8 April 2013

ECMA Late Payment Terms - Directive 2011/7/EU

The new EU Directive 2011/7/EU has been adopted to combat late payment. This Directive had to be transposed by the EU Member States into national law by 16 March 2013.

The provisions of the new Directive include, in short:

• Harmonisation of period for payment by public authorities to businesses: Public authorities will have to pay for the goods and services that they procure within 30 days
• Contractual freedom in businesses commercial transactions: Enterprises will have to pay their invoices within 60 days.
• Enterprises will automatically be entitled to claim interest for late payment and will also be able to obtain a minimum fixed amount of € 40 as a compensation for recovery costs. They can claim compensation for all remaining reasonable recovery costs.
• The statutory interest rate for late payment will be increased to at least 8 percentage points above the European Central Bank’s reference.

 
What does the new Directive do for businesses?
It is designed to combat late payment in commercial transactions to ensure the proper functioning of the internal market by:

• Harmonising and limiting payment terms
• Entitling suppliers to claim compensation and
• interest in the event of late payment