Revision of the late payments Directive

EESC Opinion on the Proposal for a Regulation of the European Parliament and of the Council on combating late payment in commercial transactions, [COM(2023) 533 final - 2023/0323 (COD)] 

Key points:

The EESC:

• welcomes the Commission's Communication on the SME Relief Package and the Commission's intention to further combat late payments. At the same time, the Committee is concerned that the transformation of the current Directive into a Regulation might limit the flexibility of Member States and of the business environment at a time of multiple headwinds across the EU.
• considers that late payments are detrimental to small business owners, their families and their employees with serious consequences on payments of utilities, rent and loans, as well as their morale and productivity.
• believes that the Commission, with its proposal, is attempting to tackle the issue of long payments instead of late payments by introducing excessively restrictive measures, instead of improving the current enforcement framework with more effective rules.
• underlines the importance of flexible negotiations when setting payment terms and highlights strong concerns over the Commission proposal. In effect, the proposed 30-day cap eliminates contractual freedom between companies.
• welcomes the proposed payment term set at 30 days for G2B transactions. Public authorities should lead by example as they represent an essential partner for businesses.
• sees the potential benefit of introducing national enforcement bodies. However, it stresses that such authorities will have to operate objectively and guarantee maximum confidentiality when treating the commercially sensitive information of both undertakings and public authorities, without imposing further obligations on reporting.
•  believes that strict conditions on payment terms could potentially have an impact on commercial transactions within the single market and push business operations outside the EU. It would be easier to engage with suppliers from third countries which are allowed to accept longer payment terms. This could be a potential threat, to Europe's competitiveness and should be avoided.

For more information please contact the INT Section Secretariat