Proposal for a European Parliament and Council Directive combating late payment in commercial transactions (98/C 168/09) (Text with EEA relevance) COM(1998) 126 final - 98/0099(COD)

(Submitted by the Commission on 23 April 1998)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 100a thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the Economic and Social Committee,

Acting in accordance with the procedure laid down in Article 189b of the Treaty,

(1) Whereas the European Parliament in its Resolution (1) on the Integrated Programme in favour of SMEs and the craft sector (2) emphasised that the Commission should forward proposals to deal with the problem of late payment;

(2) Whereas on 12 May 1995 the Commission adopted a Recommendation on payment periods in commercial transactions (3);

(3) Whereas the European Parliament in its Resolution on the Commission Recommendation on payment periods in commercial transactions (4) called on the Commission to consider transforming its recommendation into a proposal for a Council Directive to be submitted as soon as possible;

(4) Whereas on 29 May 1997 the Economic and Social Committee adopted an opinion on the Commission's Green Paper on public procurement in the European Union: Exploring the Way Forward (5), recommending maximum payment periods and interest on late payments by public authorities;

(5) Whereas on 4 June 1997 the Commission published an Action Plan for the Single Market (6), which underlined that late payment represents an increasingly serious obstacle for the success of the Single Market;

(6) Whereas on 17 July 1997 the Commission published a Report on late payments in commercial transactions (7), summarising the results of an evaluation of the effects of the Commission's Recommendation of 12 May 1995;

(7) Whereas heavy administrative and financial burdens are placed on businesses, particularly small and medium-sized ones, as a result of late payment; whereas moreover, late payments are a major cause of insolvencies threatening the survival of businesses and result in numerous job losses;

(8) Whereas the differences between the payment rules and practices in the Member States constitute an obstacle to the proper functioning of the internal market; whereas a creditor who needs to collect receivables from debtors situated in several Member States is confronted with widely differing rules of national legislation making it difficult, time consuming and costly for him to do so;

(9) Whereas this has the effect of considerably limiting commercial transactions between Member States; whereas this is in contradiction with Article 7a of the Treaty as entrepreneurs should be able to trade throughout the Internal Market under conditions which ensure that transborder operations do not entail greater risks than domestic sales; whereas it would lead to distortions of competition if different rules applied to domestic and transborder operations;

(10) Whereas the most recent statistics indicate that there has been, at best, no improvement in late payments in many Member States since the adoption of the Recommendation of 12 May 1995;

(11) Whereas, in accordance with the principle of subsidiarity and the principle of proportionality as set out in Article 3b of the Treaty, the objective of combating late payments in the internal market cannot be sufficiently achieved by the Member States acting individually and can, therefore, be better achieved by the Community; whereas this Directive confines itself to the minimum required in order to achieve those objectives and does not go beyond what is necessary for that purpose;

(12) Whereas late payment constitutes a breach of contract which has been made financially attractive to debtors in most Member States by low interest rates on late payments and/or slow redress procedures; whereas a decisive shift is necessary to reverse this trend and the consequences of late payments must be such as both to discourage late payment and to fully compensate creditors for the costs incurred;

(13) Whereas the use of retention of title clauses as a means of speeding up payment is at present constrained by a number of differences in national law; whereas it is necessary to ensure that creditors are in a position to exercise the retention of title throughout the Community, using a single clause recognised by all Member States;

(14) Whereas the consequences of late payment can be dissuasive only if they are accompanied by redress procedures which are rapid, effective and inexpensive for the creditor; whereas in conformity with the principle of non-discrimination contained in Article 6 of the Treaty, these procedures should be available to creditors from all Member States irrespective of their residence;

(15) Whereas public authorities handle a considerable volume of payments to businesses; whereas strict payment discipline on the part of these authorities would have a beneficial trickle-down effect on the economy as a whole; whereas for payments executed by the Commission it has already been decided to give certain creditors the right to receive default interest on late payments;

(16) Whereas for the purposes of the implementation of this Directive, the Commission should be assisted by a committee of an advisory nature,

HAVE ADOPTED THIS DIRECTIVE:

CHAPTER I

Article 1

Scope

The provisions of this Directive shall apply to all payments made in commercial transactions.

