The second revision of the Directive combating late payments in commercial transactions is under way
The European Commission is paving the way
On 14 September 2022, in her State of the Union, Ursula Von der Leyen announced the revision of Directive 2011/7 combating late payments in commercial transactions (the “Directive” or the “late payment Directive”). The purpose of the European Commission’s President was to reinforce the Directive's protection mechanism for creditors and to promote a decisive shift to a culture of prompt payment.
The second revision of the Directive is now under way, as a Call for evidence was launched by the European Commission on 12 January 2023 and will end in March 2023.
This is the second time the Commission has felt the need to strengthen rules related to late payments. It already happened in 2011, with the recast of the Directive 2000/35 combating late payments. The aim of the European Union legislator is the same today as it was 23 years ago: to protect creditors (especially small operators) from debtors that do not pay their invoices on time and thereby putting the financial strength and competitiveness of their co-contractors to the test. However, despite the efforts of the European Parliament, one in four bankruptcies in the European Union is still caused by late payments.
The European Commission acknowledges that there are several flaws that need to be addressed for an effective protection mechanism to be in place for creditors facing reluctant debtors.
