The New Year brings new solutions for countering payment backlogs

07.01.2020 Publications

Beginning 1 January, payment deadlines in excess of two months may be agreed upon only between business enterprises of similar size. Contractual dealings between large and small companies will be subject to a rigid 60-day payment deadline. A company which persists in payment arrears to the level of PLN 5 million over any three consecutive months is liable for a penalty applied by the Polish Office of Competition and Consumer Protection (UOKiK).

As of 1 January 2020, business enterprises must adapt the timeframes applied in settlements with their contractors to the amended laws regulating payment deadlines in commercial transactions. The new legislative Act regarding counteraction of excessive delays in commercial transactions introduces amendments to no less than 12 other statutes with a view to preventing payment backlogs in the Polish economy and to discouraging contractual provision for excessively long payment deadlines.

The Act is the brainchild of the Ministry of Entrepreneurship and Technology, since rechristened the Ministry of Development. In the assessment of Bernadeta Kasztelan-Świetlik, partner in GESSEL, these new regulations will be particularly hard on large companies which throw their weight around when dealing with small and medium-sized entities; large companies are now subject to a stricter set of duties and face potential penalisation by UOKiK.

The full text of this article is available (in Polish) on www.prawo.pl. If you are interested in an English-language version or in discussing the issues raised herein with one of our lawyers, please contact: kontakt@gessel.pl

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