Professional Ethics, Conduct and Anti-Money Laundering Obligations
Ethical duties
A negotiator owes duties to the client, to the public, to fellow practitioners and to the Board. Core duties: act in the client's best interest, obey lawful instructions, disclose conflicts, keep information confidential, present all offers, avoid misrepresentation, keep monies separate, and never take secret commissions or referral fees from third parties. Where a conflict cannot be managed by disclosure and consent, decline the instruction.
Anti-money laundering
Estate agency is a gatekeeper profession under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001. Practitioners must carry out customer due diligence: identify the client and any beneficial owner, verify identity from reliable documents, screen politically exposed persons and apply enhanced due diligence to them, check sanctions lists, monitor the transaction on an ongoing basis, keep records for at least six years, and report suspicious transactions to the Financial Intelligence and Enforcement Department of Bank Negara Malaysia.
Red flags
Cash purchases, funds from an unrelated third party, a price far above or below market, urgency or unusual secrecy, insistence on paying deposits into a personal account, repeated last-minute changes of buyer, and payments structured to fall under reporting thresholds.
Traps
- Believing an in-house policy is enough; the statutory duty is on the firm and its officers.
- Failing to identify the beneficial owner behind a company buyer.
- Tipping off the client that a report has been made - that is itself an offence.
- Holding client money in a personal or operating account.
Rule of thumb
Know your client, know the source of the money, and record both. If the transaction would not survive a newspaper headline, escalate it.