European Parliament legislative resolution on the common position adopted by the Council with a view to adopting a European Parliament and Council directive on combating late payment in commercial transactions (8790/1/1999 - C5-0125/1999 - 1998/0099(COD))
Date: 1999-12-16
Institutions: European Parliament
Subjects: commercial law, deadline for payment, financial solvency, financial transaction, payment, trade policy

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Delivers a favourable opinion on the appointment of Mr Jan O. Karlsson to the office of Member of

1.
the Court of Auditors;

Instructs its President to forward this opinion to the Council and, for information, to the Court of
2.
Auditors, the other institutions of the European Communities and the Audit Offices of the Member States.

2. Late payment in commercial transactions ***II

A5-0099/1999

European Parliament legislative resolution on the common position adopted by the Council with a
view to adopting a European Parliament and Council directive on combating late payment in com-
mercial transactions (8790/1/1999 ’ C5-0125/1999 ’ 1998/0099(COD))

(Codecision procedure: second reading)

The European Parliament,

( having regard to the Council common position (8790/1/1999 ( C5-0125/1999) (1),

( having regard to its position at first reading (2) on the Commission proposal to Parliament and the

Council (COM(1998) 126) (3),

( having regard to the Commission’s amended proposal (COM(1998) 615) (4),

( having regard to Article 251(2) of the EC Treaty,

( having regard to Rule 80 of its Rules of Procedure,

( having regard to the recommendation for second reading of the Committee on Industry, External

Trade, Research and Energy (A5-0099/1999),

1.

2.

Amends the common position as follows;

Instructs its President to forward its position to the Council and Commission.

COMMON POSITION
OF THE COUNCIL

AMENDMENTS
BY PARLIAMENT

(Amendment 1)

Recital 3a (new)

(3a) On 29 May 1997 the Economic and Social Commit-
tee adopted an opinion on the Commission’s Green Paper
on Public Procurement in the European Union: Exploring
the Way Forward (1), recommending maximum payment
periods and interest on late payments by public authori-
ties;

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

(1) OJ C 284, 6.10.1999, p. 1.
(2) OJ C 313, 12.10.1998, p. 142.
(3) OJ C 168, 3.6.1998, p. 13.
(4) OJ C 374, 3.12.1998, p. 4.

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AMENDMENTS
BY PARLIAMENT

(Amendment 2)

Recital 6a (new)

(6a)
In the case of certain products, such as perishable
foodstuffs, late payments are attributable not to real mar-
ket requirements but rather to distortions of competition
which should be corrected;

(Amendment 3)

Recital 6b (new)

In some Member States contractual payment peri-

(6b)
ods differ significantly from the Community average;

(Amendment 4)

Recital 11

(11) This Directive should be limited to payments made as
remuneration for commercial transactions and does not regu-
late transactions with consumers, interest in connection with
other payments, e.g. payments under the laws on cheques and
bills of exchange, payments made as compensation for
damages including payments from insurance companies;

(11) This Directive should be limited to payments made as
remuneration for commercial transactions and does not regu-
late transactions with consumers, interest in connection with
other payments, e.g. payments under the laws on cheques and
bills of exchange, or payments made as compensation for
damages;

(Amendment 5)

Recital 14

(14)
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 pro-
cedures for redress; a decisive shift is necessary to reverse this
trend and to ensure that the consequences of late payments are
such as to discourage late payment;

(14)
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 pro-
cedures for redress; a decisive shift is necessary to reverse this
trend and to ensure that the consequences of late payments are
such as both to discourage late payments and to compensate
creditors for the costs incurred;

(Amendment 6)

Recital 17a (new)

(17a) The use of retention of title clauses as a means of
speeding up payment is at present constrained by a num-
ber of differences in national law; 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, and that excessive pay-
ment periods and late payments in commercial transac-
tions do not distort the functioning of the internal mar-
ket;

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AMENDMENTS
BY PARLIAMENT

(Amendment 7)

Recital 17b (new)

(17b) Public authorities handle a considerable volume of
payments to businesses; strict payment discipline on the
part of these authorities would have a beneficial trickle-
down effect on the economy as a whole; with regard to
public contracts, contracting enterprises in turn likewise
delay payments to their suppliers and subcontractors,
habitually imposing excessive payment periods ’ prac-
tices which seriously damage the interests of many busi-
nesses, especially SMEs; for payments executed by the
Commission it has already been decided to give certain
creditors the right to receive default interest on late pay-
ments;

(Amendment 8)

Recital 18

(18) Article 4 of this Directive requires that the recovery pro-
cedure for unchallenged claims be completed within a short
period of time in conformity with national legislation, but does
not require Member States to adopt a specific procedure or to amend
their existing legal procedures in a specific way;

(18) Article 4 of this Directive requires that the recovery pro-
cedure for unchallenged claims be completed within a short
period of time in conformity with national legislation;

(Amendment 9)

Recital 18a (new)

It is necessary that this Directive address the pro-

(18a)
blem of long contractual payment periods;

(Amendment 10)

Recital 18b (new)

(18b) The term ‘contracting authorities’ should corre-
spond to the definition laid down in Directive 92/50/
EEC (1) and Directive 93/37/EEC (2) and should include, for
the purposes of the present Directive, the ‘contracting
entities’ as defined in Directive 93/38/EEC (3);

(1) OJ L 209, 24.7.1992, p. 1.
(2) OJ L 199, 9.8.1993, p. 54.
(3) OJ L 199, 9.8.1993, p. 84.