Article 2

Definitions

For the purposes of this Directive:

1. 'commercial transactions` means transactions between two or more natural or legal persons carrying on a trade or profession acting in the course of their business, or between such persons and public authorities, which lead to delivery of goods or provision of services for remuneration;

2. 'late payment` means failure to observe the contractual or statutory terms of payment;

3. 'retention of title` means retention by the seller of title to the goods in question until the buyer has paid the price in full;

4. 'public authorities` means the State, regional or local authorities, bodies governed by public law, or associations formed by one or more of such authorities or bodies governed by public law. A body is considered to be governed by public law where it is established for the specific purpose of meeting needs in the general interest, not being of an industrial or commercial nature, has legal personality, and is financed for the most part by the State, or regional or local authorities, or other bodies governed by public law, or is subject to management supervision by those bodies, or has an administrative, managerial or supervisory board more than half of whose members are appointed by the State, regional or local authorities, or other bodies governed by public law;

5. 'public procurement contracts` means contracts for pecuniary interest concluded in writing between a natural or legal person and public authorities.

CHAPTER II

Article 3

Due date, interest and compensation for the damage incurred

1. Member States shall ensure that:

(a) the due date for the payment of debts shall not be more than 21 calendar days from the date of the invoice, unless otherwise specified in the contract or in the seller's general conditions of sale;

(b) in the absence of an invoice or if the date of the invoice cannot be determined with certainty or if the date of the invoice is earlier than the date of delivery, the due date shall be calculated from the date of delivery of the goods or services;

(c) the creditor shall be entitled to claim interest from the debtor on any outstanding amount when the due date as determined under points (a) and (b) has been exceeded without the creditor having received the amount due;

(d) interest shall accrue automatically from the day after the due date without the necessity of a reminder;

(e) the level of interest for late payment (the 'statutory rate`), which the creditor is entitled to claim, shall be the sum of the tender (repo) interest rate of the European Central Bank (the 'reference rate`) plus at least 8 percentage points (the 'margin`), unless otherwise specified in the contract or in the seller's general conditions of sale; for Member States which do not participate in the third phase of Economic and Monetary Union, the reference rates referred to above shall be the equivalent rates set by their central banks;

(f) the statutory rate for interest on late payment shall change automatically in accordance with changes to the reference rate mentioned in point (e);

(g) in addition to the right to interest, the creditor shall be entitled to claim full compensation from the debtor for the damage incurred.

2. The margin referred to in paragraph 1(e) may be modified by the Commission in accordance with the procedure referred to in Article 9 if it becomes apparent that the statutory rate is no longer sufficiently high to discourage the buyer from paying late and to compensate the seller for any loss incurred as a result of late payment, in particular for any interest he would have to pay on overdraft credit.

Article 4

Retention of title

1. Member States shall ensure that the seller retains title if he notifies the buyer of his intention of doing so in writing no later than the date of delivery of the goods.

Once the due date has passed without the buyer having paid, the seller may claim that the goods in question be returned to him. As soon as the buyer takes possession of the goods, he becomes responsible for any damage to or loss of the goods. A valid notification may be made in the seller's standard contract, on the invoice, or in an individual contract.

Member States shall recognise the validity of the clauses contained in the Annex or of clauses having equivalent effect.

2. Paragraph 1 shall apply only to debts payable in a single instalment.

3. Member States shall define the effect of the retention of title clause as regards those aspects not covered by this Directive and in particular as regards the effect on third parties acting in good faith.

Article 5

Accelerated recovery procedures for undisputed debts

1. Member States shall ensure that there is an accelerated debt recovery procedure for undisputed debts.

2. This procedure shall apply irrespective of the amount of the debt.

3. This procedure shall be available to creditors from all Member States, irrespective of their place of residence.

4. The creditor shall be able to choose whether or not he wishes to be represented by a third person.

5. The procedure before the court shall be formulated in such a way that a period of 60 calendar days is not exceeded from the receipt of the creditor's request to the time when the writ of execution or equivalent document becomes enforceable.

This period is without prejudice to:

(a) the application of the rules governing notification or service and

(b) the rights of the defendant to dispute the debt.

