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While the proposal from IMCO for adjustments to the Regulation aimed at Combating Late Payment offered some valuable recommendations, members of SMEunited expressed concerns that these might not be adequate to achieve equity in commercial dealings.
SMEunited’s principal request in the revision of the existing Directive is to address the vague term ‘grossly unfair’. As the alternative compromise amendments by the EPP still include this term, the organisation is not in favour of these changes.
SMEunited has advocated for a standard payment duration in B2B transactions to be set at 30 days to promote equitable payment conditions and maintain working capital for SMEs. This limit could be extended up to 60 days through negotiation, considering the verification process and sector-specific exceptions.
However, the IMCO compromise allows for payment periods to be negotiated up to 60 days, with ambiguous regulations regarding an extra 30-day verification process. This ambiguity might lead to payment durations extending to 90 days, exacerbating conditions in various nations and failing to shield European SMEs from the misuse of market dominance.
Effective enforcement is crucial for altering payment practices within the EU. To reduce the obstacles and apprehension SMEs encounter in pursuing legal action, public bodies, established in accordance with local conditions, should play a role in addressing late payments.
SMEunited highlights that payments to subcontractors hinge on the initial disbursement from the authorities. It is the responsibility of public bodies and principal contractors to ensure that payments are relayed through the supply chain to subcontractors promptly.
