Ethics, Rules of Conduct and Professionalism Part 2: Professional Practice Issues Flashcards
(42 cards)
Key Legislation for gifts and Bribery
The Bribery Act 2010
What is a bribe
The giving, offering, promising or receiving of an advantage such as a payment, gift or a service for an action which is illegal or a breach of trust
Bribery Act 2010 SIX principles
- Proportionality
- Top level commitment
- Risk assessment
- Due diligence
- Communication
- Monitory and review
Bribery Act 2010 FOUR offences
- Bribing
- Receiving a bribe
- Bribing a foreign public officinal; and
- Failing to prevent bribery
Company responsibility to combat bribery
Companies are responsible for their employee’s corrupt acts unless they can show they have adequate measures in place
Bribery Act 2010 view on hospitality
Hospitality is not prohibited; offering a client reasonable and proportional hospitality will not constitute an offence as long as it is arcuately recorded in the gift hospitality register
Examples of company steps to prevent bribery
- identification of potential risks
- staff training
- clear policies
- regular reviews
Who polices the Bribery Act
Serious Fraud Office
Penalties for breaching the Bribery Act
Max penalty of 10 years imprisonments and/or unlimited fine for individuals
Companies face an unlimited fine
CBRE Policy on gifts
No cash or equivalent, gifts up to £100, must be declared.
When accepting a gift consider
- Consider the Bribery Act 2010.
- CBRE Procedures (up to £100, must be declared).
- Professional objectivity.
- Tax implications and sanctions.
- Contract details and proportionality.
What is money laundering
when proceeds of criminal activities are disguised or converted and then realised as legitimate assets
Regulation for Money Laundering
Terrorist Financing and Transfer of Funds Regulations, 2017
Why were the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 amended in 2023
To clarify the differences between domestic and non-domestic politically exposed persons (PEPs) and establish that domestic PEPs pose a lower risk of money laundering and terrorist financing.
Key requirements of Terrorist Financing and Transfer of Funds Regulations 2017
- Written money laundering/ terrorist financing risk assessment
- Systems/procedures to address risk
- Appropriate internal controls
- Staff training
- Customer due diligence requirements
- Politically exposed person requirements
- Appropriate record keeping/ policies
- AML check
- Include additional high risk factors when additional DD may be required
Purpose of AML check
To confirm the identity of the proposed purchaser of a property and check the purchasers source of funds by the vendor’s agent before contracts are exchanged
Estate Agents Legal Obligations regarding money laundering
- Register with HMRC if they let properties over €10,000 pcm.
- Businesses need to be approved/ registered to HMRC to trade
- Customer DD checks on vendors, purchasers, landlords, tenants
- Enhanced DD checks if red flags occur
Example red flags for Enhanced DD checks
- Involving high risk countries
- non face to face business relationship
- Complex/ unusually large
- Unusual patterns of transactions
- No apparent economic or legal purpose
Two levels of DD checks
Customer DD
Enhanced DD
Customer DD checks
- Identify client + beneficial owners, verify based on reliable independent source / persons of significant control register
- For company - company number + address of registered office
- Directors names unless listed
- Purpose of the business relationship and funding arrangements.
Enhanced DD checks
Require additional evidence and monitoring, for any transaction/ business relationship involving a high risk country or PEP/ PEP family
What is a PEP - Politically exposed person
Someone who has been entrusted with a prominent public function; represent higher risk for bribery/corruption due to influence
Additional key requirements of AML regulations
- Cash limit of €10,000
- Business relationship monitored
- Detailed record kept
- ML Reporting Officer appointed
- Maintain records for 5 years
- Report discrepancies between information firm holds and info on Companies House Register
- Senior member of staff appointed - responsible for all compliance
Penalties for non compliance with AML regulations
- Maximum - 14 years and/or unlimited fine for assisting with ML.
- Maximum - 5 years and/or unlimited fine for tipping off a person they are under suspicion/ failing to report suspicion
