Proposal for a Directive of the European Parliament and of the Council on combating late payment in commercial transactions (Recast) implementing the Small Business Act {SEC(2009) 315} {SEC(2009) 316}
Date: 2009-03-18
Institutions: European Commission
Subjects: administrative formalities, competitiveness, entrepreneurship, payment, public administration, small and medium-sized enterprises, trading operation

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 8.4.2009 
COM(2009) 126 final 

2009/0054 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  

on combating late payment in commercial transactions 

(Recast) 
Implementing the Small Business Act 

{SEC(2009) 315} 
{SEC(2009) 316} 

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EXPLANATORY MEMORANDUM 

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CONTEXT OF THE PROPOSAL 

•  Grounds for and objectives of the proposal 

Many payments in commercial transactions between businesses or between businesses 
and public authorities are made very late after delivery and often later than agreed or 
laid down in general commercial conditions. These practices impinge on liquid assets 
and  complicate  the  financial  management  of  enterprises.  Late  payments  affect  the 
competitiveness and viability of companies, notably SMEs. Payment delays also have a 
negative  effect  on  intra-Community  commercial  transactions.  Payment  delays  can  be 
responsible  for  bankruptcies  of  otherwise  viable  businesses  with  the  potential  to 
trigger,  in  the  worst  case  scenario,  a  series  of  bankruptcies  across  the  supply  chain. 
This risk strongly increases in periods of economic downturn when access to financing 
is  particularly  difficult.  There  are  signs  that  this  has  started  to  happen  as  the  current 
economic crisis unfolds, calling for a strong policy reaction.  

The Small Business Act [COM(2008)394] highlighted the key importance of SMEs for 
the  competitiveness  of  the  EU  economy  and  stressed  that  effective  access  to  finance 
was  one  of  the  major  challenges  SMEs  have  to  face,  together  with  the  need  to  make 
better use of the opportunities provided by the Single Market. The European Economic 
Recovery  Plan  [COM(2008)  800]  stressed  that  sufficient  and  affordable  access  to 
finance was a pre-condition for investment, growth and job creation in the context of 
the economic slowdown and asked the EU and the Member States to ensure that public 
authorities pay invoices for supplies and services within one month.  

Late  payment  by  public  administrations  undermines  the  credibility  of  policies  and 
contradicts  declared  policy  objectives  to  provide  for  stable  and  predictable  operating 
conditions for enterprises and foster growth and employment. Given the importance of 
public procurement in the EU (more than 1,943 billion euro per year), late payment by 
public  authorities  has  a  strong  negative  impact  on  enterprises,  notably  SMEs.  Many 
public  authorities  do  not  face  the  same  financing  constraints  as  businesses  and  late 
payment  in  their  case  is  avoidable.  It  should  therefore  be  more  severely  sanctioned 
when  it  occurs.  Moreover,  diverging  payment  attitudes  across  the  EU  might  hamper 
business  participation  in  public  tenders,  which  not  only  distorts  competition  and 
undermines  the  functioning  of  the  internal  market,  but  also  reduces  the  capacity  of 
public authorities to get best value for tax payers' money.  

Accordingly,  this  proposal  aims  at  improving  the  cash  flow  of  European  business 
which  is  particularly  important  in  times  of  economic  downturn.  It  also  aims  at 
facilitating the smooth functioning of the internal market via the elimination of related 
barriers to cross-border commercial transactions. 

It  will  achieve  this  by  providing  creditors  with  instruments  that  enable  them  to  fully 
and  effectively  exercise  their  rights  when  paid  late  and  by  confronting  public 
administrations with measures that effectively discourage them from paying late.  

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120 

•  General context 

In the EU, most goods and services are supplied by businesses to other businesses and 
to public authorities on a deferred payment basis whereby the supplier gives the client 
time to pay. This time period is agreed between the parties, or set out in the supplier's 
invoice or laid down by law. At the latest at the end of this period, the supplier expects 
payment for the goods delivered or services rendered. Payment made after this period 
constitutes late payment.  

Directive 2000/35/EC was adopted to combat late payment in commercial transactions 
between businesses or between businesses and public authorities. It specifies, inter alia, 
that statutory interest may be charged when payment is not made within the contractual 
or legal deadline. 

There  is  overwhelming  evidence  that,  despite  the  entry  into  force  of  Directive 
2000/35/EC late payment in commercial transactions is still a general problem within 
the  EU.  In  addition,  there  is  also  evidence  in  a  number  of  Member  States  of 
unjustifiably  long  contractual  payment  periods  in  transactions  involving  public 
administrations.  Both  problems  are  a  serious  impediment  to  a  healthy  business 
environment  and  to  the  functioning  of  the  single  market  magnified  in  times  of 
economic  downturn.  The  roots  of  late  payment  in  commercial  transactions  and  the 
corresponding passive attitude of many creditors are diverse and interrelated: 

1. The market structure: the level of competition within a market, the market power of 
market  participants  and  the  corresponding  fear  of  harming  commercial  relationships 
with  clients  are  important  factors  determining  whether  creditors  accept  or  refuse  late 
payment and whether debtors seek an extension of the period of trade credit. 

2. Changing macroeconomic conditions: A business cycle downturn is likely to cause 
more  late  payments  as  firms  delay  paying  their  invoices.  The  consequences  of  late 
payment are also more serious in times of economic downturn as alternative financing 
is more difficult to obtain. 

3.  Access  to  finance  and  budgetary  constraints:  The  availability  of  credit,  monetary 
policy, the flow and nature of credit information, the liquidity position of the firm and 
the  availability  of  financial  resources  from  banks  may  also  affect  late  payment, 
particularly for businesses for which bank credit is a substitute for supplier financing. 
Many debtor enterprises consider late payment an efficient and cheap way to finance 
their  own  businesses  and  activities.  For  public  authorities,  late  payments  to  creditors 
are  an  easy,  but  unjustified,  way  to  overcome  budgetary  constraints  by  postponing 
payments to the next budgetary period. 

4. The financial management practice of debtors (including public authorities) and the 
credit management practice of creditors as well as their product and service quality and 
after-sales service are important factors in (avoiding) late payment.  

5. The absence of effective and efficient remedies: despite Directive 2000/35/EC, many 
businesses, in particular SMEs, do not charge interest when entitled to do so, which in 
turn decreases the motivation of debtors to pay in time. For some creditors, the cost of 
taking  action  against  late  payment  is  not  justified  by  the  financial  benefits.  In  many 
cases,  the  expenses  of  the  extra  paperwork  cannot  be  recovered.  Chasing  late  paying 

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clients or charging interest for late payments generates administrative costs that many 
businesses  wish  to  avoid.  In  addition,  several  key  provisions  of  the  Directive  are 
unclear or difficult to implement in practice. 

Although Directive 2000/35/EC has some shortcomings, the fundamental concepts of 
interest  for  late  payment,  the  retention  of  title  and  recovery  procedures  for 
unchallenged  claims  constitute  essential  and  widely  accepted  pillars  of  the  legal 
framework combating late payment. However, despite some recent improvements, late 
payment  remains  a  generalized  problem  in  the  EU,  with  public  administrations  in  a 
number  of  Member  States  displaying  particularly  bad  payment  behaviour.  This 
continues to negatively affect the functioning of the internal market and risks posing a 
serious  threat  to  business  survival  in  times  of  economic  crisis.  Therefore,  while 
safeguarding the main elements of the Directive, it is essential to introduce additional 
tools  to  reduce  the  number  of  late  payments  in  commercial  transactions,  to  shorten 
payment periods for public administrations and to substantially reinforce the incentives 
for public administrations to pay in time by recasting the Directive, incorporating in a 
single text both the substantive amendments made to the Directive and its unchanged 
provisions.  This  proposal  would  replace  and  repeal  Directive  2000/35/EC.  Once 
adopted by the legislator, it will naturally be taken into account by the Commission at 
the  occasion  of  the  forthcoming  revision  (2010)  of  the  Financial  Regulation  and  its 
Implementing Rules. 

Meanwhile, as the revision of the financial rules by the legislator is a long process, the 
Commission adopted a Communication1 instructing its services to implement without 
delay  a  set  of measures  aimed at streamlining financial  rules  and accelerating budget 
implementation  to  help  economic  recovery,  in  particular  through  the  improvement  of 
its  own  payment  performance  and  the  setting  of  targets  for  reduced  payment  time-
limits. 

