Top Level commitment
  3. Risk Assessment
  4. Due Diligence
  5. Communication
  6. Monitoring and Review

PTRDCM

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5
Q

What are the 4 offences of Bribery?

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

BRBF

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6
Q

Who must act to prevent bribery?

A

Yourself and your firm.

Companies are responsible also, to check they had adequate policies and procedures in place.
Companies must meet criteria to prove they have taken steps to prevent bribery.

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7
Q

What are the penalties for Bribery?

A

Policed by Serious Fraud Office
10 years in prison and/or unlimited fine

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8
Q

Who polices the Bribery Act 2010?

A

Serious Fraud Police

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9
Q

What is Money Laundering?

A

Proceeds of criminal activities are disguised or converted and then realised as legitimate assets.

The regulations cover estate agency work and ‘relevant financial business work’ inside and outside the UK by a firm

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10
Q

What steps should a member/firm undertake to reduce the risk of money laundering?

A

1 - Have written money laundering / terrorist financing risk assessment
2 - Have systems, policies and procedures in place to address the risk
3 - Adopt internal controls
4 - Provide staff training
5 - Comply with CDD and EDD
6 - Follow requirements relating to politically exposed persons (PEP)
7 - Ensure record keeping
8 - Request proof of identification and proof of funds
9 - Additional checks when assessing for EDD - more monitoring

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11
Q

What are Estate Agents’ legal obligations with money laundering?

A
  1. Register with HMRC if they let for more than £10,000/month
  2. Government guidance was updated in June 2021
  3. Individuals and businesses need to be approved and registered with HMRC to trade
  4. CDD checks
  5. EDD Checks
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12
Q

Firms are to scrutinise transactions which are:

A
  • Complex or unusually large, or
  • Contain unusual patterns of transactions, or
  • are without apparent economic or legal purpose
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13
Q

What is the penalty for failing to comply with Anti-Money Laundering?

A
  • Maximum 14 years prison and/or unlimited fine for assisting with money laundering
  • Maximum 5 years prison and/or unlimited fine for tipping off a person by informing them that they are under suspicion for money laundering
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14
Q

What are the typical requirement for money laundering checks for CDD?

A

Public limited company –> London Stock Exchange listing

Publicly accountable body –> Government Ownership / Control

Private Limited Company –> Certificate of Incorporation (inc. names of all shareholders with 25% holding) (Report any discrepancies to Companies House)

Private Individual –> Copy of passport, bank statement and proof of address

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15
Q

What EU regulation have the UK implemented re-money laundering?

A

The 7th EU Anti Money Laundering Directive

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16
Q

How would you undertake Due Diligence prior to and during instructions?

A
17
Q

If asked about AML what should you consider?

A

Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017

The RICS Professional Standard: (But the law comes first!!)

Government Guidance

Due Diligence procedures

Professional Objectivity, Openness and Transparency

“Red Flags”

18
Q

What are the “Red Flags” associated with potential Money Laundering?

A
  • Inability or unwillingness of parties to provide identity documents
  • Changes to parties involved in transactions
  • Unusual transaction features, such as unexpected urgency required by parties, potential loss-making or an unusual transaction for a client
  • Payment of fees, purchase or rental monies in unusual ceremonies
19
Q

What is the Money Laundering legislation?

A

Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, 2017 (as amended in 2023)

20
Q

What is in the Sanctions and Anti-Money Laundering Act, 2018?

A

Made light of geopolitical issues such as Ukraine

HMO Financial Sanctions Implementation (OFSI) provides regularly updated guidance regarding financial sactions

RICS Provides guidance about sanctions and estate agents’ role in enforcing these

21
Q

What are the 3 main criminal offences intended to combat money laundering (AML offences)?

A
  1. Concealing criminal property
  2. Arrangements: Becomes concerned in an arrangement they suspect
  3. Acquisition use and possession: acquires, uses or has possession of criminal property
22
Q

What does the Proceeds if Crime Act 2002 enforce?

A

Provides power to enforcement authorities in the UK to recover in criminal and civil proceedings money and other assets. With the 3 criminal offence sets to combat AML.

  1. Concealing
  2. Arrangement
  3. Acquisition
23
Q

What is the Economic Crime (Transparency & Enforcement) Act 2022?

A

Includes measures for a beneficial ownership register of overseas entities owning property in the UK
Allows easier sanctions
Strengthens investigation powers

24
Q

What does Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 outline?

A

Outlines rules to prevent money laundering and terrorist financing.

It requires businesses to verify customer identities, assess risks, keep records, report suspicious activities, train staff, and comply with regulatory supervision.

25
Q

Who policies Terrorist Financing and Transfer of Funds Regulations 2017?

A

National Crime Agency

26
Q

What must RICS regulated firms do in accordance with Bribery & Corruption (B&C)?

A
  • 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
  • Retain Records
27
Q

What must RICS regulated firms do in accordance with Money Laundering and Terrorist Financing (ML & TF)?

A
  • Not facilitate or be complicit
  • Have systems in place
  • Report suspicion
  • Evaluate and review the risks
  • Use 3rd party reliance for checks only
  • Verify the client by undertaking
  • Take a moment to understand the client and purpose of instruction
28
Q
A

APC - Autumn 2024 (2 decks)

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