RICS is consulting on a new standard designed to help property professionals and regulated firms address the risks posed by bribery and corruption, money laundering and terrorist financing.

Money laundering

The new draft standard, called the “Countering bribery and corruption, money laundering and terrorist financing” Professional Statement, sets out the obligations for RICS professionals and regulated firms to minimize their exposure to these risks and guard against these financial crimes in their day-to-day business operations.

Through an extensive global consultation, RICS aims to engage professionals and industry stakeholders on whether the proposed Professional Statement meets their needs and sets out their obligations to mitigate the impact of these risks on their business practices.

Property

The property sector is a well-known target for illegal financial activity because it is used as a vehicle to legitimise or “clean” the proceeds of illegally obtained funds, often in a single transaction.

This is supported by research conducted by the internationally recognised Financial Action Task Force (FATF), an organisation that works with governments to support legal and regulatory requirements to root out money laundering, terrorist financing and related threats within the global financial system.

Other international bodies such as the United Nations and Transparency International have also identified the property sector as particularly vulnerable to illicit funds.

Construction

The construction sector is also known for illegal financial activity especially through bribery and corruption during procurement and contractual processes. Research by global consulting firm, PwC, in its 2014 Global Economic Crime Survey, identified construction as one of a number of sectors particularly prone to incidents of bribery and corruption.

The Organisation for Economic Co-operation and Development (OECD) also identified construction as a high risk sector, globally, for bribery and corruption, often through state procurement processes.

The consultation

The Professional Statement aims to provide a clear description of how to manage the risks posed by bribery and corruption, money laundering and terrorist financing and is aligned to the RICS Rules of Conduct.

It sets out professional and ethical behaviour by providing practitioners and firms with clear and consistent principles on what constitutes a breach of conduct.

Once finalized, the Professional Statement will apply to all RICS professional disciplines and is global in scope.

The consultation runs from May to July and is available at www.rics.org/amlps.

Comments (4)

  1. The view from RICS

    The risks of bribery and corruption, money laundering and terrorist financing cut across our profession, regardless of geography or industry specialism. If these risks are not appropriately identified and managed, they could have a direct impact on day to day work, as well as on businesses and consumers, and the trust these groups place on professionals. By setting out the obligations of RICS professionals and regulated firms, the Professional Statement promotes transparent and ethical business behavior which promotes market confidence in the profession.

    Our focus on bribery and corruption, money laundering and terrorist financing is not new for RICS or for the profession in general. Governments legislate against these crimes, some organisations have strict policies that guard against them and most individuals understand the repercussions associated with them.

    As a global professional body, RICS has a responsibility to ensure that we set out the minimum requirements and obligations for our professionals and regulated firms to ensure their activities do not involve or facilitate bribery, corruption, money laundering or terrorist financing. It is therefore imperative that our practitioners, regulated firms, clients of surveying services and other stakeholders participate in the consultation and that our final standard reflects the reality of a modern profession and professional practice.

    Peter Bolton King FRICS

    Peter Bolton King FRICS, RICS Global Property Standards Director 15 May at 15:58PM

  1. http://www.abc.net.au/news/2018-05-14/court-document-shed-new-light-on-alleged-money-laundering-case/9738920

    This news article is a recent example in Australia. It is interesting the Regulator suggests that the Selling Agent should have been aware of the source of funds. To me this has an implication on the Fair Value definition as well - how hard do we look into a 'Normal Business Transaction'?

    Ian Humphries Ian Humphries, 17 May at 01:49AM

  2. The government at last is looking at regulation of estate agents and letting agents, should legislation be enacted-the 1989 act could be used then the process of minimum requirements to met professional standards could be simplified.
    All having to register for MLR and maintaining records and knowing the Risks-

    John Brown John Brown, Monday at 11:28AM

  3. I am concerned that a PS may put more onerous liability on a firm than the legislation itself. I agree RICS members should comply with legislation but it doesn't need to be any more onerous. We have surveyors spending 50% of their time on compliance with legislation including; EPCs, MEES, Asbestos Regs, AML, Bribery, VAT, Land Registry Issues etc

    Gordon Ellis Gordon Ellis, Monday at 15:08PM

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