(Amendment 11)

Article 2(2a) (new)

2a.

‘retention of title’ means the agreement, irrespective
of any formal requirements, that the seller remains
the owner of the goods in question until the price
has been paid in full; the term ‘seller’ shall comprise
the supplier of goods which are to be produced or
manufactured;

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AMENDMENTS
BY PARLIAMENT

(Amendment 12)

Article 2(2b) (new)

2b.

‘interest rate applied by the European Central Bank to
its main refinancing operations’ means the interest
rate applied to such operations in the case of fixed
rate tenders. In the event that a main refinancing
operation was conducted according to a variable rate
tender procedure, this interest rate refers to the mar-
ginal interest rate which resulted from that tender.
This applies both in the case of single rate and vari-
able rate auctions;

(Amendment 13)

Article 2(3a) (new)

3a.

‘contracting authorities’ corresponds to the definition
laid down in Directive 92/50/EEC and Directive 93/37/
EEC and includes the ‘contracting entities’ as defined
in Directive 93/38/EEC (1).

(1) OJ L 199, 9.8.1993, p. 84.

(Amendment 14)

Article 2(3b) (new)

3b.

‘public procurement contracts’ means contracts for
pecuniary interest concluded in writing between a
contracting authority within the meaning of point 3a
and an undertaking which is not a contracting auth-
ority.

(Amendment 15)

Article 3(1)(b)

(b)

if the date or period for payment is not fixed in the con-
tract, interest shall become payable automatically without
the necessity of a reminder:
(i) 30 days following the date of receipt by the debtor of

(ii)

the invoice or an equivalent request for payment, or
if the date of the receipt of the invoice or the equiva-
lent request for payment is uncertain, 30 days after
the date of receipt of the goods or services, or

(iv)

(iii) if the debtor receives the invoice or the equivalent
request for payment earlier than the goods or the ser-
vices, 30 days after the receipt of the goods or ser-
vices, or
if a procedure of acceptance or verification, by which
the conformity of the goods or services with the con-
tract is to be ascertained, is provided for by statute or
in the contract and if the debtor receives the invoice
or the equivalent request for payment earlier or on the
date on which such acceptance or verification takes
place, 30 days after this latter date;

(b)

if the date or period for payment is not fixed in the con-
tract, interest shall become payable automatically without
the necessity of a reminder:
(i) 21 days following the date of receipt by the debtor of

(ii)

the invoice or an equivalent request for payment, or
if the date of the receipt of the invoice or the equiva-
lent request for payment is uncertain, 21 days after
the date of receipt of the goods or services, or

(iv)

(iii) if the debtor receives the invoice or the equivalent
request for payment earlier than the goods or the ser-
vices, 21 days after the receipt of the goods or ser-
vices, or
if a procedure of acceptance or verification, by which
the conformity of the goods or services with the con-
tract is to be ascertained, is provided for by statute or
in the contract and if the debtor receives the invoice
or the equivalent request for payment earlier or on the
date on which such acceptance or verification takes
place, 21 days after this latter date;

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AMENDMENTS
BY PARLIAMENT

(Amendment 16)

Article 3(1)(d)

(d)

the level of interest for late payment (‘the statutory rate’),
which the debtor is obliged to pay, shall be the sum of the
interest rate of the main refinancing facility of the European
Central Bank (ECB) in the form of two-week-tenders at fixed
interest rates in force on the first ECB business day of the
half-year in question (‘the reference rate’), plus at least
6 percentage points (‘the margin’), unless otherwise speci-
fied in the contract. For a Member State which is not par-
ticipating in the third stage of Economic and Monetary
Union, the reference rate referred to above shall be the
equivalent rate set by its national central bank. In both
cases, the reference rate in force on the first central bank
business day of the half-year in question shall apply for
the following 6 months.

(d)

the level of interest for late payment (‘the statutory rate’),
which the debtor is obliged to pay, shall be the sum of the
interest rate applied by the European Central Bank to its
most recent main refinancing operation carried out
before the first calendar day of the half-year in question
(‘the reference rate’), plus at least 8 percentage points (‘the
margin’), unless otherwise specified in the contract. For a
Member State which is not participating in the third stage
of Economic and Monetary Union,
the reference rate
referred to above shall be the equivalent rate set by its
national central bank. In both cases, the reference rate in
force on the first calendar day of the half-year in question
shall apply for the following 6 months.

