WRITTEN QUESTION E-2837/02

by Jorge Hernández Mollar (PPE-DE) to the Commission

(9 October 2002)

Subject: Implementation of Directive 2000/35/EC

In business circles the EU Directive 2000/35/EC(1) of June 2000 has been criticised as lukewarm and insufficient. It does, however, represent a step forward for the construction industry, even though European Parliament recommendations are further-reaching and despite the fact that the issue of payment delays is not explicitly addressed.

It would be logical for subcontractors in the construction industry to demand payment 30 days after the completion of an order, in view of the fact that, in general, there is still an 180-day period between the date of completion of an order and the date of payment.

To what degree has the Directive been transposed into national legislation of EU countries since June 2000, and what action might be taken in response to the subcontractors' repeated call for the inclusion of rules on fixed payment schedules?

(1) OJ L 200, 8.8.2000, p. 35.

Answer given by Mr Liikanen on behalf of the Commission

(4 November 2002)

Enterprises lacking the market power to negotiate short deadlines for payment may challenge standard purchasing terms before a court or competent administrative body.

Article 3.3 of Directive 2000/35/EC(1) provides that contractual terms that have the effect of exceeding the 30 days period for payment specified in the Directive may be unenforceable, or give rise to a claim for damages, if they are judged to be grossly unfair.

Member States are obliged to ensure that adequate and effective means exist to prevent the continued use of such terms, to ensure swift procedures for recovery of unchallenged claims within 90 calendar days and to provide mechanisms whereby organisations representing smaller enterprises may take legal action.

According to Article 3 paragraphs 3, 4 and 5, an industry association can sue in the name of some of their members. One of the elements to consider in this context would be the question of whether the main contractor benefits from relatively short payment periods, but pays his subcontractors according to much longer payment periods. This case has been foreseen by the above-mentioned Directive, where it is mentioned in Recital 19 and is addressed under Article 3, paragraphs 3 to 5.

Furthermore, a Member State is free to use Article 3(2) in order to limit the maximum payment period in a given sector such as the construction industry, to a maximum of 60 days, provided it:

- either declares at the same time that payment periods exceeding 60 days are void;

- or fixes a mandatory interest rate that substantially exceeds the statutory rate, for instance 20 % per annum.

Under Article 6, paragraph. 2, a Member State can combine these two measures, that is to say it can fix the deadline and a high interest rate.

Since the deadline for transposition of Directive 2000/35/EC into national law on 2 August 2002, more than half the Member States have notified the Commission of their transposing laws. As of 1 October 2002, notification has not yet been received from Greece, Spain, Italy, Luxembourg, the Netherlands, Austria or Portugal. Up to date information concerning transpositions is posted on the Commission's website http://europa.eu.int/comm/enterprise/regulation/late_payments/index.htm.

The Commission has also recently received a formal complaint concerning non-transposition by the Spanish Government.

As one of its obligations under Directive 2000/35/EC, the Commission has undertaken to review a number of aspects two years after the transposition deadline. Included in that review will be an assessment of the impact of the contractual payment periods on commercial practice, and the practical operation of the legislation. The results will be made known to the Council and the Parliament, accompanied by proposals for improvement, where appropriate.

(1) Directive 2000/35/EC of the Parliament and the Council of 29 June 2000 on combating late payment in commercial transactions.