March 2011 - The Bribery Act: actions for SMEs


Business Law Update
March 2011

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Gary CousinsWelcome to our March newsletter. Although the Bribery Act has been delayed our advice is that now would be a good time to look at the implications for your business and undertake a risk assessment. Find out more in our feature article. Changes from 1 April will mean that business owners and landlords with empty property will have to pay more in rates. Find out how to avoid these extra costs. There’s more in Blogs in Brief and the Useful Information sections.

We hope you will find information relevant to your business in this month’s issue. Email your article suggestions or legal questions to    

Gary Cousins
0121 778 3212

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The Bribery Act - actions for SMEs 

The Bribery Act 2010 became a statute last April. It had cross party support, and was intended to fulfil our treaty obligations. It was due to come into force this April, but is now being delayed.

So what is all the fuss about? And why should SMEs be concerned?

The Act creates two general offences, one of offering, promising, or giving a bribe, and the second of requesting, agreeing to or receiving a bribe. These are offences committed by individuals. There is also an offence of bribing a foreign official, and an offence by a commercial organisation, which includes partnerships, of failing to prevent bribery.

A company officer or senior manager could also be convicted for consenting to or conniving with another person in the commission of a bribery offence.

It’s serious!
For individuals the maximum sentence is 10 years imprisonment, for commercial organisations there are unlimited fines.

So what is a bribe?
Apart from the clear cut back-hander to win a contract, the so-called ‘bung’, it could also stretch to excessive gifts and entertainment designed to influence key players in the contract awarding process. In other words the bribe is intended to persuade or reward the other person in what would be an improper performance of their role.

For SMEs it means having clear guidance for employees on what they can offer to customers and prospective customers as well as what they are allowed to accept from suppliers. Is lunch from a supplier allowed, what about an all expenses paid trip to a ‘conference’ where conference time seems to be minimal?

Why should SMEs care?
And what should you be doing now? Firstly, it is unlikely that the Act itself will be abandoned. We have our treaty obligations to meet. Whilst the Guidance itself may receive a major overhaul from the published draft the draft does point the way forward and identify the sort of procedures which all organisations will have to put in place to prevent bribery.

Six general principles were outlined for commercial organisations to address:

  1. A risk assessment: based on the country concerned, the transaction, and any partnerships involved.
  2. Top level commitment: the organisation has to be lead from the top with a commitment to eradicate bribery and adopt the appropriate culture.
  3. Due diligence: a set of procedures to adopt for every transaction.
  4. Clear, practical and accessible policies and procedures.
  5. Effective implementation.
  6. Monitoring and review.

Of course, the burden will fall most heavily on large multi-national companies with complex and high value contracts involving many countries and agencies. But even small commercial organisations will need a written risk assessment and written policies and procedures in force to protect themselves in the event of bribery or acceptance of bribes by their employees or agents.

SMEs should now be carrying out their risk assessments and setting up their procedures so they are ready when the Act finally comes into force.

For more detailed advice on how the Bribery Act affects your business contact Nigel Musgrove on 01285 847001.   

Business advice

Empty property will cost you more from 1 April 2011 

The Government has announced that from 1 April 2011 the empty property business rates threshold will revert to £2,600 from the current level of £18,000.

This will be a matter of great concern for SMEs and commercial property owners who have any empty premises in their portfolio.

In addition the 50% relief has also been cut meaning that small firms will not be able to claim Small Business Rate Relief on empty property.

This will result in businesses with empty properties facing the prospect of having to pay thousands of pounds extra in business rates from April this year.

The Federation of Small Businesses has warned this will place a very significant burden on companies struggling in the current economic climate.

Conversely, it may mean landlords offer empty units on better terms in order to attract tenants (see how to save money on business premises).

Cousins Business Law is able to advise business owners and landlords, who have vacant property and cannot rent or sell it, on ways to avoid paying more in business rates. One option, for example, might be to let out the property on a casual basis for at least six weeks. If a property is occupied for a period of six weeks or more, then it can be empty again for the six month or three month period (depending on the type of property) before the owner or occupier is once again liable for the business rates.

It is important however to obtain advice on your own particular circumstances. If you are looking for ways to reduce your liability for business rates and would like to explore options available to you, please call Paul Harrison on 01604 456591 or send an email to with your contact details.

Blogs in brief 

Red tape strangling SMEs
The government is failing to untie the red tape that is strangling SMEs and the ‘One in One out’ approach promised doesn’t seem to be working... more

Leasing business premises explained – E is for entry
Almost all leases will contain a right for the landlord to enter the premises in certain circumstances. You don't want the landlord just barging in when he feels like it, though, so it's important … more

Sky and premier league hit by Karen Murphy goal
Karen Murphy, the landlady of a small pub in Portsmouth, yesterday scored a spectacular goal against the Premier League and Sky in the European Court of Justice… more

Useful Links

Protecting supply chain IP
The National Intellectual Property Crime Group has published an informative toolkit for SMEs aimed at raising awareness of counterfeit goods entering legitimate business supply chains. The toolkit has useful guidance on how to strengthen and protect IP assets and includes a step-by-step approach on action to take if counterfeits are found within the supply chain.

Report email scams
The National Fraud Authority is urging individuals and businesses to help them stamp out scam emails. The agency has launched a new operation to track down the fraudsters behind the multi-million pound industry in scam mail, but needs public input. They are asking people to forward any emails they receive to them via the Action Fraud website.

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Cousins Business Law is a member of the Law Society & regulated by the Solicitors Regulation Authority under number 485128. Head Office: Swan House PO Box 11543, Birmingham, B13 0ZL. Tel +44 (0)121 778 3212. Fax: +44(0)121 275 6155