(Amendment 17)

Article 3(1)(da) (new)

(da)

in addition to the right to interest, the creditor shall
be entitled to claim compensation from the debtor for
the losses incurred through the latter’s late payment,
including the following costs:
(i)

the cost of the creditor’s bank loans or overdraft,
to the extent that this is not already fully com-
pensated by the right to interest;

(ii) the administrative costs of recovery within the

creditor’s business;

(iii)

the costs of recovery through debt recovery

agencies, and

(iv)

the costs of recovery through court proceedings.

Member States may act to ensure that any claims for com-
pensation under items (ii), (iii) and (iv) above are in rea-
sonable proportion to the debt in question.

(Amendment 19)

Article 3(3)

3. Member States shall ensure that an agreement on the date
for payment or on the consequences of late payment which is
not in line with the provisions of paragraphs 1 and 2 either
shall not be enforceable or shall give rise to a claim for
damages if, when all circumstances of
including
good commercial practice, are considered, it is grossly unfair
If such an agreement
to the creditor.
is determined to be
grossly unfair,
the statutory terms will apply, unless the
national courts determine different conditions which are fair.

the case,

3. Member States shall ensure that an agreement on the date
for payment or on the consequences of late payment which is
not in line with the provisions of paragraphs 1 (b) to (d) and 2
either shall not be enforceable or shall give rise to a claim for
damages if, when all circumstances of the case, including good
commercial practice and the nature of the product, are con-
sidered,
it is grossly unfair to the creditor. In determining
whether an agreement is grossly unfair to the creditor, it
will be taken into account whether the debtor has any

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BY PARLIAMENT

objective reason to deviate from the provisions of para-
graphs 1 (b) to (d) and 2 or whether the agreement mainly
serves the purpose of procuring the debtor additional
liquidity at the expense of the creditor. If such an agree-
ment is determined to be grossly unfair, the statutory terms
will apply, unless the national courts determine different condi-
tions which are fair.

3a. Member States shall ensure that, in the interests of
creditors and of competitors, adequate and effective
means exist to prevent the continued use of terms which
are grossly unfair within the meaning of paragraph 3.

3b.
The means referred to in paragraph 3a shall include
provisions whereby persons or organisations representing
the interests of small and medium-sized enterprises, as
defined in Commission Recommendation 96/280/EC (1),
may take action according to the national law concerned
before the courts or before competent administrative
bodies for a decision as to whether contractual terms
drawn up for general use are grossly unfair within the
meaning of paragraph 3, so that they can apply appropri-
ate and effective means to prevent the continued use of
such terms.

3c. With due regard for national laws, the legal reme-
dies referred to in paragraph 3b may be directed sepa-
rately or jointly against a number of buyers from the
same economic sector or their associations who use or
recommend the use of
the same general contractual
terms or similar terms.

(1) OJ L 107, 30.4.1996, p. 4.

(Amendment 20)

Article 3a (new)

Article 3a

Retention of title

1. Member States shall ensure that the seller retains
title to durable and/or capital goods if a retention of title
clause has been agreed. Apart from an individual contract,
such an agreement shall be considered valid if the reten-
tion of title clause is contained in the seller’s standard
contract, to which the buyer has not objected. No other
formality shall be required.

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

3. Once the period for payment has passed without the
buyer having paid, the seller may demand that the goods
in question be returned to him. Member States shall pro-
vide for retention of title to be enforceable against third
parties, even in the case of bankruptcy of the debtor or in
the case of any other procedure recognised as being simi-
lar under the legislation of the Member States. No later

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AMENDMENTS
BY PARLIAMENT

than when the buyer takes possession of the goods, he
becomes responsible for any damage to or loss of the
goods.

4. Member States may adopt provisions dealing with
down-payments already made by the debtor. They may
limit or exclude recourse to retention of title in the fol-
lowing cases:
(a) where a third party has acquired the goods in ques-

tion in good faith;

(b) where the goods in question have been incorporated
into or mixed with other goods, unless the process
can be reversed without causing significant damage
to the other goods.

(Amendment 21)

Article 3b (new)

Article 3b

Transparency of public procurement contracts

Member States shall ensure that calls for tender and public
procurement contracts contain precise details of the pay-
ment periods and deadlines applied by the contracting
authorities, even if these payment periods and deadlines
are determined in general contract conditions laid down
by law. In particular, time limits shall be set for the com-
pletion of pre-payment administrative formalities, such as
public works reception procedures. A similar obligation of
transparency shall apply in the relationship between a
main contractor and a subcontractor carrying out public
works.

