Brussels, 20/10/2010 (Agence Europe) - On Wednesday 20 October, the European Parliament gave its blessing to the new directive on combating late payments in commercial transactions (EUROPE 10232). The EP adopted, by a very large majority (612 votes in favour, 12 against and 21 abstentions), the report by Barbara Weiler (S&D, Germany), which confirms the agreement concluded with the Council.
The directive will provide better protection for creditors, most of them SMEs, whilst respecting contractual freedom. The public authorities must settle their invoices within 30 days, or they will be liable for interest of 8% for late payment. This measure is expected to generate an extra €180 billion for businesses, the European Commission estimates.
Amongst other things, the new provisions of the directive provide for: - harmonisation of the time period for payments by the public authorities to businesses: the public authorities will have 30 days to settle invoices for the purchase of goods and services, or 60 days under exceptional circumstances (the member states may, for example, choose a period of 60 days for public hospitals or nurseries); - liberty for commercial operations between businesses: businesses must settle their invoices within 60 days, unless they agree otherwise and if the other terms agreed upon are not manifestly abusive; - businesses to have an automatic right to demand the payment of interest on late payments and also to charge a flat rate of a minimum of €40 to cover the costs of recovery. They may also request compensation for all other reasonable costs of recovery; - the legal interest rate for late payments will be brought to at least eight percentage points above the reference rate of the European Central Bank (ECB). The public authorities will not be able to set a lower interest rate for late payments; - it to be easier for businesses to mount legal challenges against manifestly abusive terms and conditions and practices; - increased transparency and awareness: the member states must publish the interest rates for late payment so that businesses can easily become aware of them; - the member states to be encouraged to draft codes on respecting payment times; - the member states to be able to maintain or implement legislation and rules which are more in favour of creditors van are the provisions of the directive.
The Council has still to adopt this directive formally. It must be transposed into the internal laws of the member states within 24 months of the date of its definitive adoption. (L.C./transl.fl)