New DGCCRF guidelines on payment terms

Officers of the DGCCRF are empowered to search for and find breaches of the regulations on payment terms between companies and in public procurement contracts. In the event of exceeding a maximum period, it may in particular impose an administrative fine of up to 2 million euros or, in the event of repetition within two years, 4 million euros . 

The DGCCRF has clarified and completed its guidelines on the modalities of its controls for the compliance with payment deadlines between professionals. 

The revised guidelines detail the extent of its control and the arguments that can be put forward to evade punishment.

On the progress of the control, it is now specified that the transmissions of information and documents can be done remotely , the list of Documents of which the agents can request communication is completed, and the fact that the controls cover, with exceptions, a period of one year corresponding to the last financial year closed.

The novelty is that its guidelines clarify the arguments that the DGCCRF do not consider as influencing its analysis and also the exonerating causes in case of late payment.

The lines specify that the author late payment cannot usefully put forward the following arguments: 

• its good faith, provided that no intentional element is required to characterize a breach;

• in principle, an accounting system that is irregularly kept (C. corn. art. L 123-23);

• the fact that the invoice does not include a legal or contractual mention (as long as it indicates enough elements to allow the buyer to verify the merits of his debt (CEPC opinion n° 19-11 of September 19, 2019);

• the supplier’s agreement to be settled beyond the deadline, provided that the regulation is of public order;

• a payment term average below the legal ceiling, since payments before the legal deadline cannot compensate for exceedances of the ceiling, even if they concern the same suppliers;

• difficulties related to the internal invoice processing process, as the supplier does not have to suffer the consequences. 

On the other hand, the buyer can claim: 

• the existence of a duly justified dispute relating to a significant part of the service or goods concerned;

• the late transmission of the invoice, provided that the buyer, co-responsible for the issuance of this invoice (C. corn. art. L 441-9), proves that it has reminded the seller at least once before the legal deadline;

• the fact that the invoice has been the subject of a credit note whose amount covers the entire amount of the invoice. 

On the quantum of the fine, the DGCCRF recalls that the basic amount of the fine, which will then be adjusted according to the circumstances of the breach, is calculated by adding the gains in working capital requirements (WCR) by relating the amount of the invoice to the number of days of delay over the controlled period.