Professional Practice Issues Flashcards
What are the key bits of legislation?
Bribery Act 2010 and Proceed of Crime Act 2002
What is the Bribery Act 2010?
Aims to reduce bribery in the UK and abroad
Based on 6 principles:
- Proportionality
- Top level commitment
- Risk assessment
- Due diligence
- Communication
- Monitoring and review
What is a bribe?
The giving, offering or receiving an advantage such as payment, gift or service for an action which is illegal or a breach of trust
What are the four offences set out by the Bribery Act?
- Bribing
- Receiving a bribe
- Bribing a foreign official
- Failing to prevent a bribe
Who is responsible for employee’s actions?
Companies - unless they can show they had adequate policies and procedures in place to combat bribery
What are the penalties for breaching the Bribery Act?
Policed by Serious Fraud Office (SFO)
- Max penalty of 10 years in prison or unlimited fine
- There is a defence is companies show they have adequate policies in place
What is money laundering?
- When proceeds of crime are disguised or converted then realised as legitimate assets
What statutory regulations govern money laundering?
Money Laundering, Terrorist Financing and Transfer of Funds 2019
What are the key provisions of Money Laundering, Terrorist Financing and Transfer of Funds 2017?
(9 things- RSITDPRAH)
- Requirement to have a written risk assessment
- Implement systems, policies and controls
- Adopt appropriate internal controls
- Provide staff training
- Comply with DD requirements (CDD and EDD)
- Comply with requirements relating to PEPs
- Ensure appropriate record keeping and procedures
- Undertake AML checks to confirm ID of purchaser and check source of funds
- Include high risk factors when assessing need for EDD and seek additional information in required cases
What are the requirements for agents under Money Laundering, Terrorist Financing and Transfer of Funds 2019 ?
- Require agents to register with HMRC within 12 months if they let properties more than $10,000 a month
- Must register with HMRC on an annual basis
- Limit to 10,000 euros cash
- Detailed record keeping required
- Senior member has to take responsibility for compliance
- Nominate a Money Laundering Reporting Officer to report suspicions to National Crime Agency
- Must maintain records for a minimum of 5 years and report any discrepancies to companies house
- CDD checks required on vendors, purchasers, landlords and tenants
- EDD checks required if red flags occurr
Firms must have policies in place to identify transactions which are:
- Complex
- Unusually large
- Unusual patterns or transactions
- Without apparent economic or legal purpose
What are the levels of Due Diligence checks?
- Customer DD
- Enhanced DD
Talk me through CDD
- Identify client and verify identity (passport, licence etc)
- Identify the beneficial owners of the client (check companies house)
- For a company, name, company number and registered office required
- Names of directors (unless listed on regulated market i.e LSE)
- Obtain info on the purpose and nature of business relationship and proposed funding
Talk me through EDD
- Essentially requires additional evidence and monitoring
- Additional procedures required for any transaction involving a ‘high risk third country or ‘PEP’ (anyone with a prominent public function)
- PEPs have more influence and present higher risk for bribery or corruption
- More detailed background and purpose of transaction and increased monitoring
What are the penalties for non-compliance with Money Laundering, Terrorist Financing and Transfer of Funds 2019?
- Max 14 year sentence or unlimited fine for assisting with money laundering
- Max 5 years sentence or unlimited fine for failing to report or tipping someone off
