1. EU Directive on combatting late payment in commercial transactions..... from a private sector perspective Charles Xuereb Simonds Farsons Cisk plc 14 February 2013

2. Introduction

3. Effects of late payments Cash flow Financial and administrative costs Investment opportunities Uncertainty.... result in

4. Late payments in Europe Greece Spain – 75 Days Portugal Italy – 67 days Cyprus

5. EU Directive Payment of goods and services by not later than 30 days Credit may be extended to 60 days if both parties agree Extending beyond 60 days – if “expressly agreed” and if not “grossly unfair” BUT NO ATTEMPT TO OVERRIDE ANY AGREEMENT BETWEEN TWO PRIVATE PARTIES

6. Are interests charged in practice? Utilities’ providor Telephony VAT Department – interest + penalties But in the real world that our businesses live in, can we afford to charge interest on late payments?

7. Solution? No EU Directive, legislation or court action can replace Good credit management practices!

8. Prompt payment Ideally all our clients pay cash! More relevant – adherence to what is agreed upon irrespective of days. Prompt payment and certainty of payment is critical Prompt Payment Code.

9. Prompt payment Managing customer relationships Fear of use of Late Payment Legislation – risk of using client Regulation is NOT remedy for late payment but intended to create environment for driving payment on time. Nothing beats good credit management practices.

10. Thank you