FIEC
Advanced search
Back to list

Late Payment

Date 28/05/2013

The European Commission has launched an information campaign to fight against late payment in the EU.

Late payment - in particular from public authorities - is a major problem for construction companies and has led to a high number of bankruptcies all over the EU. This problem has increased tremendously since the beginning of the crisis in 2008.

As Member States are supposed to have transposed into their national law, by 16th March 2013, the revised Late Payments Directive (2011/7/EU), the European Commission takes this opportunity to recall the importance of the issue and better inform Member States about the changes which this revised Directive has introduced.

Basically:

-       Public authorities must pay within 30 calendar days, or in specific circumstances, within 60 calendar days.

-       In B2B, the contractual freedom is respected, with a capping up to 60 calendar days.

-       Enterprises are automatically entitled to claim interest for late payment (at least 8% above ECB’s reference rate) and can also automatically obtain a minimum fixed amount of €40 as a compensation for payment recovery costs.

However, FIEC claims that a major loophole of this new Directive lies in the fact that verification and acceptance periods – of 30 calendar days maximum – come in addition to the strict payment period, which extends the overall payment period!

Moreover, in practice, companies are reluctant to use legal instruments to obtain their money, as they fear being excluded from future business opportunities... This is expected to remain the main barrier to fighting against late payment.

In any case, FIEC Member Federations encourage their respective national authorities to maintain or bring into force laws which are more favourable to implement the directive in order to shorter payment period and to avoid any increase of existing payment period.

 

More information about the European Commission’s campaign: http://ec.europa.eu/enterprise/newsroom/cf/itemdetail.cfm?item_id=6504&lang=en&tpa_id=0&title=SMEs%3A-Damaging-late-payment-culture-due-to-end-on-16-March

Copyright © 2012 FIEC. All rights reserved.