Changes from plenary report to adopted text

RemovedEXPLANATORY STATEMENT

Added(b) the debtor has received the invoice or equivalent request for payment;

RemovedThe Rapporteur recognized the alarming need for an updated legislative approach to late payments, particularly concerning small and medium-sized enterprises (SMEs) and micro-undertakings. The conversion from a directive to a Late Payment Regulation is critical for safeguarding the economic dynamism of SMEs and, by extension, the European Single Market. This reform is integral to creating a European landscape where SMEs can prosper unaffected by financial unpredictability, and it embodies the vision of a flourishing, innovative, and competitive European economy.

Added(c) the creditor has not received the amount due specified in the invoice or the equivalent request for payment, within the contractual or statutory payment period as set out in Article 3.

RemovedThe draft report highlights the crucial role of SMEs as the bedrock of Europe's economy, emphasizing the importance of a regulatory framework that enforces timely payments to avert cash flow disruptions. There is a widespread call across the Single Market for a cultural shift towards prompt payment practices and removing the stigma associated with collecting debts. This shift is vital for upholding the integrity of financial transactions and the operational viability of SMEs, which is why standardized payment terms, like the 30-day term advocated by the European Commission, are being seriously considered to establish consistency in payment practices.

Added3. It shall not be possible for the creditor to waive its right to obtain interest for late payment when the debtor is a public authority or a large undertaking. [Am. 47]

RemovedIn addressing the power imbalance in commercial relationships that often leads to unfair payment terms for SMEs, the proposed legislation aims to clear up ambiguities and legal gaps. While interventions in the payment process are minimal, the necessity of future policy measures, such as automated payment systems and education about the impacts of late payments, is acknowledged. The objective is to prevent late payment practices and to uphold respect for contractual obligations, ensuring that SMEs can compete fairly and maintain financial stability. To this end, the legislation calls for ongoing impact assessments and enforcement measures to monitor and address late payment issues across businesses of all sizes.

Added4. The date of receipt of the invoice, or equivalent request for payment, shall not be subject to a contractual agreement between the debtor and the creditor.

RemovedThe Rapporteur considered it imperative to introduce new provisions requiring large undertakings to adhere to reporting obligations concerning payment practices. These measures are set to create a more transparent business environment, which will enable more effective monitoring and enforcement of timely payment regulations. Such transparency is expected to facilitate smoother commercial operations and ensure that large entities are held accountable, thus fostering a culture of reliability and trust in the payment ecosystem. This strategic action aligns with IMCO's aim to protect and empower SMEs by providing them with a clear visibility of larger corporations' payment behaviors.

Added5. The debtor shall provide all relevant information to the creditor to ensure that the creditor’s invoice or equivalent request for payment is accepted and processed by the debtor as soon as it is received.

RemovedIn alignment with our commitment to a seamless and equitable transition towards the Late Payment Regulation, it is acknowledged that a strategic deferral in applying this new framework is necessary. This deferral is designed to afford all pertinent parties the requisite period to establish and fine-tune the systems essential for adhering to the Regulation. Recognizing the acute cash flow challenges faced by micro-undertakings, it is prudent to extend the grace period for these entities by an additional twelve months when they find themselves in the debtor's position. This thoughtful approach underscores the Rapporteur's commitment to a balanced and considerate implementation of the Regulation, which judiciously safeguards all market participants' interests, particularly the most vulnerable.

Added6. Where the conditions set out in paragraph 2 are satisfied, interest for late payment shall start accruing from the last one of theday following events:the expiry of contractual or statutory payment period and in accordance with Article 3.

RemovedIn pursuing a robust and uniform application of the Late Payment Regulation, the Rapporteur calls for the Member States to establish independent enforcement authorities. These bodies must operate objectively and impartially, guaranteeing a fair and equal approach to private enterprises and public authorities. The Rapporteur considers these authorities pivotal in upholding the Regulation's integrity. Furthermore, regularly publishing their decisions is vital to maintaining transparency and accountability. At the same time, the European Commission's role in overseeing the effective execution of these responsibilities by the enforcement authorities is required, ensuring that the Regulation's objectives are achieved and that compliance is not just an aspiration, but an enforced standard across the Union.

Added(a) receipt by the debtor of the invoice or an equivalent request for payment;

RemovedIn an environment where the equilibrium of contractual power is essential, the Rapporteur sees the Late Payment Regulation unequivocally addresses the abuse of contractual freedom to the detriment of creditors. Clauses within contracts or related practices that distort the timelines or terms of payments, interest rates on late payments, or compensation for recovery costs are deemed null and void if not aligned with the Regulation's standards. Such provisions fortify the creditor's position, ensuring fair play in commercial transactions. Furthermore, the Regulation prohibits manipulating contractual freedom to the disadvantage of creditors, safeguarding their rights. This includes the unobstructed right of creditors to assign credit to third parties or to use executive orders issued by courts, which should not be hindered or limited by debtors. This provision ensures that the integrity of contractual agreements is maintained and the financial health of creditors is protected from exploitative practices.

Added(b) receipt by the debtor of the goods or services. [Am. 48]

RemovedIn conclusion, this legislative shift is a cornerstone to reinforce the economic environment of the European Single Market by fostering conditions where SMEs and micro-undertakings can flourish free from the unpredictability of delayed financial remuneration. The report's foresight in advocating for transparent reporting obligations, a deferral period accommodating all market participants, and establishing independent enforcement authorities speak to a deep understanding of the complexities of achieving a balanced, fair, and competitive marketplace. The Rapporteur's vision underlines a relentless commitment to safeguarding the dynamism of SMEs, ensuring that the European economy's backbone remains strong and that the principles of fairness and timely financial conduct become hallmarks of the Single Market.

