The Late Payment Directive, 2011/7/EU is a Directive of the European Union concerning commercial

late payment A payment is the tender of something of value, such as money or its equivalent, 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 or philanthropy desire. Th ...

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 particular goals without dictating how the member states achieve those goals. A directive's goals have to be made the goals of one or more new or changed n ...

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 A member state is a state that is a member of an international organization or of a federation or confederation. Since the World Trade Organization (WTO) and the International Monetary Fund (IMF) include some members that are not sovereign 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 primary Executive (government), executive arm of the European Union (EU). It operates as a cabinet government, with a number of European Commissioner, members of the Commission (directorial system, informall ...

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, also 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 activ ...

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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References

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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 European Union financial market policy 2011 in law 2011 in the European Union

See also

References

External links