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•  Existing provisions in the area of the proposal 

The  only  existing  provision  is  Directive  2000/35/EC  which  would  be  recast  by  this 
proposal. 

•  Consistency with the other policies and objectives of the Union 

This  proposal  is  part  of  the  Lisbon  Agenda  for  Growth  and  Jobs  and  implements  the 
Small  Business  Act  [COM(2008)394]  and  the  Commission  Communication  on  a 
European Economic Recovery Plan [COM(2008)800]. 

2. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

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Consultation methods, main sectors targeted and general profile of respondents 

Stakeholders  were  consulted  in  a  general  public  consultation  through  I.P.M.  (Your 

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SEC(2009)477final of 8 April 2009. 

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Voice in Europe). The EBTP (European Business Test Panel) was also consulted.  

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Summary of responses and how they have been taken into account 

A broad majority of respondents believes that the current statutory rate laid down in the 
directive  is  satisfactory.  Most  respondents,  however,  urged  the  Commission  to  put  in 
place effective and efficient remedies in case of late payment and to strengthen the role 
of representative organisations. The responses served as a very important element for 
the impact assessment.  

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3. 

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An open consultation was conducted over the internet from 19/05/2008 to 31/08/2008. 
The  Commission 
results  are  available  on 
http://ec.europa.eu/enterprise/regulation/late_payments/index.htm. 

response(s).  The 

received  510 

•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

The  impact  assessment  and  its  executive  summary  give  an  overview  of  the  different 
options.  

Only  options  3a/2  (legislative  -  harmonisation  of  periods  for  payment  by  public 
authorities  to  businesses),  3c  (legislative  -  the  abolition  of  the  €5  threshold),  3d 
(legislative  -  the  introduction  of  a  "Late  Payment  Fee")  and  3e  (legislative  -  the 
introduction  of  a  "Late  Payment  Compensation")  meet  the  criteria  of  effectiveness, 
efficiency  and  consistency.  Therefore,  these  4  options  constitute  the  basis  of  this 
proposal. 

The  Commission  carried  out  an  impact  assessment  listed  in  the  Work  Programme, 
on 
is 
whose 
http://ec.europa.eu/enterprise/regulation/late_payments/index.htm. 

accessible 

report 

LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

This  recast  of  Directive  2000/35/EC  aims  at  improving  the  effectiveness  and  the 
efficiency  of  remedies  for  late  payment  through  the  introduction  of  an  entitlement  to 
the recovery of administrative costs and compensation for internal costs incurred due to 
late  payment.  In  the  case  of  public  administrations,  the  proposal  aims  at  shortening 
payment  periods  through  the  harmonisation  of  periods  for  payment  by  public 
authorities to businesses and at reinforcing disincentives to late payment by a flat rate 
compensation from the first day of the delay amounting to 5% of the invoiced amount 
in  addition  to  the  interest  for  late  payment  and  the  compensation  for  recovery  costs. 
Finally, the proposal also abolishes the possibility to exclude claims for interest of less 
than €5. 

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•  Legal basis 

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Article 95 EC Treaty. 

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•  Subsidiarity principle 

The  subsidiarity  principle  applies  insofar  as  the  proposal  does  not  fall  under  the 
exclusive competence of the Community. 

The  objectives  of  the  proposal  cannot  be sufficiently  achieved  by  the  Member  States 
for the following reason(s). 

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In  the  absence  of  Community  legislation  prior  to  the  implementation  of  Directive 
2000/35/EC, late payment in commercial transactions was an important impediment to 
intra-Community trade. 

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This is because the absence or ineffectiveness of national rules combating late payment 
unfairly  protects  national  economic  operators  against  products  and  services  coming 
from other Member States. Failure by a Member State to prevent obstacles to the free 
movement  of  goods  or  services  originating  in  other  Member  States  caused  by  late 
payment  by  national  authorities  or  undertakings  is  just  as  damaging  to  intra-
Community trade as a trade-restrictive act. In addition, diverging payment attitudes of 
public authorities across the EU might hamper business participation in public tenders, 
which  not  only  distorts  competition  and  undermines  the  functioning  of  the  internal 
market,  but  also  reduces  the  capacity  of  public  authorities  to  get  best  value  for  tax 
payers' money. 

Community action will better achieve the objectives of the proposal for the following 
reason(s). 

The objective of ensuring the functioning of the internal market by reducing obstacles 
to  intra-EU  trade  arising  from  late  payment  could  not  be  sufficiently  achieved  by 
Member  States  or  by  Directive  2000/35/EC.  It  was  therefore  felt  appropriate  in 
accordance with the principle of subsidiarity, by reason of the scale and effects of the 
problem, to achieve this by further action at Community level. 

Surveys and consultation of stakeholders confirm that the reduction of late payment in 
commercial transactions requires EU action through a recast of Directive 2000/35/EC. 
The available figures indicate that most businesses perceive selling goods and services 
to businesses and authorities in another Member States as entailing a higher risk of late 
payment. Among other reasons, the risk of late payment discourages enterprises from 
selling products and services in other Member States since it increases uncertainty and 
the cost of doing business. In that case, transaction costs are higher due to asymmetric 
information  and  insecurity  about  the  market  position  and  the  solvency  of  a  client 
established outside the domestic market. For many debtors the risk to reputation related 
to  late  payment  is  much  lower  when  the  creditor  is  established  in  another  Member 
State since the damage to reputation diminishes with distance. Moreover, trade across 
national  borders  amplifies  the  costs  of  offering  trade  credit  because  language, 
jurisdiction and access to solvency data tend to be different and, thus, monitoring costs 
increase  while  the  chances  of  successfully  enforcing  payment  are  lower.  As  a  result, 
trade  credit  insurance  and  other  instruments  coping  with  trade  risk  management  are 
often used in cross-border trade. These instruments reduce revenue uncertainty but may 

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absorb an important fraction of the profit margin, in particular for small enterprises.  

During the impact assessment process, many non-legislative options were discarded for 
reasons related to subsidiarity as set out in detail in the impact assessment. 

The proposal therefore complies with the subsidiarity principle. 

•  Proportionality principle 

The proposal complies with the proportionality principle for the following reason(s). 

The  Directive  remains  an  optional  instrument  for  economic  operators  in  so  far  as  it 
does not oblige  them to claim interest  for late payment  or  to claim  compensation for 
recovery  costs.  Moreover,  the  proposal  does  not  prevent  undertakings  from  agreeing 
upon  other  contractual  provisions  regarding  payment,  including  in  the  case  of 
transactions  between  undertakings  and  in  exceptional  cases  also  between  public 
authorities  and  undertakings  the  payment period, in accordance  with the fundamental 
principle  of  freedom  of  contract  between  economic  operators.  The  proposal  also 
includes sufficient flexibility to allow Member States to transpose the Directive in the 
light of economic and commercial conditions in their territory. In addition, the proposal 
does  not  affect  the  existing  possibility  for  Member  States  to  maintain  or  bring  into 
force  provisions  which  are  more  favourable  to  the  creditor  than  the  provisions 
necessary to comply with the Directive. 

This proposal does not lead to any new administrative burden for economic operators. 
The  financial  burden  stemming  from  the  new  entitlement  to  claim  reimbursement  of 
recovery  costs  will  be  proportional  to  businesses'  payment  behaviour.  The  budgetary 
impact  for  national  authorities  will  be  proportional  to  their  capacity  to  ensure 
compliance with the provisions of the directive. 

•  Choice of instruments 

Proposed instruments: directive. 

Other means would not be adequate for the following reason(s). 

Considering that this proposal is a recast of an existing Directive which provides for a 
wide margin of manoeuvre for Member States, alternative options would not have been 
sufficient to achieve the proposed objectives 

BUDGETARY IMPLICATION 

The budgetary implications are limited to administrative expenditure. 

ADDITIONAL INFORMATION 

•  Simplification 

The proposal provides for simplification of legislation. 

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The  definitions  of  essential  terms  of  the  Directive  are  broadened  and  regrouped  in 
order to put an end to divergent interpretations. Ambiguous provisions as regards the 
rights of creditors are either deleted or fully redrafted so that economic operators know 
exactly  their  rights  under  the  Directive.  A  further  element  of  simplification  is  the 
general obligation of transparency introduced for the Member States. Finally, the vague 
concept  of "recovery  costs" is replaced by a new system consisting  of a defined sum 
for internal recovery costs. 