Added7. The interest for late payment shall accrue until the creditor receives payment of the amount due. [Am. 49]

AddedArticle 6 Rate of the interest for late payment

Added1. The interest for late payment shall be equal to the reference rate plus 8 percentage points.

Added2. Member States whose currency is the euro, shall ensure that the reference rate corresponds to either of the following:

Added(a) the interest rate applied by the European Central Bank to its main refinancing operations;

Added(b) the marginal interest rate resulting from variable-rate tender procedures for the most recent main refinancing operations of the European Central Bank.

Added3. In Member States whose currency is not the euro the reference rate shall be the rate set by its national central bank.

Added4. The reference rate for the first semester of the year concerned shall be the rate as determinable on 1 January of that year. The reference rate for the second semester of the year concerned shall be the rate as determinable on 1 July of that year.

AddedArticle 7 Payment schedules

AddedWhere payment is done on the basis of schedules providing for instalments, and any of the instalments is not paid by the agreed date, interest for late payment referred to in Article 5, shall be calculated on the basis of any overdue amount. Compensation shall also be paid in accordance with Article 8.

AddedArticle 8 Compensation for recovery costs

Added1. Where interest for late payment becomes payable in accordance with Article 5, aflat fee compensation for recovery costs shall be automatically due by the debtor to the creditor and shall amount to a fixed sum of EUR 50, per every single commercial transaction of a value between 0 and EUR 1 500, EUR 100 per every single commercial transaction of a value between 1 501 and EUR 15 000, and EUR 150 per every single commercial transaction above 15 000 EUR. [Am. 50]

Added2. The flat fee compensation referred to in paragraph 1 shall be payable by the debtor to the creditor as a compensation for the creditor’s own recovery costs, without the necessity of a reminder. [Am. 51]

Added3. It shall not be possible for the creditor to waive its right to obtain the flat fee compensation laid down in paragraph 1, when the debtor is a public authority or a large undertaking. [Am. 52]

Added4. In addition to the flat fee compensation referred to in paragraph 1, the creditor shall be entitled to obtain reasonable compensation from the debtor for any recovery costs exceeding that flat fee compensation and incurred due to the debtor’s late payment.

Added5. This Article shall apply without prejudice to the creditor’s rights to receive any other compensation.

AddedArticle 9 Null and voidProhibition of certain contractual terms and practices [Am. 53]

Added1. The following contractual terms and practices shall be null and void, and in any case shall be prohibited: [Am. 54]

Added(a) setting the payment period in breach of Article 3;

Added(b) excluding or limiting the right of the creditor to obtain interest for late payment provided for in Article 5 or the right to obtain compensation for recovery costs provided for in Article 8;

Added(ba) excluding or limiting the right of the creditor to:

Added(i) make assignments of the credit to third parties for the purpose of accessing financing services;

Added(ii) make use of an executive order of payments issued by a court; [Am. 55]

Added(c) extending the duration of the procedure of verification or acceptance beyond the term set in Article 3(3);

Added(d) intentionally delaying or preventing or postponing the moment of sending the invoice. by the debtor; [Am. 56]

Added(da) prohibiting, excluding or limiting the assignment of receivables to relevant financial institution; [Am. 57]

Added(db) using means of payment altering payment terms. [Am. 58]

Added2. Member States shall ensure that adequate and effective means exist to end the contractual terms and practices referred to in paragraph 1.

Added3. The means referred to in paragraph 2 shall include the possibility for an organisation officially recognised as representing creditors or organisations with a legitimate interest in representing undertakings to take action before the courts or before competent administrative bodies.

AddedArticle 10 Retention of title

AddedA creditor shall retain title to goods until they are fully paid for if a retention of title has been expressly agreed between the debtor and the creditor before the delivery of the goods.

AddedArticle 11 Transparency and awareness raising [Am. 59]

Added1. Member States shall ensure transparency regarding the rights and obligations laid down in this Regulation, including by making publicly available the applicable rate of interest for late payment.

Added2. The Commission shall make publicly available on the internet the current rates of interest for late payment which apply in the Member States.

Added2a. Member States shall, where appropriate, use professional publications, promotion campaigns or any other functional means to increase awareness of the remedies for late payment among undertakings. [Am. 60]

AddedArticle 12 Recovery procedures for unchallenged claims

Added1. Creditors shall obtain an enforceable title, including through an expedited procedure and irrespective of the amount of debt, within 9060 calendar days of the lodging of the action or application at the court or other competent authority, provided that the debt and the procedure are not disputed. [Am. 61]

Added2. When calculating the period referred to in paragraph 1, the following period shall not be taken into account:

Added(a) periods for service of documents;

Added(b) any delays caused by the creditor.

Added3. This Article shall be without prejudice to the provisions of Regulation (EC) No 1896/2006 and Regulation (EC) No 861/2007. [Am. 62]

AddedArticle 13 Enforcement authorities

Added1. Each Member State shall designate one or more authorities responsible for the enforcement of this Regulation (‘enforcement authority’) and notify them to the Commission without undue delay. Member States shall provide the authorities with appropriate human, technical and financial resources to carry out its tasks and use its powers efficiently. [Am. 63]