Gifts, bribery and corruption Flashcards
What is a bribe? What is the key legislation relating to Bribery?
The giving, offering, promising or receiving of an advantage such as a payment, gift or service for an action which is illegal or a breach of trust.
Bribery Act 2010 and Proceeds of Crime Act 2002.
What are some of the key principles of the Bribery Act 2010?
Bribery Act 2010 came into force 1st July 2011 – new corporate criminal offence of failing to prevent bribery.
Applies to all UK national wherever they are. Important to note that hospitability, promotional and/or other low value business expenditure which seeks to genuinely promote and improve the image of firm in an acceptable and key part of doing business.
Registered if required by firm in accordance with anti-bribery procedures. Six key principles:
o Proportionality
o Top level commitment
o Risk assessment
o Due diligence
o Communication
o Monitoring and review
What else is included in the Bribery Act 2010?
Companies responsible for employees’ actions unless can prove adequate policies and procedures in place.
Certain forms of lavish corporate entertainment can be considered as bribery, however Gov guidance states hospitality not prohibited by the Act.
Offering client reasonable and proportionate hospitality will not constitute an offence, such as tickets to major event, as long as accurately recorded in company’s gifts register.
Companies must take steps to prevent bribery including identification of potential risks, staff training, and provision of clear policies.
Remember never to accept gift or hospitality from 3rd party supplier or contractor.
What are the four offences under the Bribery Act 2010?
- Bribing
- Receiving a bribe
- Bribing a foreign public official
- Failing to prevent bribery
What are some of the penalties if an offence is committed under the Bribery Act 2010?
Act policed by Serious Fraud Office.
Max. penalty for individuals = 10 years imprisonment and / or unlimited fine.
Companies face unlimited fine. Recent case – 2016 SFO successfully prosecuted the Swett Group in respect of bribe offered to win Middle Eastern business by subsidiary company and were fined £1.4m.
RICS then fined company £125,000 and costs.
What are your company’s policies and procedures relation to bribes, hospitality and gifts?
Bribes – completely unacceptable. Zero tolerance. In compliance with the law.
Gifts & hospitality – anything over £100 need to inform compliance straight away and ask if can accept / give / go to event – remember, it is not just the price of the ticket, includes meals & drinks all day too.
We have started a new procedure that was encouraged by seasonal gifting, any packages (wine boxes for example) which come through the post room are recorded and a sticker is placed on them saying ‘compliance is aware – please register this gift’ before being passed onto the intended recipient.
The recipient must then notify compliance of the gift and its value.
Cash gifts – at CBRE we do not accept cash or any cash equivalent.
Vouchers – I know they exist in agency but I do not give or receive them. A raffle draw is the best way to deal with agency gifts.
Think about pitch work – even if we say no to a company offering a gift when they’re pitching, we still question their ethics.
CBRE’s view is to not work with this company going forward.
Remember – CBRE is an American company, therefore the firm is also subject to US legislation such as Foreign Corruption Policy Act (FCPA)
What are the key considerations when dealing with gifts & hospitality?
- Bribery Act 2010 compliance.
- Own firm’s procedures.
- Professional objectivity, openness and transparency.
- Proportionality.
- Tax implications & money laundering.
- Employment contract details.
What is money laundering?
When proceeds of criminal / illegal activities are disguised or converted and then realised as legitimate assets – made ‘clean’
What is the main legislation relating to money laundering?
Money Laundering, Terrorist Financing and Transfer of Funds (Information relating to the Payer) Regulations 2017.
These regs cover estate agency work and relevant financial business work.
What are the key provisions of the new money laundering regulations?
- Conduct written money laundering and terrorist financing risk assessment for firms
- Implement systems, policies and controls to meet regs
- Appropriate internal controls
- Staff training
- Comply with new customer DD, enhanced DD and simplified DD
- Comply with requirements relating to Politically Exposed Persons (PEPs)
- Record keeping
- AML checks must be undertaken to confirm identity of proposed purchaser of property & check source of funds
Customer DD
verify identity of client based on reliable independent source (passport or DL).
Must identify beneficial owner.
Company name, number and registered address required.
Names of directors required unless company listed on regulated market.
Obtain info on purpose and nature of business and proposed funding arrangements.
Enhanced DD
Additional procedures required for person established in a ‘high risk third country’ or a ‘politically exposed person’ (PEP) or a PEP family member.
An individual who has been trusted with prominent public function.
Generally presents higher risk for potential involvement in bribery & corruption.
More detailed examination of background and increased level of monitoring required.
Simplified DD
Appropriate for transactions where low risk of ML or terrorist financing. Lowest form of DD – not appropriate for property
What are some of the other requirements under the ML regulations?
Firms must register with HMRC on annual basis.
Limit of 10,000 euros for the acceptance of cash payments.
RICS has issued list of red flag indicators to alert surveyor as to potential money laundering or terrorist financing activities.
Detailed record keeping. Senior member of staff appointed to take responsibility of all compliance (Geraldine Mash).
Money Laundering Reporting Officer (Geraldine) must report any suspicious with a Suspicious Activity Report (SAR) to the National Crime Agency.
Firm must maintain records for min. 5 years.
HMRC responsible for policing of Regs for estate agents.
What are some of the penalties for non-compliance with the regulations?
Max. 14 yrs prison and / or unlimited fine for assisting with money laundering.
Max. 5 yrs prison and / or unlimited fine for tipping off person by informing them that they are under suspicion or for failing to report suspicion.
