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Combatting illegal financial activity

Combatting illegal financial activity

Research by the International Monetary Fund estimated that the amount of money laundered, globally, in one year could be between 2 and 5% of global Gross Domestic Product, which is equivalent to US$800 billion to US $2 trillion.

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 illegal obtained funds. It provides the opportunity to legitimise, or launder, large amounts of "dirty money" in a single transaction. This is supported by research conducted by the FATF in a 2007 report.

The construction sector is also known for illegal financial activity. PwC’s 2014 'Global Economic Crime Survey' identified the engineering and construction sectors as having the highest rate of bribery and corruption of any industry. The Organisation for Economic Co-operation and Development also identified construction as a key sector, globally, for bribery and corruption, often through state procurement processes.

What RICS is doing about it

We have proposed a professional statement on 'Countering bribery and corruption, money laundering and terrorist financing', which sets out the obligations for RICS professionals and firms when exposed to situations where these illegal financial activities may occur. This professional statement applies to all professional disciplines globally.

The professional statement will provide the profession with a clear description of how to manage these risks within the RICS Rules of conduct. It sets out professional and ethical behaviour by providing practitioners and firms with clear and consistent principles, informing them about what constitutes as a breach of conduct.

RICS has undertaken recent regulatory action in this area, including expelling a member for being involved in money laundering, and issuing a six figure fine for a firm involved bribery and corruption.

Take part in the public consultation

The professional statement 'Countering bribery and corruption, money laundering and terrorist financing' will apply to all RICS professional disciplines and is global in scope.

We are particularly interested in hearing responses from small and large consumers, professionals, regulators, and government departments or agencies.

Our public consultation, which will inform the professional statement, is open until Tuesday 31 July 2018.

Take part in the consultation

Help us create a global report

We want your help to create a global report that will be published alongside the professional statement. This report will explore the financial risk associated with bribery, corruption, money laundering and terrorist financing.

We can only do this with your insight and we would appreciate 10 minutes of your time to answer some questions regarding your experience dealing with these illegal financial activities.

Bribery, corruption, money laundering and terrorist financing: A global report

Should all firms be required to have mandatory training or is it correct to mandate a risk assessment?

Is document retention, particularly post-General Data Protection Regulation (GDPR), impacting your ability to implement client-identification procedures?