The late payment under the EU legislation

Author:Charlotte Ene
Position:Bucharest University of Economic Studies
Pages:291-300
SUMMARY

According to Article 14 EC, the European Union shall guarantee the free movement of goods and services. In this regard, it is necessary that the entrepreneurs should be able to do their business throughout the internal market and to recover their receivables in due time. Therefore, that late payment represents an obstacle to the proper functioning of the internal market. The Directive on... (see full summary)

 
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The late payment under the EU legislation
Lecturer Charlotte ENE
1
Abstract
According to Article 14 EC, the European Union shall guarantee the free
movement of goods and services. In this regard, it is necessary that the entrepreneurs
should be able to do their business th roughout the internal market and to recover their
receivables in due time. Therefore, that late payment represents an obstacle to the proper
functioning of the internal market. The Directive on comb ating late payment in commercial
transactions, Directive 2000/35/EC is placed in the context of maintaining and developing
an area of freedom, security and justice. This Directive governs all commercial
transactions irrespective of whether they are carried out between private or public
entrepreneurs or between entrepreneu rs and public authorities, having regard to the fact
that the latter handle a considerable volume of payments to business. It should therefore
also regulate all commercial transactions between main contractors and th eir suppliers
and subcontractors. This paper explores the legal framework on late payme nt of trade
credit from the European legislation perspective.
Keywords: late payment, retention of title clauses, overdue debts, commercial
transactions, enforceable title
JEL Classification: K12, K33
1. Introduction
The impact of enlargement and globalization on the internal market creates
a special context for individuals and companies that operate across borders. The
institutions of the European Union have launched a wide-ranging strategy to adapt
and harmonize European law to meet these new challenges.
At present there is a gap between the free circulation of goods and services
on the one hand and the timely receipt of the corresponding payments on the other.
The available statistics
2
revealed that, on average, 21% of all undertakings would
export more if their foreign customers were to pay more quickly; and more than
40% of invoices are still unpaid after 60 days. It is often argued that late payment is
due to the debtor’s financial difficulties and that a high level of statutory interest
1
Charlotte Ene, Bucharest University of Economic Studies, Law Department,
enecharlotte@gmail.com
2
European Business Survey 2000 Grant Thornton mentioned that one out of four insolvencies is
due to late payment. This leads to the loss of 450 000 jobs each year, adding to the high
unemployment level in Europe. In addition, o utstanding debts worth 23.6 billion euros are lost
every year through insolvencies caused by late payment.

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