Article 6

Simplified legal procedures for small debts

Member States shall ensure that simplified procedures are available for debts up to a threshold, which shall not be less than ECU 20 000. These procedures shall provide for simple, low-cost methods for taking legal action for the settlement of debts.

This sum can if necessary be modified by the Commission to reflect changing economic conditions in accordance with the procedure referred to in Article 9.

These procedures shall be available to creditors from all Member States irrespective of their place of residence.

CHAPTER III

Article 7

Transparency in public procurement contracts

Member States shall ensure that public procurement contracts contain precise details of the payment periods and deadlines applied by the public authorities. In particular, time limits shall be fixed for the completion of pre-payment administrative formalities, such as public works reception procedures.

Article 8

Prompt payment, due date and automatic interest

Member States shall ensure that:

1. the due date for the payment of contractual debts by the public authorities as determined under Article 3(1)(a) and (b) does not exceed 60 calendar days; the contract shall in no circumstances override that maximum payment period;

2. a creditor shall be entitled to interest from the public authority on any outstanding amount when the due date has been exceeded; the interest shall be calculated as set out in Article 3(1)(d) and (e), and shall be paid automatically by the public authority without the necessity of a claim;

3. the public authority is not permitted to request or require that the creditor waives any of the rights referred to in this Article.

CHAPTER IV

Article 9

Committee

For the purposes of reviewing the functioning of this Directive and in particular for the cases mentioned in Article 3(2) and Article 6, the Commission shall be assisted by a committee of an advisory nature composed of the representatives of the Member States and chaired by the representative of the Commission.

The representative of the Commission shall submit to the committee a draft of the measures to be taken. The committee shall deliver its opinion on the draft, within a time limit which the chairman may lay down according to the urgency of the matter, if necessary by taking a vote.

The opinion shall be recorded in the minutes; in addition, each Member State shall have the right to ask to have its position recorded in the minutes.

The Commission shall take the utmost account of the opinion delivered by the committee. It shall inform the committee of the manner in which its opinion has been taken into account.

Article 10

Transposition

1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 31 December 2000 at the latest. They shall forthwith inform the Commission thereof.

When Member States adopt these provisions, these shall contain a reference to this Directive or shall be accompanied by such reference at the time of their official publication. The procedure for such reference shall be adopted by Member States.

2. Member States may maintain or bring into force provisions which are stricter than the provisions necessary to comply with this Directive.

3. Member States shall communicate to the Commission the text of the mains laws, regulations or administrative provisions which they adopt in the field covered by this Directive.

Article 11

Entry into force

This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Communities.

Article 12

Addressees

This Directive is addressed to the Member States.

(1) OJ C 323, 21.11.1994, p. 19.

(2) COM(94) 207 final, 3.6.1994.

(3) OJ L 127, 10.6.1995, p. 19.

(4) OJ C 211, 22.7.1996, p. 43.

(5) OJ C 287, 22.9.1997, p. 92.

(6) SEC(97) 1 final, 4.6.1997, pp. 8 and 38.

(7) OJ C 216, 17.7.1997, p. 10.

ANNEX

List of clauses to be recognised by Member States for the purposes of Article 4

ES: «El vendedor conservará la propiedad de los bienes hasta el pago.»

DA: »Varen forbliver sælgerens ejendom, indtil den er betalt.«

DE: "Die Ware verbleibt bis zur Bezahlung im Eigentum des Verkäufers."

EL: «Ï ðùëçôÞò ðáñáêñáôåß ôçí êõñéüôçôá ôùí áãáèþí ìÝ÷ñé íá åîïöëçèåß ôï ôßìçìÜ ôïõò.»

EN: 'The goods remain the property of the seller until payment.`

FR: «Les marchandises restent la propriété du vendeur jusqu'au paiement.»

IT: «Le merci restano di proprietà del venditore fino al pagamento.»

NL: "De waren blijven tot de betaling eigendom van de verkoper."

PT: «O vendedor conservará a propriedade dos bens até ao momento do pagamento.»

FI: "Tavara on myyjän omaisuutta, kunnes kauppahinta on maksettu."

SV: "Varorna förblir säljarens egendom tills de betalats."