It now seems very likely that a new policy be approved on late payment of commercial debts soon. He has already given the green light by the European Parliament.

As a new policy, it will replace the current late payments in 2000 and aimed at a “decisive shift to a culture of prompt payment” offer within the European Union.

His main goal is to increase confidence and provide greater protection of creditors who are hard because bitten out there on the market for products and services and not on time, and many are even not at all, because the paid proliferation of bankruptcy, liquidation , receivership and insolvency examinership.

The new draft European Directive on the reversal of the trend of delayed payment to punish the debtor, that behind their payments, as it represents the interest and penalties for those who do not want to keep it. Make debtor under a strict obligation to pay on time, safely, this new law allows creditors or suppliers will charge interest without additional paperwork or other written communication.

Companies or individuals who pay their debts late is liable to a fixed fee and also responsible for the costs of collecting the debt. The Directive sets a minimum limit? 40, but this can be increased depending on the size of the debt.

But not all known government agencies in Ireland have to pay their debts on time and this new policy recognizes the role of state institutions in a much stronger position in commercial contracts and are therefore in transactions where the debtor is a public entity, then the payment period does not exceed 30 days unless it is expressly agreed in writing, and then the time may be extended to a maximum of 60 days.

DELAY Regulations 2000

This is a Europe-wide regulation, the 7th in force August 2002 came with the fight late payments in commercial transactions. It is intended to promote a better culture of prompt payment of invoices. The law is that where regulation of the European Communities (Late payments in commercial transactions), 2002.

These regulations provided that interest payable in commercial transactions, if the payment is not received within 30 days unless an alternative payment method is the period specified in a contract agreed.

The interest rate charged for late payment is the main race of the ECB refinancing relevant on 1 January or 1 July each year Currently more than 7 percent 1:00%, unless otherwise agreed.

BACKGROUND

The timely payment of Accounts Act 1997 was introduced following a report of the Task Force on Small Business, which adopted this legislation to a prompt payment by public sector organizations, to ensure legal recommends 1997 requires that public sector organizations to their to pay bills on time or they are for their clients for penalty interest. Therefore, this law greatly improved payment terms in the public sector. However, these new regulations developed in 2002 to promote a better culture of prompt payment between companies in Ireland.

While the statistics are a little dated, there are significant differences between the EU Member States with regard to payment terms and if the payment is actually made. They range on average from a minimum of 27 days to a maximum of 94 days or more. The average is 53 and in Ireland, it is just below minus 51st These figures are averages, and it is believed that they were not much changed.

As regulations WORK

The regulation will apply to business transactions in both public and private sectors. However, there are some exceptions. They are:

• The debt, the subject of other laws such as the liquidation procedures are followed by an insolvency
• Applications of interest is low? 5
• Transactions with consumers, retail

The contracts have before 8th Been agreed in August 2002

Payment deadline

The regulations, if the interest rate charged for late payments. A payment is considered late when 30 days have passed, unless an alternative method of payment arrangement in a contract agreed between the parties is given. The 30-day period begins with the required payment:

a) the date of receipt by the buyer an invoice for the payment or

b) The date of receipt of goods or services;

1) The days of receipt of the bill is uncertain or

2) The buyer receives the invoice for the goods or services.

Completed in cases in which have been agreed by the parties to a process for the adoption or review of the product, it starts after this process is.

The interest is to continue to pay until the debt without a written warning or admonition is paid

INTEREST RATES

The race will be the interest rate the European Central Bank base rate plus 7 percentage points. The Parties may agree on an interest rate alternatives. The stance of the ECB takes effect on 1 January and 1 July, for the following six months of each year. A single rate applies to any late payment, the race is at the time of payment.

The EU Directive

The Commission proposed a directive, March 1998. The economic rationale for the proposal from the Commission is the fact that a delay of four insolvencies is due to payments. This leads to the loss of 450,000 jobs per year and added that the high unemployment in Europe. Moreover, debt is worth? 23.6 billion are lost every year through insolvencies caused by late payment.

2010, when the new policy into effect?

While the new EU directive is welcome, anything to pay to the debtor can pay their debts on time to help focus, these companies expect, but it seems that while the new law is expected to be adopted in the coming weeks are the 27 Member States until early 2013, states must implement the provisions into national law. We need this new law by 2013 is too late!

About the author:
Brian Walker is an Irish bar in the Law Library with over 35 years experience in the field of commercial law and society and a facilitator of success with a depth of experience in business and commercial disputes.

He is head of CPD seminars, one of the most established members of the training in Ireland in the mediation.