The  proposal  is  included  in  the  Commission's  rolling  programme  for  up-date  and 
simplification of the acquis communautaire and its Work and Legislative Programme 
under the reference 2009/ENTR/006. 

•  Repeal of existing legislation 

The adoption of the proposal will lead to the repeal of existing legislation. 

•  Review/revision/sunset clause 

The proposal includes a review clause. 

•  Recasting 

The proposal involves recasting 

•  Correlation table 

The  Member  States  are  required  to  communicate  to  the  Commission  the  text  of 
national  provisions  transposing  the  Directive  as  well  as  a  correlation  table  between 
those provisions and this Directive. 

•  European Economic Area 

The proposed act concerns an EEA matter and should therefore extend to the European 
Economic Area. 

•  Detailed explanation of the proposal 

The  provisions  of  Directive  2000/35/EC  on  its  scope  (Article  1  of  this  proposal), 
interest  in  case  of  late  payment  (Article  3),  the  retention  of  title  (Article  8)  and  the 
recovery  procedure  for  unchallenged  claims  (Article  9)  remain  fundamentally 
unchanged. The various definitions and concepts are streamlined and brought together 
in Article 2. 

The reasons for the other proposed substantive amendments are the following: 

Article  1(2)  removes  the  possibility  that  claims  for  interest  of  less  than  €5  may  be 
excluded  by  Member  States.  This  will  clear  a  hurdle  for  claiming  interest  for  late 
payments,  in  particular  for  SMEs  and  for  late  payment  in  smaller  transactions  where 
interest amounts to only a small sum. 

Article 4 specifies that, in the case of late payment, creditors will be entitled to obtain a 

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sum  for  internal  recovery  costs  related  to  the  amount  paid  late.  The  objective  is 
twofold: firstly, the creditor would be able to recover his internal administrative costs 
related  to  late  payment  and,  secondly,  this  would  have  a  deterrent  effect  on  debtors, 
additional to the statutory interest. 

Article  5  of  the  proposal  tackles  late  payment  by  public  authorities  which  will  be 
obliged  as  a  general  rule  to  pay  invoices  for  commercial  transactions  leading  to  the 
delivery  of  goods  or  the  provision  of  services  within  30  days.  Past  this  period,  the 
creditor will in principle be entitled to compensation of 5% of the amount specified, in 
addition to the interest for late payment and the compensation for recovery costs. The 
budgetary  impact  for  national  authorities  will  be  proportional  to  their  capacity  to 
ensure  compliance  with  the  provisions  of  the  directive.  In  addition,  the  expected 
improvement in payment behaviour of public authorities will help reduce the number 
of business bankruptcies and thus reduce the social costs that they entail. 

Article  6  of  the  proposal  strengthens  the  provisions  about  grossly  unfair  contractual 
clauses.  It  includes  a  provision  whereby  a  clause  which  excludes  interest  for  late 
payment will always be considered as grossly unfair. 

Article  7  obliges  Member  States  to  ensure  full  transparency  about  the  rights  and 
obligations  stemming  from  this  directive  and  in  particular  to  publish  the  statutory 
interest rate. This aims at providing in the most appropriate way practical information 
to businesses, and especially SMEs, and will enable them to take action against debtors 
paying late. 

Article  10  lays  down  the  monitoring  and  evaluation  system  allowing  other  European 
institutions and stakeholders an insight into the actual implementation of the Directive. 

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2009/0054 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  

on combating late payment in commercial transactions 

(Recast) 

(Text with EEA relevance) 

(cid:208) 2000/35/EC 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 95 thereof, 

Having regard to the proposal from the Commission2, 

Having regard to the opinion of the European Economic and Social Committee3, 

Having regard to the opinion of the Committee of the Regions4, 

Acting in accordance with the procedure laid down in Article 251 of the Treaty, 

Whereas: 

(cid:216) new 

(1) 

A  number  of  substantive  changes  are  to  be  made  to  Directive  2000/35/EC  of  the 
European Parliament and of the Council of 29 June 2000 on combating late payment 
in commercial transactions5. In the interest of clarity, that Directive should be recast. 

(2)  Most  goods  and  services  are  supplied  within  the  internal  market  by  economic 
operators to other economic operators and to public authorities on a deferred payment 
basis whereby the supplier gives its client time to pay the invoice, as agreed between 
parties, or set out in the supplier’s invoice or laid down by law. 

2 
3 
4 
5 

OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
OJ L 200, 8.8.2000, p. 35. 

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(3)  Many  payments  in  commercial  transactions  between  economic  operators  or  between 
economic operators and public authorities are made later than agreed in the contract or 
laid down in the general commercial conditions. Although the goods are delivered or 
the services performed, many corresponding invoices are paid well after the deadline. 
Such  late  payment  negatively  affects  liquid  assets  and  complicates  the  financial 
management of enterprises. It also affects their competitiveness and profitability when 
the  creditor  needs  to  obtain  external  financing  because  of  late  payment.  This  risk 
strongly increases in periods of economic downturn when access to financing is more 
difficult 

(4) 

Judicial claims related to late payments are already facilitated by Council Regulation 
(EC)  No  44/2001  of  22  December  2000  on  jurisdiction  and  the  recognition  and 
enforcement  of  judgments  in  civil  and  commercial  matters6,  Regulation  (EC)  No 
805/2004 of the European Parliament and of the Council of 21 April 2004 creating a 
European Enforcement Order for uncontested claims7, Regulation (EC) No 1896/2006 
of  the  European  Parliament  and  of  the  Council  of  12  December  2006  creating  a 
European  order  for  payment  procedure8and  Regulation  (EC)  No  861/2007  of  the 
European  Parliament  and  of  the  Council  of  11  July  2007  establishing  a  European 
Small  Claims  Procedure9.  However,  in  order  to  discourage  late  payment  in 
commercial transactions, it is necessary to lay down complementary provisions. 

(1) In its resolution on the integrated programme in favour of SMEs and the craft sector10, the 
European  Parliament  urged  the  Commission  to  submit  proposals  to  deal  with  the 
problem of late payment. 

(cid:208) 2000/35/EC 
(adapted) 

Recital 

(1) 

(2)  On  12  May  1995  the  Commission  adopted  a  recommendation  on  payment  periods  in 

commercial transactions11. 

(cid:208) 2000/35/EC 
(adapted) 

Recital 

(2) 

(3) In its resolution on the Commission recommendation on payment periods in commercial 
transactions12,  the  European  Parliament  called  on  the  Commission  to  consider 

(cid:208) 2000/35/EC 
(adapted) 

Recital 

(3) 

6 
7 
8 
9 
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11 

OJ L 12, 16.1.2001, p. 1. 
OJ L 143, 30.4.2004, p. 15. 
OJ L 399, 30.12.2006, p.1. 
OJ L 199, 31.7.2007, p.1. 
OJ C323, 21.11.1994, p. 19. 
OJ L127, 10.6.1995, p. 19. 

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transforming  its  recommendation  into  a  proposal  for  a  Council  directive  to  be 
submitted as soon as possible. 

(4)  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 forward13. 

(cid:208) 2000/35/EC 
(adapted) 

Recital 

(4) 

(5)  On  4  June  1997  the  Commission  published  an  action  plan  for  the  single  market,  which 
underlined that late payment represents an increasingly serious obstacle for the success 
of the single market. 

(cid:208) 2000/35/EC 
(adapted) 

Recital 

(5) 

(6) 

On 17 July 1997 the Commission published a report on late payments in commercial 
transactions14,  summarising  the  results  of  an  evaluation  of  the  effects  of  the 
Commission's recommendation of 12 May 1995. 

(cid:208) 2000/35/EC 
(adapted) 

Recital 

(6) 

(7)  Heavy  administrative  and  financial  burdens  are  placed  on  businesses,  particularly  small 
and  medium-sized  ones,  as  a  result  of  excessive  payment  periods  and  late  payment. 
Moreover, these problems are a major cause of insolvencies threatening the survival of 
businesses and result in numerous job losses. 

(cid:208) 2000/35/EC Recital (7) 

(8)  In  some  Member  States  contractual  payment  periods  differ  significantly  from  the 

Community average. 

(cid:208) 2000/35/EC 
(adapted) 

Recital 

(8) 

12 
13 
14 

OJ C211, 22.7.1996, p. 43. 
OJ C287, 22.9.1997, p. 92. 
OJ C216, 17.7.1997, p. 10. 

