Professional Practice Issues Flashcards
How is a bribe described in the Bribery Act 2010?
- Came into force 1st July 2011
- A bribe can be the giving, offering, promising or receiving of an advantage such as a payment, gift or a service for an action which illegal or breach of trust.
What are the six principles that the Bribery Act is based on?
- Proportionality
- Top level commitment
- Risk Assessment
- Due diligence
- Communication
- Monitoring and review
What are the four offences under the Bribery Act?
- Bribing
- Receiving a bribe
- Bribing a Foreign Public Official
- Failing to prevent bribery
What are the penalties under the Bribery Act?
- The bribery act is policed by the Serious Fraud Office
- If the act is breached there is a maximum penalty of 10 years’ imprisonment/an unlimited fine
- Companies face an unlimited fine
What are the money laundering regulations?
- Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, 2017 – as amended 2019
- Money laundering is when proceeds of criminal activities are disguised or converted and then realised as legitimate assets
- Not to facilitate bribes, report suspicion, act with due diligence, take appropriate procedures depending on the individual
What are the key provisions of AML regulations?
- The requirement to conduct written money laundering and terrorist financing risk assessment for the firm.
- Implement systems, policies and controls and procedures to address money laundering and terrorist financing risks and meet the requirements under the regulations.
- Adopt appropriate internal controls
- Provide staff training
- Comply with new customer due diligence, enhanced due diligence and simplified due diligence requirements.
- Comply with the requirements relating to politically exposed persons (PEPs)
- Ensure appropriate record keeping, policing and procedures
- AML checks must be undertaken to confirm the identity of the proposed purchaser of a property and check the purchasers source of funds by the vendors agent before contracts are exchanged.
What are the money laundering red flags?
- If they are secretive about who they are and the source of funds
- If they use an intermediary and disguising the real client
- Avoids person contact
- Refuses to provide information
- Has criminal associates
- Has an unusually high level of knowledge about money laundering
- Short repayment periods for borrowing
- Requests for shortcuts
- Instructions to hold money
What are the various forms of due diligence for checks for AML?
Customer DD
Enhanced DD
Simplified DD
What is customer DD?
- To identify a client and verify their identity based on a reliable independent source such as a passport or driving licence
- Identify the beneficial owners of the client
- For a company – its name, company number and address of the registered office is required
- Name of directors are required unless the company is listed on the London Stock Exchange
- Obtain information on the purposes and intended nature of the business relationship and proposed funding arrangements as appropriate
What is enhanced DD?
- Additional procedure is required for any transaction or business relationship involving a person established in a high risk country, or a politically exposed person (PEP)
- Person who is entrusted with a prominent public function either in the UK or abroad
- PEP presents a higher risk for an involvement in bribery
- More detailed examination of the background and purpose of the monitoring is required
What is Simplified DD?
- Appropriate for transactions where there is a low risk of money laundering
- Not appropriate for property transactions
- Firms must register with HMRC on an annual basis
- There is a limit of 10,000 euros for the acceptance of cash
- RICS has issued a list of Red Flag indicators to alert a surveyor as to potential money laundering or terrorist finance activities
- Detailed record keeping of procedures undertaking is required
- A senior member of staff needs to be a compliance officer
- Maintain records for a minimum of 5 years
What are the penalties for failing to comply with AML?
- Maximum 14 years’ prison sentence and/or unlimited fine for assisting with money laundering
- Maximum 5 years’ prison sentence and/or unlimited fine for tipping off a person who is under suspicion
What are the main areas of offence under the Proceeds of Crime Act 2002?
- Concealing criminal property
- Arrangements: Assisting a criminal to obtain, hide or invest funds
- Acquisition use and possession of criminal property
What are the criteria for proving a negligence claim?
- Duty of care owed
- Breach of the duty of care
- Loss that was caused by that breach
What does the Limitation Act 1980 state are the limits on the period for negligence?
Contract: 6 years from the date of the negligent act, breach of contract or omission. (If later) up to 3 years from the date of knowledge of the damage. Claims for negligence are barred for any period longer than 15 years after the negligent act, breach of contract or omission.
Tort: 6 years from the date the claimant suffered the loss
