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Corporate: Draft Directive on late payments in the EU.

United Kingdom
26/04/1999
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At their meeting in November EU Industry Ministers were caught up in a heated argument over the draft directive on late payments. The principle stumbling blocks revolved around contracts with the public sector, the harmonisation of procedures and the ownership of the reserve clause.

The Economic and Social Committee examined the Commission’s proposals, approving the draft as regards public procurement. It emphasised that the proposal should be strengthened as far as inter-enterprise relations are concerned so as to really attack the root causes of delays and excessively long payment periods. The Directive should also require the most exposed Member States to strengthen national legislation against abnormally long payment periods, recommend transparency in contracts, and make it easier for SMEs to transfer the right of interest to third parties.

The Committee also proposed an extra clause requiring a review of the Directive within three years, and the setting up of an Advisory Committee open to interested parties which would co-operate with the Committee’s support.

The meeting in November however illustrated that several issues still have to be resolved. Particular concerns were raised over the Commission’s plans on whether or not the public sector would be subject to the directive, the procedure for recovery of undisputed debts and the law regarding transfer of ownership.

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