EN 

12 

   EN 

 
 
 
 
 
 
                                                                                                                                                         
(9) The differences between payment rules and practices in the Member States constitute an 

obstacle to the proper functioning of the internal market. 

(cid:208) 2000/35/EC 
(adapted) 

Recital 

(9) 

(cid:208) 2000/35/EC 
(adapted) 

Recital 

(10) 

(5) 

This has the effect of considerably limiting commercial transaction between Member 
States. This is in contradiction with Article 14 of the Treaty as eEntrepreneurs should 
be  able  to  trade  throughout  the  internal  market  under  conditions  which  ensure  that 
transborder  operations  do  not  entail  greater  risks  than  domestic  sales.  Distortions  of 
competition  would  ensue  if  substantially  different  rules  applied  to  domestic  and 
transborder operations. 

(11)  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. 

(cid:208) 2000/35/EC 
(adapted) 

Recital 

(11) 

(cid:216) new 

(6) 

(7) 

In its communication "Think small first" – A "Small Business Act" for Europe15, the 
Commission  emphasized  that  small  and  medium-sized  enterprises'  (SMEs)  access  to 
finance should be facilitated and that a legal and business environment supportive to 
timely payments in commercial transactions should be developed. 

One  of  the  priority  actions  of  the  "European  Economic  Recovery  Plan"16  is  the 
reduction  of  administrative  burdens  and  the  promotion  of  entrepreneurship  by,  inter 
alia, ensuring that public authorities pay invoices, including to SMEs, for supplies and 
services within one month to ease liquidity constraints. 

(8) 

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. This Directive does not go beyond what is necessary to 

(cid:208) 2000/35/EC Recital (12) 

15 
16 

COM(2008)394. 
COM(2008)800.  

EN 

13 

   EN 

 
 
 
 
 
 
                                                 
achieve  that  objective.  This  Directive  complies  therefore,  in  its  entirety,  with  the 
requirements  of  the  principles  of  subsidiarity  and  proportionality  as  laid  down  in 
Article 5 of the Treaty. 

(cid:208) 2000/35/EC 
(adapted) 

Recital 

(13) 

(9) 

This  Directive  should  be  limited  to  payments  made  as  remuneration  for  commercial 
transactions and does ⌦ should ⌫ not regulate 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. 

(cid:208) 2000/35/EC Recital (22) 

(10)  This Directive should regulate all commercial transactions irrespective of whether they 
are  carried  out  between  private  or  public  undertakings  or  between  undertakings  and 
public  authorities,  having  regard  to  the  fact  that  the  latter  handle  a  considerable 
volume  of  payments  to  business.  It  should  therefore  also  regulate  all  commercial 
transactions between main contractors and their suppliers and subcontractors. 

(11)  The fact that the liberal professions are covered by this Directive does not mean that 
Member  States  have  to  treat  them  as  undertakings  or  merchants  for  purposes  not 
covered by this Directive. 

(cid:208) 2000/35/EC Recital (14) 

(cid:208) 2000/35/EC 
(adapted) 
(cid:214) new 

Recital 

(16) 

(12)  Late  payment  constitutes  a  breach  of  contract  which  has  been  made  financially 
attractive  to  debtors  in  most  Member  States  by  low  (cid:214)or  no   interest  rates 
⌦ charged ⌫ on late payments and/or slow procedures for redress. A decisive shift, 
including (cid:214)making the exclusion of the right to charge interest an unfair contractual 
clause  and  providing  for  a   compensation  of  creditors  for  the  costs  incurred,  is 
necessary  to  reverse  this  trend  and  to  ensure  that  the  consequences  of  late  payments 
are such as to discourage late payment. 

(13) 

In the interest of consistency of Community legislation, the definition of "contracting 
authorities" in Directive 2004/18/EC of the European Parliament and of the Council of 

(cid:216) new 

EN 

14 

   EN 

 
 
 
 
 
 
31  March  2004  on  the  coordination  of  procedures  for  the  award  of  public  works 
contracts, public supply contracts and public services contracts17 should apply for the 
purposes of this Directive.  

(14)  Statutory interest due for late payments should be calculated on a daily basis as simple 
interest, in accordance with Regulation (EEC, Euratom) No 1182/71 of the Council of 
3 June 1971 determining the rules applicable to periods, dates and time limits18.  

(cid:208) 2000/35/EC 
(adapted) 
(cid:214) new 

Recital 

(17) 

(15)  (cid:214) A  fair  compensation  of  creditors  for  the  recovery  costs  incurred  through  late 
payment is necessary to ensure that the consequences of late payments are such as to 
discourage  late  payment.  Recovery  costs  should  also  include  the  recovery  of 
administrative costs and compensation for internal costs incurred due to late payment 
for which this Directive should determine the possibility of flat-rate minimum amount 
which  may  be  cumulated  with  interest  for  late  payment  .  The  reasonable 
cCompensation  for  the  recovery  costs  has  to  ⌦ should ⌫  be  considered  without 
prejudice to national provisions according to which a national judge can ⌦ may ⌫ 
award to the creditor any additional damage caused  by ⌦ regarding ⌫ the  debtor's 
late  payment,  taking  also  into  account  that  such  incurred  costs  may  be  already 
compensated for by the interest for late payment. 

(cid:216) new 

(16)  Surveys  show  that  public  authorities  often  require  contractual  payment  periods  for 
commercial transactions that are significantly longer than 30 days. Therefore, payment 
periods for procurement contracts awarded by public authorities should be as a general 
rule limited to a maximum of 30 days. 

(17)  Late  payment  is  particularly  regrettable  if  it  occurs  despite  the  debtor’s  solvency. 
Surveys show that public authorities often pay invoices very late after expiration of the 
applicable  payment  period.  Public  authorities  may  face  lighter  financing  constraints 
because  they  may  benefit  from  more  secure,  predictable  and  continuous  revenue 
streams  than  private  undertakings.  At  the  same  time,  they  depend  less  than  private 
undertakings on building stable commercial relationships for the achievement of their 
aims.  Consequently,  public  authorities  may  have  less  incentive  to  pay  on  time.  In 
addition,  many  public  authorities  can  obtain  financing  at  more  attractive  conditions 
than private undertakings. Therefore, late payment by public authorities not only leads 
to  unjustified  costs  for  private  undertakings,  but  to  inefficiency  in  general.  It  is 
therefore appropriate to introduce correspondingly higher dissuasive compensation in 
case of late payment by public authorities. 

17 
18 

OJ L 134, 30.4.2004, p. 114. 
OJ L 124, 8.6.1971, p. 1. 

EN 

15 

   EN 

 
 
 
                                                 
18)  This  Directive  takes  into  account  the  issue  of  long  contractual  payment  periods  and,  in 
particular,  the  existence  of  certain  categories  of  contracts  where  a  longer  payment 
period in combination with a restriction of freedom of contract or a higher interest rate 
can be justified. 

(cid:208) 2000/35/EC Recital (18) 

(cid:208) 2000/35/EC 
(adapted) 
(cid:214) new 

Recital 

(19) 

(18)  This Directive should prohibit abuse of freedom of contract to the disadvantage of the 
creditor.  Where  an  agreement  mainly  serves  the  purpose  of  procuring  the  debtor 
additional liquidity at the expense of the creditor (cid:214), for example through the exclusion 
of the possibility for the creditor to charge interest for late payment or specifying an 
interest  rate  for  late  payment  which  is  substantially  lower  than  the  statutory  interest 
provided  for  in  this  Directive   ,  or  where  the  main  contractor  imposes  on  his 
suppliers and subcontractors terms of payment which are not justified on the grounds 
of  the  terms  granted  to  himself  ,  these  may  be  considered  to  be  factors  constituting 
such  an  abuse.  This  Directive  does  ⌦ should ⌫  not  affect  national  provisions 
relating  to  the  way  contracts  are  concluded  or  regulating  the  validity  of  contractual 
terms which are unfair to the debtor. 

(19) 

It is desirable to ensure that creditors are in a position to exercise a retention of title on 
a non-discriminatory basis throughout the Community, if the retention of title clause is 
valid under the applicable national provisions designated by private international law. 

(cid:208) 2000/35/EC Recital (21)  

(20)  This  Directive  only  defines  the  term  "enforceable  title"  but  does  not  regulate  the 
various procedures of forced execution of such a title and the conditions under which 
forced execution of such a title can be stopped or suspended. 

