The Directive that obliges public authorities to pay for goods and services within 30 calendar days or, in very exceptional circumstances, within 60 days, has to be integrated into member states national law by 16th March 2013. In particular, the Directive intends to end late payments.

The European Commission reminded in a statement that to end late payments the European Union adopted Directive 2011/7/EU on combating late payment in commercial transactions, and it must be integrated into member states national law by 16th March 2013. In October 2012, the Commission called on member states to speedy incorporation of the Late Payment Directive into national law. According to European Commission Vice President Antonio Tajani, Commissioner for Industry and Entrepreneurship, SMEs find it particularly difficult to stand up for their right to prompt payment.

The Directive implies, among other things, that public authorities must pay for the goods and services that they procure within 30 calendar days or, in very exceptional circumstances, within 60 calendar days. Moreover, enterprises should pay their invoices within 60 calendar days, unless they expressly agree otherwise and if it is not grossly unfair to the creditor.

In addition, with the new rules, enterprises are automatically entitled to claim interest for late payments and can also automatically obtain a minimum fixed amount of €40 as a compensation for payment recovery costs. The rules also set up that the statutory interest rate for late payment is increased to at least 8 percentage points above the European Central Bank’s reference rate. Moreover, enterprises can challenge grossly unfair terms and practices more easily before national courts. The rules also implies that member states must publish the interest rates for late payment so that all parties involved are informed.