24 JUN 2018
Though governments around the world are doing more to combat corruption and money laundering, a cursory glance at news feeds over the past few months, reveals stories that illustrate the threat that money laundering, bribery and corruption still pose, and why there is a collective necessity to tackle them, particularly in the built environment.
The RICS have opened a public consultation on a new professional statement to sit alongside national legislation, and which will be mandatory for all RICS professionals, regardless of discipline, to help property professionals and regulated firms address these risks. Countering Bribery and Corruption, Money Laundering and Terrorist Financing will work alongside and enhance RICS’ pre-existing obligations for RICS professionals, which can be found in the Rules of Conduct for Members.
Research by the International Monetary Fund estimates that the amount of money laundered, globally, in one year, could be between 2-5% of global GDP, equivalent to US$800 billion to US$2 trillion.
This figure is in-line with research conducted by the United Nations Office on Drugs and Crime and the Financial Action Task Force. Because illegally obtained funds, by its very nature are hard to track, it is difficult to accurately quantify the costs to economies, businesses or the impact on the consumer.
The built environment sector is particularly vulnerable to these issues; to tackle it, organisations must act collaboratively to stem the problem. Just considering Southeast Asia, we have seen scandals around the 1MDB investment fund, the Great Garuda seawall project, the unreported use of illicit funds to attempt a real estate purchase in Sentosa Cove; as well as various construction projects mired by allegations of bribery and corruption within the procurement process, highlighting the need for quick and effective action.
It is imperative that we do all we can to mitigate the risks of bribery and corruption, money laundering and terrorist financing. Despite the existence of anti-money laundering legislation in many markets, the built environment sector needs the support of an actively regulated, specific process to prevent illegal activity, and enhance public trust in the profession.
The professional statement, Countering Bribery and Corruption, Money Laundering and Terrorist Financing, will apply to all RICS professional disciplines and is global in scope. Responses are accepted until 31 July.