RICS is taking a lead in developing and embedding international standards which are recognised throughout the world.
20 JUN 2018
The view from the Middle East outlines how RICS' public consultation will boost the profession while minimising exposure to financial crime.
RICS has issued for consultation, a new standard that sets out obligations for RICS professionals and regulated firms to minimise their exposure to risks posed by bribery, corruption, money laundering and terrorist financing. This is to guard against these financial crimes in their day-to-day business operations.
Through an extensive global consultation of the ‘Countering bribery and corruption, money laundering and terrorist financing’ Professional Statement, RICS aims to engage professionals and industry stakeholders on their obligations to help mitigate the impact of these risks on their day-to-day business practices
As part of the consultation, we recently held a roundtable discussion in Dubai aimed at engaging leading industry stakeholders to consider the implications that risks like corruption and bribery, money laundering and terrorist financing can have on their businesses and on the sector more broadly. This event was attended by a range of industry representatives including EY, CBRE, Knight Frank and a number of practitioners from across the sector.
Stephen Flanagan, Head of Valuation and Advisory at Knight Frank’s operation in MENA put these risks into context, especially as the Middle East becomes more attractive for real estate investors.
"Given the growing worldwide demand for real estate projects and the economic value generated by such projects, the engagement of the key stakeholders such as engineering, construction and real estate industries in the fight against corruption is clearly of the highest importance. In an emerging, maturing market such as the Middle East, the importance of strong standards on countering bribery, corruption, money laundering and terrorist financing are paramount for the reputation of the market."
A key issue raised by a number of participants was the lack of clear legal bodies in place for firms to report suspected money laundering activities to. Even though laws exists to prevent financial crimes, participants shared their sentiments on the difficulties for individuals to report illegal activities to relevant bodies or not having company policies in place to mitigate these risks. This was also highlighted in the above mentioned EY report: 35% of the respondents surveyed in the Middle East said their companies had no policy in place for reporting bribery or other forms of corruption.
Another concern raised during discussions was that of gifts: understanding what is considered bribery and what is considered a cultural keepsake. Ramadan gifts, as pointed out at the discussion, are very common in the region, and they could be anything from a box of chocolates to an expensive pen. Not accepting them is considered an insult to the giver. While definitions and practises regarding gifts may differ from country to country, Noura Yassin supported the RICS approach to of setting out a global framework to counter these risks.
"The RICS takes anti-bribery corruption and anti-money laundering very seriously. It continues to provide information and has also created a framework that all members in different countries need to follow. In addition, by involving industry stakeholders, RICS has sent a clear message by emphasizing the importance of these risks and through such roundtables and interactions with stakeholders, it continues to refine these frameworks and ensure they are effective and serve the purpose."
By providing practitioners and companies with clear and consistent principles on what constitutes a breach of conduct, the new professional statement promotes professional and ethical behaviour.
Once the Professional Statement has been finalised, it will apply to all RICS professional disciplines globally. Responses are welcome from anyone interested in preventing bribery, corruption, money laundering and terrorist financing, particularly from small and large firms, consumer groups, property professionals, regulators, governments and international agencies.