Bank of Russia's Risk Analysis Service issues more than 120 complaints to appraisers’ SROs in H1

Following review of independent appraisers’ reports for 2019 H1, the Bank of Russia’s Risk Analysis Service (RAS) has sent to self-regulatory organisations (SROs) as many as 122 complaints about appraisers, according to a review of the interaction between the RAS and appraisers’ SROs. Of this number, 105 were first-time complaints, 15 repeat complaints and two complaints were addressed to a SRO's governing board.

Following review of the complaints, SRO committees made in H1 24 decisions on disciplinary action against 23 appraisers; review of the 15 repeat complaints resulted in one disciplinary action (warning).

According to the review, these one-off disciplinary actions are still not working: they fail to ensure improvements in the quality of appraiser services. They included the instances of an SRO issuing a penalty (1%), suspending an appraiser’s licence (3%, all for a very short period of no longer than one month) or recommending that operations be suspended (1%). However, sanctioned appraisers continue their operations, providing services to BoR-supervised organisations, their customers and contractors.

Submitting a complaint to an SRO is a Bank of Russia tool to reduce its supervised organisations’ risks which relate to their use of appraiser’s reports in transactions with customers and contractors.

The Bank of Russia views the inappropriate response of SROs as a reason for further action to strengthen control over appraisers’ operations.