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Getting tough on late payers

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Getting tough on late payers

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New EU rules look set to be introduced to reduce payment delays between companies, and between businesses and public authorities.

Brussels proposes that past a 30-day limit, interest charges will kick in, plus compensation for recovery costs and 5% of the total due as a flat penalty. Günter Verheugen, European Commissioner for Enterprise and Industry, said: “Only 5% of big companies in Europe and 1.3% of small and medium-sized enterprises say that they are not affected by the problem of late payments.” The top industry official called the proposal “an important impetus to overcome the economic crisis by helping to avoid further bankruptcies and promoting businesses’ cash flow.” Late payments were said to total around 1.9 billion euros, most of it in the public sector. Business-to-consumer transactions are not in the proposal.