The Late Payment Directive, 2011/7/EU is a
Directive of the European Union concerning commercial late
payment
A payment is the voluntary tender of money or its equivalent or of things of value by one party (such as a person or company) to another in exchange for goods, or services provided by them, or to fulfill a legal obligation. The party making the ...
s. It replaced the previous Late Payment Directive 2000/35/EC.
Like all
European Union directive
A directive is a legal act of the European Union that requires member states to achieve a particular result without dictating the means of achieving that result. Directives first have to be enacted into national law by member states before thei ...
s, this is an instrument which requires member states to enact its provisions in national legislation by 16 March 2013. The directive applies to all
member states.
The directive aims to achieve 'a decisive shift to a culture of
prompt payment Prompt payment is a commercial discipline which requires businesses to:
* agree fair and reasonable payment terms with their suppliers
* ensure suppliers' invoices are approved and paid within agreed terms
* encourage adoption of the same practices ...
' and requires debtors to pay interest and the reasonable recovery costs of the creditor if they do not pay for goods or services on time. The limits are within 60 days for businesses and within 30 days for public authorities.
In Ireland, the Directive has been implemented through the European Communities (Late Payment in Commercial Transactions) Regulations 2012. In the United Kingdom, the Directive was implemented through the Late Payment of Commercial Debts Regulations 2013 (SI 395/2013).
In 2016, the
European Commission
The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body ...
reported concerns that in commercial relations, businesses, especially small and medium-sized enterprises (SMEs), are reluctant to:
(a) Dispute the terms of a contract (ex. payment term, rate of interest for late payment etc.)
(b) Chase the payment of their unpaid invoices
(c) Claim interest for late payment and compensation for recovery costs
(d) Refer the buyer to court for non-respect of the agreed contractual terms.
In an
invitation to tender
An invitation to tender (ITT, otherwise known as a call for bids or a request for tenders) is a formal, structured procedure for generating competing offers from different potential suppliers or contractors looking to obtain an award of business ...
issued on 19 July 2016, the Commission has indicated its intention to undertake "an in-depth assessment of measures, both regulatory and voluntary, that have been put in place in the Member States to address the problem of late payment in commercial relations between undertakings".
[European Commission]
Call for Tender 558/PP/GRO/SME/16/C/011B: Business-to-business transactions: a comparative analysis of legal measures vs soft-law instruments for improving payment behaviour issued 17 July 2016, accessed 8 August 2016
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See also
* Payment Services Directive
The Revised Payment Services Directive (PSD2, Directive (EU) 2015/2366, which replaced the Payment Services Directive (PSD), Directive 2007/64/EC) is an EU Directive, administered by the European Commission (Directorate General Internal Market) t ...
* Late Payment of Commercial Debts (Interest) Act 1998
* Antonio Tajani#Late Payments Directive
References
{{reflist
External links
;Documents from the European Council, Commission, and Parliament
2011/7/EU
;With regard to the United Kingdom
Late Payment Directive: User Guide to the Recast Directive
A Users Guide to the recast Late Payment Directive
European Union directives
2011 in law
2011 in the European Union