What must firms policies on Money Laundering & Terrorist financing address?
- Requirements to understand the source of funds in high risk situations
- Identification of PEP and PSC (person of significant control)
- Process to be followed for customer due diligence
- Situations where simplified vs enhance due diligence are appropriate
- Be proportionate to the size and work a firm does
- Identify beneficial owner of client involved within transaction
- Appoint senior person to ensure compliance / policies
What are the 4 crimes under the Bribery Act 2010?
- Receiving a bribe
- Giving a bribe
- Bribing a public figure
- To not have procedures in place to mitigate / prevent bribery
What must RICS firms do in relation to money laundering / terrorist financing?
- Not faciliate or be complicit in
- Have systems & training to comply with laws
- Report any issues to relevant authorities
- Ensure responses to risks are appropriate including checks
- Reliance only where appropriate level of confidence in the quality of information from a 3rd party
- Verify the identity of client through basic identity checks
What must RICS members do in relation to money laundering / terrorist financing?
- Keep abreast of training / regulation offered to them
- Comply with employer’s policies
- Report suspicions of money laundering
What must RICS firms do in relation to bribery & corruption?
- Not offer or accept anything that could constitute a bribe
- Have plans in place to comply with applicable laws
- Report activity / breaches they are aware of
- Act with due dligence to perform periodic evaluations of risks facing the firm
- Retain information on how firm meets the requirements
- Register gifts etc
- Provide guidance to staff
- Appoint contactable person for ethical matters
What must RICS members do in relation to bribery & corruption?
- Ensure adequate knowledge on bribery and corruption
- Report
- Not offer or accept
What registers must a firm have?
- Gift
- Hospitality
- Political contributions
- Charitable donations
- Potential CoI
What must policies not tolerate in relation to bribery?
- Facilitation payments (where legal, must have head office sign off)
- Bribes
- Failure to report CoI
- Price fixing
What is the process if there is a difference in the PS and local law?
- Record the conflict in writing
- Pursuant of legislative, regulatory or court order takes precedent
What is included in a Customer Due Diligence check?
- Identify the transacting party
- Verify the identification is valid
- Carry out additional checks where higher risk
Simplified Due Diligence - where low risk, checking client’s status such as local company register. UK this is never the automatic option
Enhanced Due Diligence - where higher risk, PEP
Set out in firms policy which is appropriate when
Review existing clients regularly (every 3 years)
What does a risk based approach consider when monitoring Bribery, Money Laundering & Terrorist Financing?
- Who you act for
- What you are doing
- Why you are being asked to do something
What should be considered when reviewing the risk of Money Laundering / Corruption with a client?
- Whether there is a high risk e.g. a PEP involved in the ownership
- If another professional has onboarded them, under what circumstances, nature of transaction, jurisdiction
- Common approach across the business
- Where the country of the client sits on Corruption Perceptions Index (by Transparency International)
- What activities are of higher risk of bribery / corruption
What is a beneficial owner?
The person who ultimately owns or controls a legally defined minimum percentage of shares or voting rights
UK this is 25% - other countries it may be 10%
May be the owner of a trust
Can be identified by requiring documents such as Annual Return
What authorities in the UK would you report to for Bribery or Money Laundering?
Bribery - Office for Financial Sanctions
Money Laundering - Financial Action Task Force
Oh Fuck Sake
FAT Faffer
What is a PSC?
Person of Significant Control
Have significant control over company,
What have the RICS published as red flags? (AML)
Anti Money Laundering Red Flag Indicator
- Large cash payments
- PEP
- Sanctions
- Project potentially loss making
- Avoids personal contact without good reason
What would you do if your client is in a country where the UK has imposed sanctions?
I would follow the sanction guidance published by Office for Financial Sanctions
Oh Fuck Sake
If subject to freeze, must freeze any assets held
Must report to OFS if suspect a breach of financial sanctions has occurred, person is a designated person or hold frozen assets
Check Dilisense for sanctions and PEP across a number of countries
Subscribe to HM Treasury Sanctions’ Notices
Contact OFS for assistance
What categories of red flags have the RICS published?
- Client
- Parties
- Source of Funds
- Transaction
- Instructions
