Impact of the Late Payments Directive

Subject: Impact of the Late Payments Directive

In the REFIT evaluation of the Late Payments Directive, which was published in August 2016, the Commission found that the business-to-business (B2B) element of the directive was failing to prevent late payments, especially when it comes to SMEs. The data showed that the impact of the directive had been minimal, with the average length of the payment period dropping by only 1.2 days in the years following its adoption.

Following the reply given to Question E-007907/2017, can the Commission provide information on whether it will continue monitoring the prevalence of late payments as regards SMEs following the evaluation of the Late Payments Directive? Furthermore, if the failure to prevent late payments is again confirmed, will the Commission consider putting forward initiatives to improve the current Late Payments Directive so as to better reflect the needs of SMEs?

Answer given by Ms Bieńkowska on behalf of the Commission

(4 July 2018)

The Commission attaches great importance to protecting small and medium-sized enterprises (SMEs) from the potentially harmful effects of delayed payments. A close monitoring is continuously performed to ensure a correct application of the Late Payment Directive (1) in all Member States.

This strict enforcement policy, in combination with efforts made at national level, have led to consistent reductions in average payment periods since 2013 both in contracts with public authorities and between businesses.

In its Report (2) on the implementation of the directive adopted in August 2016, the Commission concluded that the directive is overall fit for purpose and therefore no amendments are needed at this time.

Nevertheless, the Commission remains attentive to the objective of maximising the positive impacts of the directive, especially for SMEs. In this light, the Commission launched a study in 2017 to assess the effectiveness of voluntary and regulatory measures to foster prompt payment in commercial transactions between businesses.

The results, expected in July 2018, will provide Member States with practical and focused information on the effectiveness of different policy options to improve the prompt payment culture in business-to-business transactions in the EU.

⋅1∙ http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32011L0007

⋅2∙ COM (2016) 534 http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM%3A2016%3A534%3AFIN