Ethics , Rules of Conduct and Professionalism: Professional Practice Issues Flashcards
What key legislation relates to Bribery?
Bribery Act (2010)
What is non bribery driven activity?
Business activities that genuinely seeks to promote and improve the image of a firm.
What is the purpose of the Bribery Act?
Aims to reduce Bribery in business in the UK
What is a bribe?
A bribe is the:
1. Giving
2. Offering
3. Promise
4. Receiving of an advantage such as a service or gift
for an action that is illegal
The Six principles of Bribery act?
- Proportionality
- Top level commitment
- Risk Assessment
- Due Diligence
- Communication
- Monitoring and review
What are the four offences in relation to bribery?
- Failing to prevent Bribery
- Receiving a bribe
- Bribing a foreign/public official
- Failing to prevent bribery
What are the penalties relating to bribery?
Bribery is policed by the serious fraud office
1. Penalty of 10 years imprisonment or an unlimited fine for individuals
What document relates to Money Laundering?
Terrorist Financing, Transfer of Funds, Regulations, 2017
What is Money Laundering?
Proceeds of criminal activity are concealed/ disguised or converted and then realized as legitimate assets
What do the Terrorist Financing, Transfer of Funds, Regulations 2017 provision?
- Requirement to have a written money laundering and terrorist financing risk assessment
- Have systems in place to address money laundering
- Adopt appropriate internal controls
- Provide training
- Comply with customer, enhanced, simplified due diligence requirements
- Comply with docs relating to PEPs
- Ensure record keeping
- AML checks must confirm identify and source of funds
- To include high risk factors (countries, in high risk countries)
What are Estate Agents Obligations?
- The regulations require letting agents to register with HMRC if they let properties for more than 10k euros per month.
- CDD checks on vendors, purchasers, LLs, tenants will have to be taken on new sales
- EDD checks will have to be undertaken if red flags appear
what transactions have the potential for risk?
- Complexed or unusually large
- Contain unusual patterns/transactions
- Without apparent economic or legal purpose
What is a CDD and what does it involve?
- Check identity
- Identify beneficial owners (Companies House)
- Gain more information surrounding nature of business relationship
What is EDD and what does it involve?
- More exploration around background of person
- If they have the potential to be PEP
- They require additional monitoring and research
What are the penalties for not complying with ‘Terrorist Financing, Transfer of Funds, Regulations 2017’
- 14 Years in Prison and unlimited fine
- 5 years prison sentence for tipping of a person that they are under investigation + unlimited fine
What are the typical requirements for money laundering CDD checks?
PLC = London Stock Exchange Listing
Public Accountable Body = Government Ownership/ Control
PLC = Certificate of Incorporation, Full name, registered number, business adress
Private Induvial - Passport, Bank Statement, Utility Bill
Bribery Red Flags
- Unwillingness to cooperate
- Changes to parties involved
- Unusual transaction features
- Payment of fees in unusual currencies
- Unusual transaction features - loss making, urgency no purpose of transaction
What does the ‘Anti-Money laundering actions update, 2022’ provide?
- Understanding risks/red flags
- using software as part of due-diligence
- Checking existing clients regularly where they present a ‘high risk’
- What do to if your client is a possible match on the sanctions list.
What is the ‘Proceeds of crime 2002’ Act?
- Provides powers for enforcement to recover funds from criminal activities
- Also sets criminal offences intended to combat money laundering
What are the three main arears of offense against in relation to the ‘Proceeds of Crime Act 2002’?
- Concealing criminal property
- Arrangements - Facilitating a criminal arrangement.
- Acquisition use - If a person, acquires, uses or has possession of a criminal property
What RICS guidance relates to bribery, corruption?
RICS Professional Standard ‘Countering Bribery, corruption, money laundering and terrorist financing: 2019’
What does the RICS Professional Standard ‘Countering Bribery, corruption, money laundering and terrorist financing: 2019’ set out?
Sets out the mandatory, globally applicable requirements for RICS members and regulated firms in relation to Bribery, Corruption, money laundering and terrorist financing’
What does the RICS Professional Standard ‘Countering Bribery, corruption, money laundering and terrorist financing: 2019’ set out? Cont…..
- Mandatory Requirements for anti- bribery, corruption.
- Guidance on good practice for the above.
- Supplementary Guidance
What does the RICS Professional Standard ‘Countering Bribery, corruption, money laundering and terrorist financing: 2019’ PART 1 set out?
Bribery and Corruption
1. Not to offer a bribe
2. Have procedures in place
3. Report suspicion to relevant authority
4. Act with Due Diligence
5. Retain records to show acting within the professional code
6. M/F not facilitate ML or TL
7. Have Systems to comply with the laws
What does the RICS Professional Standard ‘Countering Bribery, corruption, money laundering and terrorist financing: 2019’ PART 2 set out?
Guidance driven
1. Set up gifts register
2. Keep up to date with legislation
3. Encourage Transparency
4. Publish Code of behavior
What does the RICS Professional Standard ‘Countering Bribery, corruption, money laundering and terrorist financing: 2019’ PART 3 set out?
Supplementary Guidance
1. Establishing a risks based approach (who, what, why?)
2. Dealing with a PEP
3. Importance of identifying beneficial ownership.
The Bribery Act 2010
Offences include:
Bribing another person (offering, promising, or giving a bribe).
Being bribed (requesting, agreeing to receive, or accepting a bribe).
Bribery of a foreign public official.
Failure of a commercial organisation to prevent bribery (strict liability offence unless the company has adequate anti-bribery procedures)
What is the Proceeds of Crime 2002 Act
Addresses money laundering risks in property transactions.
Requires professionals, including estate agents and solicitors, to report suspicious activity.
Criminalises handling or benefiting from criminal property.
What are the Money Laundering Regulations 2017?
Implements customer due diligence (CDD) obligations for real estate professionals.
Requires identity checks on buyers, sellers, and beneficial owners.
Estate agents and property professionals must report suspicious transactions to the National Crime Agency (NCA) via a Suspicious Activity Report (SAR)
What is the The Fraud Act 2006?
Criminalises fraud by false representation, failure to disclose information, or abuse of position.
Relevant to misrepresentation in property transactions and fraudulent financial arrangements.
What is the Criminal Finances Act 2017
Introduced Unexplained Wealth Orders (UWOs), compelling individuals to explain the source of wealth used to purchase property.
Targets high-risk, high-value real estate transactions linked to illicit finance
What is the Economic Crime (Transparency and Enforcement) Act 2022?
Created the Register of Overseas Entities requiring foreign owners of UK property to disclose their beneficial owners.
Strengthens transparency to prevent money laundering through property.
