Professional Practice Issues

Question 1

What are the key bits of legislation?

Answer 1

Bribery Act 2010 and Proceed of Crime Act 2002

Question 2

What is the Bribery Act 2010?

Answer 2

Aims to reduce bribery in the UK and abroad

Based on 6 principles:

1. Proportionality
2. Top level commitment
3. Risk assessment
4. Due diligence
5. Communication
6. Monitoring and review

Question 3

What is a bribe?

Answer 3

The giving, offering or receiving an advantage such as payment, gift or service for an action which is illegal or a breach of trust

Question 4

What are the four offences set out by the Bribery Act?

Answer 4

1. Bribing
2. Receiving a bribe
3. Bribing a foreign official
4. Failing to prevent a bribe

Question 5

Who is responsible for employee’s actions?

Answer 5

Companies - unless they can show they had adequate policies and procedures in place to combat bribery

Question 6

What are the penalties for breaching the Bribery Act?

Answer 6

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

Question 7

What is money laundering?

Answer 7

• When proceeds of crime are disguised or converted then realised as legitimate assets

Question 8

What statutory regulations govern money laundering?

Answer 8

Money Laundering, Terrorist Financing and Transfer of Funds 2019

Question 9

What are the key provisions of Money Laundering, Terrorist Financing and Transfer of Funds 2017?

(9 things- RSITDPRAH)

Answer 9

1. Requirement to have a written risk assessment
2. Implement systems, policies and controls
3. Adopt appropriate internal controls
4. Provide staff training
5. Comply with DD requirements (CDD and EDD)
6. Comply with requirements relating to PEPs
7. Ensure appropriate record keeping and procedures
8. Undertake AML checks to confirm ID of purchaser and check source of funds
9. Include high risk factors when assessing need for EDD and seek additional information in required cases

Question 10

What are the requirements for agents under Money Laundering, Terrorist Financing and Transfer of Funds 2019 ?

Answer 10

• 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

Question 11

Firms must have policies in place to identify transactions which are:

Answer 11

• Complex
• Unusually large
• Unusual patterns or transactions
• Without apparent economic or legal purpose

Question 12

What are the levels of Due Diligence checks?

Answer 12

1. Customer DD
2. Enhanced DD

Question 13

Talk me through CDD

Answer 13

• 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

Question 14

Talk me through EDD

Answer 14

• 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

Question 15

What are the penalties for non-compliance with Money Laundering, Terrorist Financing and Transfer of Funds 2019?

Answer 15

• 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

Question 16

What are the ‘red flags’ associated with money laundering?

Answer 16

• Unwillingness to provide identity documents
• Changes to parties involved in transactions
• Unusual transactions features (urgency etc)
• Unusual currency

Question 17

What is the Proceeds of Crime Act 2002?

Answer 17

Provides powers for enforcement authorities in the UK to recover assets which are deemed to be proceeds of crime

Creates three main areas of offence:

1. Concealment: if someone conceals or disguises criminal property
2. Arrangements: if someone enters into an arrangement which they know uses criminal property
3. Acquisition: if someone acquires criminal property

Question 18

What is the RICS guidance on bribery?

Answer 18

RICS Professional Statement - Countering bribery, corruption, money laundering and terrorist financing 2019

• Sets out mandatory requirements for RICS members and firms
• Mirrors statutory guidance

Question 19

What is the structure of the RICS guidance on Bribery?

Answer 19

1. Mandatory requirements
2. Guidance setting out best practice
3. Supplementary guidance on Parts 1 & 2
4. Glossary