(cid:208) 2000/35/EC Recital (15) 

(21)  The consequences of late payment can be dissuasive only if they are accompanied by 
procedures  for  redress  which  are  rapid  and  effective  for  the  creditor.  In  conformity 
with  the  principle  of  non-discrimination  contained  in  Article  12  of  the  Treaty,  those 
procedures should be available to all creditors who are established in the Community. 

(cid:208) 2000/35/EC Recital (20) 

EN 

16 

   EN 

 
 
 
 
 
 
(cid:208) 2000/35/EC 
(adapted) 
(cid:214) new 

Recital 

(23) 

(22)  (cid:214)It  is  necessary  to  ensure  that  the  recovery  procedures  for  unchallenged  claims 
related  to  late  payment  in  commercial  transactions    Article  5  of  this  Directive 
requires  that  the  recovery  procedure  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. 

(cid:216) new 

(23)  The obligation to transpose this Directive into national law should be confined to those 
provisions  which  represent  a  substantive  change  as  compared  with  Directive 
2000/35/EC.  The  obligation  to  transpose  the  provisions  which  are  unchanged  arises 
under that Directive. 

(24)  This  Directive  should  be  without  prejudice  to  the  obligations  of  the  Member  States 
relating  to  the  time-limits  for  transposition  into  national  law  and  application  of 
Directive 2000/35/EC. 

HAVE ADOPTED THIS DIRECTIVE: 

(cid:208) 2000/35/EC 

Article 1 

Scope 

1.  This  Directive  shall  apply  to  all  payments  made  as  remuneration  for  commercial 
transactions. 

(cid:208) 2000/35/EC Art. 6(3) (adapted) 

32. In transposing this Directive, Member States may exclude ⌦ the following ⌫ :  

(a) 

(b) 

(c) 

debts that are subject to insolvency proceedings instituted against the debtor;  

contracts that have been concluded prior to 8 August 2002.; and 

claims for interest of less than EUR 5.  

EN 

17 

   EN 

 
 
 
 
 
(cid:208) 2000/35/EC (adapted) 

Article 2 

Definitions 

For the purposes of this Directive ⌦ , the following definitions shall apply ⌫: 

1.(1) 

"commercial  transactions"  means  transactions  between  undertakings  or  between 
undertakings  and  public  authorities  which  lead  to  the  delivery  of  goods  or  the 
provision of services for remuneration,; 

(cid:208) 2000/35/EC (adapted) 
(cid:214) new 

(2) 

(3) 

"public authority" means any contracting authority or entity , as defined by the Public 
Procurement  Directives  92/50/EEC19,  93/36/EEC20,  93/37/EEC21  and  93/38/EEC22 
⌦ Directive 2004/18/EC ⌫; 

"undertaking"  means  any  organisation  (cid:214),  other  than  a  public  authority,  acting  in 
the  course  of  its  independent  economic  or  professional  activity,  even  where  it  is 
carried on by a single person; 

2.(4) 

"late  payment"  means  exceeding  the  contractual  or  statutory  period  of  payment 
(cid:214) failure  to  pay  within  the  period  of  payment  specified  in  Article  3(2)  or  Article 
5(2)  ; 

(cid:216) new 

(5) 

(6) 

“interest for late payment” means statutory interest or interest negotiated and agreed 
upon between undertakings; 

“statutory interest” means simple interest for late payment at a rate which is the sum 
of the reference rate, plus at least seven percentage points; 

(7) 

“reference rate” means either of the following: 

19 
20 
21 
22 

OJ L 209, 24.7.1992, p. 1. 
OJ L 199, 9.8.1993, p. 1. 
OJ L 199, 9.8.1993, p. 54.  
OJ L 199, 9.8.1993, p. 84. 

EN 

18 

   EN 

 
 
 
 
                                                 
(cid:208) 2000/35/EC 
(cid:214) new 

4.(a)  the "interest rate applied by the European Central Bank to its (cid:214) most recent  
main  refinancing  operations  (cid:214) or  the  marginal  interest  rate  resulting  from 
variable-rate tender procedures for such 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  marginal  interest  rate  which  resulted 
from that tender. This applies both in the case of single-rate and variable-rate 
auctions; 

(cid:208) 2000/35/EC Art. 3(1)(d) second 
sentence (adapted) 

(b)  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. 

3.(8) 

"retention  of  title"  means  the  contractual  agreement  according  to  which  the  seller 
retains title to the goods in question until the price has been paid in full;  

(cid:208) 2000/35/EC  

(cid:208) 2000/35/EC (adapted) 
(cid:214) new 

5.(9) 

"enforceable  title"  means  any  decision,  judgment  or  order  for  payment  issued  by  a 
court  or  other  competent  authority,  (cid:214) including  those  that  are  provisionally 
enforceable,   whether  for  immediate  payment  or  payment  by  instalments,  which 
permits the creditor to have his claim against the debtor collected by means of forced 
execution;  it  shall  include  a  decision,  judgment  or  order  for  payment  that  is 
provisionally enforceable and remains so even if the debtor appeals against it. 

EN 

19 

   EN 

 
 
 
 
 
(cid:208) 2000/35/EC (adapted) 
(cid:214) new 

Article 3 

Interest in case of late payment 

(c)1.  ⌦ Member  States  shall  ensure  that ⌫(cid:214) in  commercial  transactions  between 
undertakings,   the  creditor  shall  be  is  entitled  to  interest  for  late  payment ⌦  without  the 
necessity of a reminder ⌫ to the extent that ⌦ if the following conditions are satisfied: ⌫  

(ia) 

(cid:214) the creditor  he has fulfilled its contractual and legal obligations; and 

(iib)  (cid:214) the creditor  he has not received the amount due on time, unless the debtor is not 

responsible for the delay. 

12.  (cid:214) Where  the  conditions  set  out  in  paragraph  1  are  fulfilled,  Member  States  shall 
ensure that ⌦ the following ⌫:  

(a) 

(b) 

interest  in  accordance  with  point  (d)  (cid:214) for  late  payment   shall  become  payable 
from  the  day  following  the  date  or  the  end  of  the  period  for  payment  fixed  in  the 
contract; 

if  the  date  or  period  for  payment  is  not  fixed  in  the  contract,  interest  (cid:214) for  late 
payment  shall become payable automatically without the necessity of a reminder 
⌦ within any of the following time limits ⌫ : 

(i) 

30  days  following  the  date  of  receipt  by  the  debtor  of  the  invoice  or  an 
equivalent request for payment; or 

(ii) 

if the date of the receipt of the invoice or the equivalent request for payment is 
uncertain, 30 days after the date of receipt of the goods or services; or 

(iii)(ii) 

if the debtor receives the invoice or the equivalent request for payment 
earlier than the goods or the services, 30 days after the receipt of the goods or 
services; or 

(iv)(iii) 

if a procedure of acceptance or verification, by which the conformity of 
the goods or services with the contract 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 ⌦ that ⌫ date. 

(cid:214) 3. Member States shall ensure that the applicable reference rate: 

(a) 

for the first semester of the year concerned shall be the rate in force on 1 January of 
that year; 

EN 

20 

   EN 

 
 
(b) 

for the second semester of the year concerned shall be the rate in force on 1 July of 
that year.  

(cid:208) 2000/35/EC (adapted) 

(d) 

(e) 

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  seven 
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 six months; 

unless  the  debtor  is  not  responsible  for  the  delay,  the  creditor  shall  be  entitled  to 
claim  reasonable  compensation  from  the  debtor  for  all  relevant  recovery  costs 
incurred  through  the  latter's  late  payment.  Such  recovery  costs  shall  respect  the 
principles  of  transparency  and  proportionality  as  regards  the  debt  in  question. 
Member States may, while respecting the principles referred to above, fix maximum 
amounts as regards the recovery costs for different levels of debt. 

2. For certain categories of contracts to be defined by national law, Member States may fix 
the period after which interest becomes payable to a maximum of 60 days provided that they 
either restrain the parties to the contract from exceeding this period or fix a mandatory interest 
rate that substantially exceeds the statutory rate. 

3.  Member  States  shall  provide  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  considered,  it  is  grossly  unfair  to  the  creditor.  In  determining  whether  an  agreement  is 
grossly unfair to the creditor, it will be taken, inter alia, into account whether the debtor has 
any objective reason to deviate from the provisions of paragraphs 1(b) to (d) and 2. If such an 
agreement  is  determined  to  be  grossly  unfair,  the  statutory  terms  will  apply,  unless  the 
national courts determine different conditions which are fair. 

