Late payment: Commission refers Italy to Court of Justice for failing to ensure suppliers are paid on time

According to the Late Payment Directive, public authorities have to pay for the goods and services they procure within 30 days or, in very exceptional circumstances, within 60 days of receiving the bill.

The Commission attaches great importance to addressing the issue of delayed payment by public authorities, which has also been identified in several Member States, and pursues a strict enforcement policy of the Late Payment Directive. Timely payments are particularly important for small- and medium-sized enterprises (SMEs), which count on a positive cash-flow to ensure their financial management, competitiveness and in many cases, their survival.

The Commission acknowledges the efforts made by the Italian government to improve the situation since the launch of the infringement procedure with a letter of formal notice in June 2014 and the subsequent reasoned opinion sent in February 2017.

However, more than three years after the launch of the infringement procedure, the Italian public authorities still take on average 100 days to settle their invoices, with peaks which can considerably exceed this figure.

The Commission has, therefore, decided to refer Italy to the Court of Justice of the EU.

Background:

To protect European businesses, particularly small- and medium-sized enterprises (SMEs), against late payment, the EU adopted Directive 2011/7/EU on combating late payment in commercial transactions in February 2011. The Directive was due to be integrated into national law by EU countries by 16 March 2013 at the latest. This Directive puts in place strict measures which, when properly implemented by EU countries, will contribute significantly to employment, growth and an improvement in the liquidity of businesses.

The main provisions of the Directive are:

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  Public authorities have to pay for the goods and services that they procure within 30 days or, in very exceptional circumstances, within 60 days.

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  Enterprises have to pay their invoices within 60 days, unless they expressly agree otherwise and provided it is not grossly unfair.

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  Automatic entitlement to interest for late payment and €40 minimum as compensation for recovery costs.

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  Statutory interest of at least 8% above the European Central Bank's reference rate.

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  EU countries may continue maintaining or bringing into force laws and regulations, which are more favourable to the creditor than the provisions of the Directive.

  On 26 August 2016, the Commission adopted a Report on combating late payment in commercial transactions which found that the implementation of the Directive is overall positive. The Directive has contributed to raise the issue of late payment high in national economic reform and political agendas. As regards payments from the public sector, payment delays are in average 10 days shorter compared to the situation before the entry into force of the Directive and some Member States are even undertaking additional efforts to foster a culture of "prompt payment". The Report nonetheless identified that further progress with the implementation of the Directive is still needed.

For More Information

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  On the key decisions in the November 2017 infringements package, see full MEMO/17/xy.

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  On the general infringements procedure, see MEMO/12/12(an info graph).

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  On the EU infringements procedure.

IP/17/4770