Ethics, Rules Of Conduct And Professionalism - Summary Of Experience Flashcards
What CPD Training did you undertake on Anti-Money Laundering?
I undertook an assessment every year on updates on Anti-Money Laundering learning about new RICS requirements on AML checks needed to be undertaken by firms on their clients.
What are the requirements set out in the RICS Professional Statement - Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019) (Effective September 2019)
- Have a written money laundering and terrorist financing risk assessment
- Implement systems and controls to address money laundering and terrorist financing risks
- Provide staff training
- AML checks on any clients, especially proposed purchaser of properties and their sources of funds
- Comply with regulation on PEPs.
Set out in three parts. 1. Mandatory requirements. 2. guidance setting out good practice. 3. Supplementary guidance.
What did the RICS Publish on Conflicts Of Interest?
The RICS published a global professional statement: “Conflicts of Interest (2017)” (effective from 1 January 2018)
Where might a conflict of interest arise?
Examples of a conflict of Interest may include, a financial interest, a personal interest, commercial relationships, or acting on both sides of a transaction.
In what circumstances might a conflict of interest not cause you to decline an instruction?
If you identify a conflict, but believe that despite the conflict it is in the best interests of all those involved for you to proceed with the instruction and you have the informed consent of your client, then you may proceed despite the conflict.
According to RICS Global Professional Statement on Conflicts of Interest, 2017, what three types of conflict might arise?
- Party Conflict – same instruction for multiple clients
- Own Interest Conflict – personal interest
- Confidential Information Conflict – work between two parties that is confidential.
If a conflict arises, what are the steps that must be taken ?
Step One – Conflict Avoidance
- Is the conflict irresolvable as impartiality is compromised, or can it be managed with transparency and openness.
Step Two – Written Advice to both parties
- Notice to both parties must occur outlining
- Disclose nature of conflict, circumstances and proposal to deal with conflict
- Be clear and ensure each party can make their own decision
- Require confirmation of each firm’s informed consent that you can proceed.
Step Three - Conflict Management
- Set up an information barrier in accordance with the provisions agreed with both clients.
How did you carry out a conflict of interest check?
I wrote to the entire company requesting if anyone had any conflict of interest with this potential client.
Further to this, I wrote to my managing director separately asking whether this client would have any conflicts with over clients.
How might a conflict of interest be managed, should you receive written consent and proceed with an instruction?
If you receive written consent from all parties involved to proceed with the instruction despite the identified conflict, information barriers should be put in place, including keeping all related information securely, ensuring physical separation of the two professionals involved, and keep adequate audit trail of the acceptance written consent.
What steps should be undertaken during DD checks for a client?
- Customer Due Diligence - identify client and their identity from an independent source (passport) and identify any beneficial owners of the client. For companies this includes company number, address and names of directors.
- Enhanced Due Diligence - for a person from a ‘high risk third country’ or ‘PEP’
What are the penalties for assisting with Money Laundering under Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) 2017? (Amended in 2023)
- Failure to comply with regulations.
- 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 by informing them they are under suspicion for money laundering.
What is a PEP, and what are you required to carry out when working with one?
A politically exposed person. You are required to undertake further checks or “Enhanced Due Diligence” EDD when working with one. They present a higher risk of being involved in bribery or corruption due to the nature of their position.
What are a few of the potential red flags?
Inability to provide identity documents, changes to party during the transaction, unusual transaction features such as unexpected urgency, payment of fees in unusual currencies.
What are the THREE steps to follow in relation to Terms of Engagement?
- Check professionally competent.
- No conflicts of interest or personal interest.
- Confirm terms of engagement in writing and get written approval from the client BEFORE you start work on the instruction (CIT)
What must Terms Of Engagement state?
The clients agreement in writing to the proposed fee, payment of expenses (and how they’re calculated) and that a copy of the firm’s complaints handling procedure is available upon request.