(Amendment 22)

Article 3c (new)

Article 3c

Prompt payment, default date and automatic interest

Member States shall ensure that:

the period for payment of contractual debts by the
1.
contracting authorities
as determined under Article
3(1)(a) to (c) is not more than 45 calendar days except
in
where the value of the contract exceeds € 100 000,
which case the maximum period for payment shall be
60 calendar days; the contract may under no circum-
stances override these time limits; in a public contract,
the main contractor shall grant conditions to the suppliers
and subcontractors which are at least as favourable as
those granted to the main contractor by the contracting
authority; in order to guarantee these conditions to sup-
pliers and subcontractors, the main contractor shall be
required to provide a guarantee made out to the supplier
or subcontractor covering payment of all the amounts

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OF THE COUNCIL

AMENDMENTS
BY PARLIAMENT

owed. This guarantee shall be executable upon expiry of
60 calendar days from the date of submission of the
invoice to the main contractor by the supplier or subcon-
tractor. The same conditions shall apply between the main
contractor and the contracting authority;

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

3.
the contracting authority is not permitted to request
or require that the creditor waive any of the rights
referred to in this Article, nor may the creditor request
or require that his suppliers or subcontractors waive
those rights.

(Amendment 23)

Article 4(1) to (3)

1. Member States shall ensure that an enforceable title can
be obtained, irrespective of the amount of the debt, normally
within 90 calendar days of the lodging of the creditor’s action
or application at the court or other competent authority, pro-
vided that the debt or aspects of the procedure are not dis-
puted. This duty shall be carried out by Member States in con-
formity with their respective national
legislation, regulations
and administrative provisions.

1. Member States shall ensure that an enforceable title can
be obtained, irrespective of the amount of the debt, normally
within 60 calendar days of the lodging of the creditor’s action
or application at the court or other competent authority, pro-
vided that the debt or aspects of the procedure are not dis-
puted. This duty shall be carried out by Member States in con-
formity with their respective national
legislation, regulations
and administrative provisions.

The

respective national

2.
and
administrative provisions shall apply the same conditions for
all creditors who are estblished in the European Community.

regulations

legislation,

The

respective national

2.
and
administrative provisions shall apply the same conditions for
all creditors who are estblished in the European Community.

regulations

legislation,

The 90-calendar-day period referred to in paragraph 1

3.
shall not include the following:
(a) periods for service of documents,
(b) any delays caused by the creditor, such as periods devoted

The 60-calendar-day period referred to in paragraph 1

3.
shall not include the following:
(a) periods for service of documents,
(b) any delays caused by the creditor, such as periods devoted

to correcting invalid applications.

to correcting invalid applications.

(Amendment 24)

Article 5(3)(ba) (new)

(ba)

claims for interest of less than € 5.

(Amendment 25)

Article 5(5)

5.
The Commission shall undertake for at least the first
three years after …* an annual review of, inter alia, the statu-
tory rate to assess the impact on commercial transactions and
the operation of the legislation in practice. The results of this

5.
The Commission shall undertake for at least the first
three years after …* an annual review of, inter alia, the statu-
tory rate, contractual payment periods and late payments,
transactions and the
to assess the impact on commercial

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AMENDMENTS
BY PARLIAMENT

review and of other reviews will be made known to the Euro-
pean Parliament and the Council.

operation of the legislation in practice. The results of this
review and of other reviews will be made known to the Euro-
pean Parliament and the Council, accompanied where appro-
priate by proposals for improvement of this Directive.

(Amendment 26)
Annex (new)

ANNEX

List of clauses to be recognised by Member States for the
purposes of Article 3a

‘El vendedor conservará la propiedad de los bienes

ES:
hasta el pago final.’

‘Varen forbliver sælgerens ejendom,

DA:
fuldstændig betalt.’

indtil den er

DE: ‘Die Ware bleibt bis zur vollständigen Bezahlung im
Eigentum des Verkäufers.’

EL: ‘Ο πωλητη΄ς παρακρατει΄ την κυριο΄τητα των αγαθω΄ν µε΄χρι
την πλη΄ρη εξο΄φληση του τιµη΄µατος’

‘The goods remain the property of the seller until

EN:
fully paid.’

FR: ‘Les marchandises restent la propriété du vendeur jus-
qu’au paiement complet.’

‘Le merci restano di proprietà del venditore fino al

IT:
pieno pagamento.’

NL: ‘De waren blijven tot de volledige betaling eigendom
van de verkoper.’

PT: ‘O vendedor conservará a propriedade dos bens até ao
momento do pagamento final.’

FI: ‘Tavara on myyjän omaisuutta, kunnes kauppahinta on
kokonaisuudessaan maksettu.’

SV: ‘Varorna förblir säljarens egendom tills de betalats helt
och hållet.’