4. 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.  

5.  The  means  referred  to  in  paragraph  4  shall  include  provisions  whereby  organisations 
officially  recognised  as,  or  having  a  legitimate  interest  in,  representing  small  and  medium-
sized enterprises may take action according to the national law concerned before the courts or 
before  competent  administrative  bodies  on  the  grounds  that  contractual  terms  drawn  up  for 
general  use  are  grossly  unfair  within  the  meaning  of  paragraph  3,  so  that  they  can  apply 
appropriate and effective means to prevent the continued use of such terms. 

EN 

21 

   EN 

 
 
(cid:216) new 

Article 4 

Compensation for recovery costs  

1.  Member  States  shall  ensure  that,  when  interest  for  late  payment  becomes  payable  in 
commercial transactions in accordance with Articles 3 and 5 and unless otherwise specified in 
the contract, the creditor is entitled to obtain from the debtor any of the following amounts:  

(a) 

(b) 

(c) 

for a debt of less than EUR 1 000, a fixed sum of EUR 40; 

for a debt of EUR 1 000 or more, but less than EUR 10 000, a fixed sum of EUR 70; 

for a debt of EUR 10 000 or more, a sum equivalent to 1% of the amount for which 
interest for late payment becomes payable. 

2.  Member  States  shall  ensure  that  the  amounts  referred  to  in  paragraph  1  shall  be  payable 
without the necessity of a reminder and as compensation for the creditor's own recovery costs. 

(cid:208) 2000/35/EC 
(adapted) 
(cid:214) new 

Art. 

3(1)(e) 

(e) 3. Uunless the debtor is not responsible for the delay, the creditor shall (cid:214) , in addition to 
the amounts set out in paragraph 1,  be entitled to obtain reasonable compensation from the 
debtor  for  all  relevant  (cid:214) remaining   recovery  costs  incurred  through  the  latter's  late 
payment. Such recovery costs shall respect the principles of transparency and proportionality 
as regards the debt in question. Member States may, while respecting the principles referred 
to above, fix maximum amounts as regards the recovery costs for different levels of debt. 

(cid:216) new 

Article 5 

Payment by public authorities 

1.  Member  States  shall  ensure  that,  in  commercial  transactions  leading  to  the  delivery  of 
goods  or  the  provision  of  services  for  remuneration  to  public  authorities,  the  creditor  is 
entitled,  without  the  necessity  of  a  reminder,  to  interest  for  late  payment  equal  to  statutory 
interest if the following conditions are satisfied:  

(a) 

the creditor has fulfilled its contractual and legal obligations;  

EN 

22 

   EN 

 
 
 
 
(b) 

the  creditor  has  not  received  the  amount  due  on  time,  unless  the  debtor  is  not 
responsible for the delay. 

Where the conditions set out in paragraph 1 are fulfilled, Member States shall ensure 

2. 
the following: 

(a) 

(b) 

interest for late payment shall become payable from the day following the date or the 
end of the period for payment fixed in the contract; 

if the date or period for payment is not fixed in the contract, interest for late payment 
shall become payable automatically within any of the following time limits: 

(i) 

(ii) 

(iii) 

30  days  following  the  date  of  receipt  by  the  debtor  of  the  invoice  or  an 
equivalent request for payment;  

if the debtor receives the invoice or the equivalent request for payment earlier 
than  the  goods  or  the  services,  30  days  after  the  receipt  of  the  goods  or 
services; 

if  a  procedure  of  acceptance  or  verification,  by  which  the  conformity  of  the 
goods  or  services  with  the  contract  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 that date. 

3.  Member  States  shall  ensure  that  the  maximum  duration  of  a  procedure  of  acceptance  or 
verification  referred  to  in  paragraph  2(b)(iii)  shall  not  exceed  30  days,  unless  otherwise 
specified and duly justified in the tender documents and the contract. 

4.  Member  States  shall  ensure  that  the  period  for  payment  fixed  in  the  contract  shall  not 
exceed the time limits provided for in paragraph 2(b), unless it is specifically agreed between 
the debtor and the creditor and is duly justified in the light of particular circumstances such as 
an objective need to schedule payment over a longer period. 

5.  Member  States  shall  ensure  that  when  interest  for  late  payment  becomes  payable,  the 
creditor  is  entitled  to  a  lump  sum  compensation  equal  to  5%  of  the  amount  due.  This 
compensation shall be additional to the interest for late payment. 

6.  Member  States  shall  ensure  that  the  applicable  reference  rate  in  commercial  transactions 
leading  to  the  delivery  of  goods  or  the  provision  of  services  for  remuneration  to  public 
authorities: 

(a) 

(b) 

for the first semester of the year concerned shall be the rate in force on 1 January of 
that year; 

for the second semester of the year concerned shall be the rate in force on 1 July of 
that year.  

EN 

23 

   EN 

 
(cid:208) 2000/35/EC (adapted) 

Article 6 

⌦ Grossly unfair contractual clauses ⌫  

(cid:208) 2000/35/EC  Art.  3(3),  (4)  and 
(5) (adapted) 
(cid:214) new 

31. Member States shall provide that an agreement (cid:214) a clause in a contract  on ⌦ relating 
to ⌫ the date for payment or (cid:214), the rate of interest for late payment or recovery costs  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 (cid:214) either  be enforceable (cid:214) unenforceable  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  considered  it  is  grossly  unfair  to  the  creditor.  In 
determining  whether  (cid:214) a  clause   an  agreement  is  grossly  unfair  to  the  creditor,  ⌦ all 
circumstances  of  the  case  shall  be  considered,  including  good  commercial  practice  and  the 
nature of the product ⌫ (cid:214) or the service.  it will ⌦ Account shall ⌫ (cid:214) also  be taken , 
inter alia, ⌦ of ⌫ into account whether the debtor has any objective reason to deviate from 
the provisions of paragraphs 1(b) to (d) and 2 (cid:214) the statutory rate of interest or from Article 
3(2)(b),  Article  4(1)  or  Article  5(2)(b) .  If  such  an  agreement  is  determined  to  be  grossly 
unfair, the statutory terms will apply, unless the national courts determine different conditions 
which are fair. 

(cid:214) For the purpose of the first subparagraph, a clause which excludes interest for late payment 
shall always be considered as grossly unfair.  

42.  Member  States  shall  ensure  that,  in  the  interests  of  creditors  and  competitors,  adequate 
and  effective  means  exist  to  prevent  the  continued  use  of  terms  (cid:214) clauses   and  practices 
which are grossly unfair to the creditor within the meaning of paragraph 31.  

to 

referred 

53.  The  means 
include  provisions  whereby 
in  paragraph  42  shall 
(cid:214) representative   organisations  officially recognised  as,  or  having  a  legitimate  interest  in, 
representing  small  and  medium-sized  enterprises  may  take  action  according  to  the  national 
law  concerned  before  the  courts  or  before  competent  administrative  bodies  on  the  grounds 
that  contractual  terms  drawn  up  for  general  use  (cid:214) clauses   are  grossly  unfair  within  the 
meaning of paragraph 3, so that they can apply appropriate and effective means to prevent the 
(cid:214) their  continued use of such terms.  

EN 

24 

   EN 

 
 
 
(cid:216) new 

Article 7 

Transparency  

Member States shall ensure full transparency about the rights and obligations stemming from 
this Directive, in particular by publishing the applicable statutory interest rate. 

(cid:208) 2000/35/EC 

Article 48 

Retention of title 

1.  Member  States  shall  provide  in  conformity  with  the  applicable  national  provisions 
designated by private international law that the seller retains title to goods until they are fully 
paid  for  if  a  retention  of  title  clause  has  been  expressly  agreed  between  the  buyer  and  the 
seller before the delivery of the goods.  

2. Member States may adopt or retain provisions dealing with down payments already made 
by the debtor. 

(cid:208) 2000/35/EC (adapted) 
(cid:214) new 

Article 59  

Recovery procedures for unchallenged claims 

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, provided that the debt or aspects of the 
procedure  are  not  disputed.  This  duty  shall  be  carried  out  by  Member  States  in  conformity 
with their respective national legislation, regulations and administrative provisions.  

