Malta in the clear as EU’S late payment directive comes into force on Saturday
A total of 18 EU member states will find themselves in breach of the European Union’s new late payments directive when it comes into force on Saturday.
A total of 18 EU member states will find themselves in breach of the European Union’s new late payments directive when it comes into force on Saturday. Malta and eight other member states, however, will not be facing any EU penalties since the new rules have already been transposed into their national legislations.
Malta had transposed the new rules on late payments, a long standing bone of contention between the government and the private sector, particularly with the pharmaceutical sector, last August and it was made retroactive to 1 March of last year. In addition to Malta, the Netherlands, Cyprus, Italy, Ireland, Spain, Slovakia, Bulgaria and Sweden have all transposed the new rules.
While the new rules have been transposed in Malta, Maltese businesses trading with other EU governments and private sectors may still be affected by the failure of the vast majority of EU member states to transpose the rules into their national legislations.
The new rules mean that EU governments in principle have 30 days to pay its suppliers or, in very exceptional circumstances, within 60 days. Businesses have 60 calendar days, unless agreed otherwise agreed by contract.
Speaking this week, European Commissioner for Industry and Entrepreneurship Antonio Tajani commented, “SMEs find it particularly difficult to stand up for their right to prompt payment. Late payments mean SMEs lose time and money, and disputes can sour relations with customers. This damaging late payment culture has to end. It is now time for member states to imple- ment the Late Payments Directive into their national law - giving SMEs the vital support they need in these difficult times and helping them fulfil their key role in European job creation.”
The new measures are optional for enterprises, insofar as they have been given the right to take action but are not obliged to do so. In some circumstances, a business may wish to extend the payment period for some days or weeks to keep a good commercial relationship with a specific client.
But the measures are obligatory for public authorities.