Gifts Bribery and Corruption

Question 1

What type of hospitality is acceptable?

Answer 1

‘Low value’ business expenditure that promotes and improves the image of a firm is an accepted and a part of doing business.
Follow anti bribery procedures

Question 2

What is the aim of the bribery act?

Answer 2

To reduce bribery in business in UK and abroad

Question 3

What is a bribe?

Answer 3

Any giving, offering, promising or receiving of an advantage
such as a payment, gift of service
which is illegal and is a breach of trust.

Question 4

What are the bribery acts principles?

Answer 4

PTR DMC

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

Question 5

What are the offences under the act?

Answer 5

1. Bribing another person
2. Being bribed
3. Bribing a foreign public official
4. Failing to prevent a bribe.

Question 6

What must firms do?

Answer 6

ensure adequate policies and procedures are in place to combat bribery

Question 7

Who polices the bribery act?

Answer 7

Serious Fraud Office and National Crime Office

Question 8

What is money laundering?

Answer 8

proceeds of criminal activity are disguised or converted and then realised into legitimate assets.

Question 9

What are the key regulations for businesses under the ML Terrorist Financing and Transfer of Funds 2017 amended 2019?

Answer 9

1. Required to have a written ML and TF risk assessment
2. Implement systems, policies and controls and procedures to address ML and TF links.
3. Adopt internal controls
4. Provide Staff training
5. Comply with simplified due diligence
6. Comply with requirements regarding Politically exposed persons (PEPs)
7. Ensure record keeping, polices and procedures
8. AML checks - to confirm checks of identity, purchasers source of funds. before contract exchanged.
9. Enhanced due diligence for high risk factors with additional monitoring and information.

Question 10

What update in 2020 to the ML, TF and TF was made to letting agents?

Answer 10

Require letting agents to register with HMRC if they let individual properties for more than 10,000 euros/month.
CDD checks for new letting on tenants and landlords
EDD checks if a red flag occurs.

Question 11

What are the different levels of Due Diligence checks?

Answer 11

Customer Due Diligence (CDD)
Enhanced Due Diligence (EDD)

Simplified Due Diligence (SDD)

Question 12

What is Customer Due Diligence (CDD)?

Answer 12

• Identify the client and verify their identity based on a reliable independent source eg passport.
• Identify the beneficial owners of the client
• Acquire company information such as its name, company number
• Nature of the business

Question 13

What is Simplified Due Diligence (SDD)?

Answer 13

Full is CDD is not needed. A low risk of ML, basic verification may be appropriate

Question 14

What is Enhanced Due Diligence (EDD)?

Answer 14

Require more checking and monitoring and a continued review of the client. (Might be a PEP or from a high risk third country)
PEP are targeted as they have great influence

Question 15

What are key requirements under the ML Terrorist Financing and Transfer of Funds 2017 amended 2019 for firms?

Answer 15

• A senior member of staff must be appointed to take responsibility for all compliance
• A nominated person must report and suspicious with a Suspicious Activity Report (SAR) to the National Crime Agency
• Must register with HMRC on an annual basis
• Limit of 10,000 euros for acceptance of cash
• Detailed record keeping is required of all procedures

Question 16

What are the penalties for non complying with AML the regulations?

Answer 16

Max 14 years prison sentence/ or unlimited fine for assisting
Max 5 years prison sentence / unlimited fine for tipping someone off they are being looked into.

Question 17

What are AML red flags?

Answer 17

They are used to alert property professionals of individuals/business who could be associated with Money Laundering… eg…
Inability or unwillingness to provide identity docs
Changes to parties involved in the transaction
Unusual transactions
Payment in unusual currency’s

Question 18

What is the Proceeds of Crime Act 2002?

Answer 18

Gives power to enforcements authorities in the UK to recover criminal and civil money and other assets from criminal activity
Creates a set of criminal offences to combat ML

Question 19

What are the three main areas of offence under the Proceeds of Crime Act 2002?

Answer 19

1. Concealing criminal property
2. Arrangements - involved, they know or suspect on behalf of someone else
3. Acquisition use and possession of criminal property

Question 20

What does the professional statement regarding counter bribery, corruption, ML and TF 2019 set out?

Answer 20

Sets out mandatory requirements for members and firms.

Guidance on good practice

Question 21

What must RICS regulated firms do in terms of Bribery and Corruption under the 2019 RICS prof statement?

Answer 21

Don't offer or accept a bribe
Have procedures in place which comply with the law
Report suspicious activity
Retain records
Conduct necessary DD

Question 22

What must RICS regulated firms do in terms of ML and TF under the 2019 RICS prof statement?

Answer 22

No facilitate or be complicity with ML or TF
Have systems in place
Report suspicions
Evaluate Risks
Carry out third party checks
Retain Records to demonstrate the firm has met the requirements

Question 23

What procedures does your firm have in place?

Answer 23

We have a gift and entertainment policy
Anti-bribery and Corruption policy
AML Policy
Whistleblowing Procedure

Question 24

Can you give me more details regarding your gift and entertainment policy?

Answer 24

1. First question to ask myself is “would I be comfortable accepting or giving a gift/entertainment that was brought to the attention of the AY executive and the public?”
2. to assess the value of the gift/hospitality and verify the value against a reporting threshold. £120-£500 - report it to compliance, over £500 - need pre-authorisation.

Question 25

Can you give me more details regarding the Anti-bribery and Corruption policy?

Answer 25

Policy outlines that no AY employee is to be directly or indirectly offer, give, solicitate or accept any bribe in order to acquire a commercial advantage.
AY employees are responsible for detecting and reporting bribery or facilitation of payments
Must comply with AY AML regulations
When applicable use the AY whistleblowing procedure.

Question 26

What is your firms Whistle blowing procedure?

Answer 26

To contact the Designator Officer at AY for an initial interview to raise your concerns.
Determine identity disclosure.
Submit report to UK management/ Compliance director.
Investigation

Question 27

What is your firms AML policy?

Answer 27

Required to conduct different AML checks
AML checks start before establishing a business relationship. -Sell Side - at the time of appointment by a client Buy Side - when an offer has been made on the property.
AY risk assessment is carried out periodically. A Low risk client will have a 3 yearly review, High risk will be annually.

Question 28

What type of work normally attracts AML checks?

Answer 28

Buying or selling of land or property

Arranging a lease premium

Question 29

Can you give me an example of an AML check?

Answer 29

Client Due Diligence - verify all parties
Source of Funds
Source of Wealth - consistent expected income
Counterparty - opposite side of a transaction.

Question 30

What are the penalties if you fail to comply with AML regulations?

Answer 30

Assisting ML - Max 14 years in prison and or unlimited fine

Failure to report - Max 5 years in prison and or unlimited fine

Question 31

What RICS professional statement sets out global requirements for RICS members/firms?

Answer 31

Countering Bribery, Corruption, Money Laundering and Terrorist Financing 2019