2. The respective nNational legislation, regulations and administrative provisions shall apply 
the same conditions for all creditors who are established in the European Community. 

3.  The  90  calendar  day  period  referred  to  in  paragraph  1  shall  not  include  the  following 
⌦ When calculating the period referred to in paragraph 1, the following shall not be taken 
into account ⌫: 

EN 

25 

   EN 

 
 
 
 
(a) 

(b) 

periods for service of documents; 

any delays caused by the creditor, such as periods devoted to correcting applications. 

4.  This  Article  shall  be  without  prejudice  to  the  provisions  of  the  Brussels  Convention  on 
jurisdiction and enforcement of judgments in civil and commercial matters23  

(cid:214) 4.  Paragraphs  1,  2  and  3  shall  be  without  prejudice  to  the  provisions  of  Regulation  (EC) 
1986/2006.  

(cid:216) new 

Article 10 

Report 

1.  Member  States  shall  send  a  report  to  the  Commission  on  the  implementation  of  this 
Directive within two years after the date referred to in Article 11(1) and subsequently at three-
year intervals.  

2. Within three years after the date referred to in Article 11(1), the Commission shall submit a 
report  to  the  European  Parliament  and  the  Council  on  the  implementation  of  this  Directive. 
The report shall be accompanied by any appropriate proposals.  

(cid:208) 2000/35/EC (adapted) 

Article 611 

Transposition 

1.  Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative  provisions 
necessary  to  comply  with  this  Directive  before  8  August  2002.  They  shall  forthwith  inform 
the Commission thereof. 

When Member States adopt these measures, they shall contain a reference to this Directive or 
shall  be  accompanied  by  such  reference  on  the  occasion  of  their  official  publication.  The 
methods of making such reference shall be laid down by Member States. 

23 

Consolidated version in OJ C 27, 26.1.1998, p. 3. 

EN 

26 

   EN 

 
 
 
                                                 
(cid:208) . (adapted) 

1.  Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative  provisions 
necessary  to  comply  with  Articles  1  to  7  and  9  by  [last  day  of  the  12th  month  following 
publication of this Directive in the Official Journal of the European Union] at the latest. They 
shall forthwith communicate to the Commission the text of those provisions and a correlation 
table between those provisions and this Directive. 

When Member States adopt those provisions, they shall contain a reference to this Directive 
or be accompanied by such a reference on the occasion of their official publication. They shall 
also  include  a  statement  that  references  in  existing  laws,  regulations  and  administrative 
provisions to the directive repealed by this Directive shall be construed as references to this 
Directive.  Member  States  shall  determine  how  such  reference  is  to  be  made  and  how  that 
statement is to be formulated. 

(cid:208) 2000/35/EC (adapted) 
(cid:214) new 

42. Member States shall communicate to the Commission the text of the main provisions of 
national law which they adopt in the field covered by this Directive. 

23. Member States may maintain or bring into force provisions which are more favourable to 
the creditor than the provisions necessary to comply with this Directive. 

4. In transposing  the Directive, Member  States  may  exclude  contracts (cid:214) concluded  prior to 
the date specified in paragraph 1.  

3. In transposing this Directive, Member States may exclude: 

(a) 

(b) 

(c) 

debts that are subject to insolvency proceedings instituted against the debtor; 

contracts that have been concluded prior to 8 August 2002; and 

claims for interest of less than EUR 5. 

4.  Member  States  shall  communicate  to  the  Commission  the  text  of  the  main  provisions  of 
national law which they adopt in the field covered by this Directive. 

5. The Commission shall undertake two years after 8 August 2002 a review of, inter alia, the 
statutory  rate,  contractual  payment  periods  and  late  payments,  to  assess  the  impact  on 
commercial  transactions  and  the  operation  of  the  legislation  in  practice.  The  results  of  this 
review and of other reviews will be made known to the European Parliament and the Council, 
accompanied where appropriate by proposals for improvement of this Directive. 

EN 

27 

   EN 

 
 
 
(cid:216) new 

Article 12 

Repeal 

Save  as  regards  contracts  concluded  before  [the  date  set  out  in  Article  11(1)]  to  which  this 
Directive  does  not  apply  pursuant  to  Article  11(4),  Directive  2000/35/EC  is  repealed  with 
effect from that date, without prejudice to the obligations of the Member States relating to the 
time-limit for its transposition into national law and its application.  

References  to  the  repealed  Directive  shall  be  construed  as  references  to  this  Directive  and 
shall be read in accordance with the correlation table in the Annex. 

(cid:208) 2000/35/EC 
(cid:214) new 

Article 713 

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 Union. 

(cid:208) 2000/35/EC 

Article 814 

Addressees 

This Directive is addressed to the Member States. 

Done at Brussels, […] 

For the European Parliament 
The President 
[…] 

For the Council 
The President 
[…] 

EN 

28 

   EN 

 
 
 
 
ANNEX  

Correlation table 

Directive 2000/35/EC 

This Directive 

Article 1 

Article 2(1) first subparagraph 

Article 1(1) 

Article 2(1) 

Article 2(1) second subparagraph 

Article 2(2) 

Article 2(1) third subparagraph 

Article 2(2) 

- 

- 

- 

Article 2(3) 

Article 2(4) 

Article 2(5) 

Article 3(1)(a) 

Article 2(3) 

Article 2(4) 

Article 2(5) 

Article 2(6) 

Article 2(7), introductory words 

Article 2(8) 

Article 2(7)(a) 

Article 2(9) 

Article 3(2)(a) 

Article 3(1)(b), introductory words 

Article 3(2)(b) 

Article 3(1)(b)(i) 

Article 3(1)(b)(ii) 

Article 3(1)(b)(iii) 

Article 3(1)(b)(iv) 

Article 3(1)(c) 

Article 3(2)(b)(i) 

- 

Article 3(2)(b)(ii) 

Article 3(2)(b)(iii) 

Article 3(1) 

Article 3(1)(d), first and third sentences 

- 

Article 3(1)(d), second sentence 

Article 2(7)(b) 

- 

- 

Article 3(1)(e) 

EN 

Article 4(1) 

Article 4(2) 

Article 4(3) 

29 

   EN 

 
Article 3(2) 

- 

- 

Article 5 

Article 3(3), first and second sentences 

Article 6(1), first subparagraph  

Article 3(3), third sentence 

- 

- 

Article 3(4) 

Article 3(5) 

- 

Article 4 

Article 6(1), second subparagraph  

Article 6(2) 

Article 6(3) 

Article 7 

Article 8 

Article 5(1), (2) and (3) 

Article 9(1), (2) and (3) 

Article 5(4)  

- 

- 

Article 6(1)  

- 

Article 6(2) 

Article 6(3) 

Article 6(4) 

Article 6(5) 

- 

- 

Article 7 

Article 8 

- 

- 

Article 5(4) 

Article 10 

- 

Article 11(1) 

Article 11(3) 

Article 1(2) 

Article 11(2) 

- 

Article 11(4) 

Article 12 

Article 13 

Article 14 

Annex 

EN 

30 

   EN 

 
LEGISLATIVE FINANCIAL STATEMENT 

1. 

NAME OF THE PROPOSAL 

Proposal for a Directive of the European Parliament and of the Council on combating 
late payment in commercial transactions (recast). 

2. 

ABM / ABB FRAMEWORK 

Title 02 – Enterprise – Chapter 02 03 Internal market for goods and sectoral policies.  

3. 

BUDGET LINES 

3.1. 

Budget  lines  (operational  lines  and  related  technical  and  administrative 
assistance lines (ex- B..A lines)) including headings: 

02.0301 

3.2. 

Duration of the action and of the financial impact: 

Considering that the action is a legislative proposal, its duration is undetermined.  

3.3. 

Budgetary characteristics: 

Budget 
line 

Type of expenditure 

New 

EFTA 
contribution 

Contributions 
from applicant 
countries 

Heading in 
financial 
perspective 

02.0301 

Non-comp 

Diff24 

 NO 

YES 

NO 

 1a 

24 

Differentiated appropriations 

EN 

31 

   EN 

 
                                                 
4. 

SUMMARY OF RESOURCES 

4.1. 

Financial Resources  

4.1.1. 

Summary of commitment appropriations (CA) and payment appropriations (PA) 

EUR million (to 3 decimal places) 

Expenditure type 

Section 
no. 

