New RICS standard sets out key professional obligations to mitigate risks of financial crimes
RICS is consulting on new standards designed to help property professionals and regulated firms address the risks posed by bribery and corruption, money laundering and terrorist financing.
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.
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.
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 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.
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