2010 

2011 

2012 

2013 

2014 

2015 
and 
later 

Total 

Operational expenditure25 

Commitment Appropriations 
(CA) 

8.1. 

Payment 
(PA) 

Appropriations 

0 

0 

a 

b 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

Administrative expenditure within reference amount26 

Technical  &  administrative 
assistance (NDA) 

8.2.4. 

c 

TOTAL REFERENCE AMOUNT 

0 

0 

0 

0 

0.3 

0 

0.3 

Commitment 
Appropriations 

Payment Appropriations 

0 

a+c

b+c

0 

0 

0 

0 

0 

0 

0 

0.3 

0.3 

0 

0 

0.3 

0.3 

Administrative expenditure not included in reference amount27 

Human 
associated 
(NDA) 

resources 

and 
expenditure 

Administrative  costs,  other 
than  human  resources  and 
not 
associated 
included 
reference 
in 
amount (NDA) 

costs, 

8.2.5. 

d 

8.2.6. 

e 

0.244  0.244 

0.244 

0.244 

0.244 

0.244 

1.464 

0.1 

0.1 

0.1 

0.1 

0.1 

0.1 

0.6 

Total indicative financial cost of intervention 

TOTAL CA including cost 
of Human Resources 

TOTAL  PA  including  cost 
of Human Resources 

a+c
+d
+e 

b+c
+d
+e 

0.344  0.344 

0.344 

0.344 

0.644 

0.344 

2.364 

0.344  0.344 

0.344 

0.344 

0.644 

0.344 

2.364 

25 
26 
27 

Expenditure that does not fall under Chapter xx 01 of the Title xx concerned. 
Expenditure within article xx 01 04 of Title xx. 
Expenditure within chapter xx 01 other than articles xx 01 04 or xx 01 05. 

EN 

32 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
4.1.2.  Compatibility with Financial Programming 

The proposal is compatible with existing financial programming. 

4.1.3.  Financial impact on Revenue 

The proposal has no financial implications on revenue. 

4.2. 

Human Resources FTE (including officials, temporary and external staff) – see 
detail under point 8.2.1.  

Annual requirements 

2010 

2011 

2012 

2013 

2014 

2015 
and later

Total 
number 
human resources 

of 

2 

2 

2 

2 

2 

2 

5. 

CHARACTERISTICS AND OBJECTIVES 

5.1. 

Need to be met in the short or long term 

See the Explanatory Memorandum. 

5.2. 

Value-added  of  Community  involvement  and  coherence  of  the  proposal  with 
other financial instruments and possible synergy 

See the Explanatory Memorandum. 

5.3. 

Objectives, expected results and related indicators of the proposal in the context 
of the ABM framework 

See the Explanatory Memorandum. 

5.4.  Method of Implementation (indicative) 

Centralised Management: directly by the Commission. 

6. 

MONITORING AND EVALUATION 

The  organisation  of  a  reliable  monitoring  and  evaluation  scheme  is  complicated  by 
the principle that the rules laid down in this proposal do not have a compulsory effect 
on  businesses,  i.e.  businesses  will  not  be  obliged  to  apply  these  rules  and  to  claim 
their rights. In addition, evidence suggests that a negative economic cycle is likely to 
negatively influence timely payment as it affects companies’ cash flows and funding 
opportunities.  During  a  period  of  economic  growth,  enterprises  benefit  from  better 
cash inflow which, at least partly, can be used for paying more promptly.  

The monitoring system consists of 2 pillars: 

•  Transparency: the proposal obliges the Member States to ensure full transparency 

about the rights and obligations stemming from this Directive. 

EN 

33 

   EN 

 
•  Reporting:  the  proposal  obliges  Member  States  to  send  a  report  to  the 
Commission on their implementation of the Directive at three-year intervals. The 
Commission  shall  gather  this  information  and  then  draft  a  report  on  the 
implementation of this Directive. This report will probably be drafted, inter alia, 
by reference to the information and data set out in annexes 1, 2 and 3 (partly) of 
the  Impact  Assessment  which  will  be  used  as  complementary  indicators  for  the 
achievement  of  the  objectives.  The  organisation  of  new,  similar  surveys  will 
enable  the  Commission  to  compare  the  behaviour  of  creditors  before  and  after 
implementation of the Directive. 

7. 

ANTI-FRAUD MEASURES  

Not applicable. 

8. 

DETAILS OF RESOURCES 

8.1. 

Objectives of the proposal in terms of their financial cost 

Not applicable.  

8.2. 

Administrative Expenditure 

8.2.1.  Number and type of human resources 

Types of post 

Staff to be assigned to management of the action using existing and/or 
additional resources (number of posts/FTEs) 

2010 

2011 

2012 

2013 

2014 

2015 

Officials or 
temporary 
staff28 (XX 01 
01) 

A*/AD 

B*, 
C*/AST 

Staff  financed29  by  art. 
XX 01 02 

Other  staff30  financed by 
art. XX 01 04/05 

TOTAL 

1 

1 

0 

0 

2 

1 

1 

0 

0 

2 

1 

1 

0 

0 

2 

1 

1 

0 

0 

2 

1 

1 

0 

0 

2 

1 

1 

0 

0 

2 

8.2.2.  Description of tasks deriving from the action 

The  tasks  consist  of  the  administrative  management  of  the  Directive,  including  the 
handling  of  complaints  and  infringements,  the  implementation  of  the  transparency 
measures and the preparation and drafting of the report referred to under point 6. 

28 
29 
30 

Cost of which is NOT covered by the reference amount 
Cost of which is NOT covered by the reference amount 
Cost of which is included within the reference amount 

EN 

34 

   EN 

 
 
 
 
                                                 
8.2.3. 

Sources of human resources (statutory) 

Posts to be redeployed using existing resources within the managing service (internal 
redeployment) 

8.2.4.  Other  Administrative  expenditure  included  in  the  reference  amount  (XX  01  04/05  – 

Expenditure on administrative management) 

Budget line 

(number and heading) 

2010 

2011 

2012 

2013 

2014 

2015 
and 
later 

TOTAL 

EUR million (to 3 decimal places) 

Technical 

1 
and 
assistance (including related staff costs) 

administrative 

Executive agencies31 

0 

0 

0 

0 

0 

0 

0 

Other 

technical 

and 

administrative 

assistance 

- intra muros  

- extra muros 

Total  Technical  and  administrative 
assistance 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0.3 

0.3 

0 

0 

0 

0 

0 

0 

8.2.5.  Financial cost of human resources and associated costs not included in the reference 

amount 

Type of human resources 

2010 

2011 

2012 

2013 

2014 

2015 and 
later 

EUR million (to 3 decimal places) 

Officials  and  temporary  staff 
(XX 01 01) 

Staff  financed  by  Art  XX  01 
02  (auxiliary,  END,  contract 
staff, etc.) 

(specify budget line) 

0.244 

0.244 

0.244 

0.244 

0.244 

0.244 

0 

0 

0 

0 

0 

0 

cost 

of  Human 
Total 
Resources  and  associated 
costs 
in  reference 
amount) 

(NOT 

0.244 

0.244 

0.244 

0.244 

0.244 

0.244 

31 

Reference should be made to the specific legislative financial statement for the Executive Agency(ies) 
concerned. 

EN 

35 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
8.2.6. Other administrative expenditure not included in the reference amount 

EUR million (to 3 decimal places)

2010 

2011 

2012 

2013 

2014 

2015 
and 
later 

TOTAL 

XX 01 02 11 01 – Missions 

0.05 

0.05 

0.05 

0.05 

0.05 

0.05 

XX 01 02 11 02 – Meetings & Conferences 

0.05 

0.05 

0.05 

0.05 

0.05 

0.05 

XX 01 02 11 03 – Committees  

XX 01 02 11 04 – Studies & consultations 

XX 01 02 11 05 - Information systems 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0.3 

0.3 

0 

0 

0 

2 

Total 

Other  Management 

0.1 

0.1 

0.1 

0.1 

0.1 

0.1 

0.6 

Expenditure (XX 01 02 11) 

3  Other 

expenditure 

administrative 
including reference to budget line) 

nature 

of 

an 
(specify 

expenditure, 
than  human  resources  and 
in 

Total  Administrative 
other 
associated  costs  (NOT 
reference amount) 

included 

0 

0 

0 

0 

0 

0 

0 

0.1 

0.1 

0.1 

0.1 

0.1 

0.1 

0.6 

EN 

36 

   EN