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Office of Competition and Consumer Protection

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President of UOKiK initiated 51 proceedings concering payment backlogs

< previous | next > 07.07.2020

President of UOKiK initiated 51 proceedings concering payment backlogs
  • In June of this year, the President of the Office of Competition and Consumer Protection (UOKiK), Tomasz Chróstny, initiated proceedings concerning payment backlogs with respect to 51 large enterprises.
  • The purpose of these actions taken by the President of UOKiK is to improve financial liquidity of Polish enterprises, especially micro, small and medium-sized enterprises.

In June of this year, the President of UOKiK, Tomasz Chróstny, initiated proceedings with respect to 51 enterprises which may have the biggest payment backlogs. They were selected after analysing information on the likelihood of delays in the first quarter of 2020, obtained on 20 May 2020 from the National Tax Administration (KAS). Entities selected to be the subject of proceedings include large companies operating within the territory of Poland, including confectionery, white goods or clothing manufacturers or logistics companies.

The initiation of proceedings was preceded by laborious analytical work. We have identified market areas where the risk of occurrence of payment backlogs is the highest. Based on data obtained from the National Tax Administration, we have examined nearly a million transactions between nearly 100 thousand enterprises, which allowed us to narrow it down to 51 entities suspected to have the highest amount of outstanding payments,” said Tomasz Chróstny, President of UOKiK.

It should be noted that UOKiK is able to effectively identify and counteract payment backlogs only thanks to wider, statutory access to data. Therefore, it is able to make market interventions aimed at improving timely financial settlements in commercial transactions where there is a disparity in the size and market power of transaction participants.

“According to the legislative impact assessment, in 2020 it was planned to implement 50 anti-backlog proceedings. Our goal for the next six months is to at least triple that number by efficiently implementing analytical procedures in the course of proceedings. The fairness and timeliness of settlements between trading partners is the basic element of healthy market economy, and UOKiK’s role is to put greater pressure on entities who fail to settle their financial obligations towards trading partners in a timely manner, so as to prevent the loss of liquidity by vendors,” added Tomasz Chróstny.

New competencies of the President of UOKiK now include conducting proceedings concerning excessive delays in the settlement of financial obligations. The President of UOKiK may intervene, if the sum of outstanding amounts owed by an enterprise within 3 consecutive months is at least PLN 5 million (as of 2022 this amount will change to PLN 2 million). This applies to arrears under agreements concluded after 1 January 2020 or earlier, if the payment became due in 2020.

The purpose of new regulations and our actions is to improve the financial liquidity of Polish companies. It’s a prerequisite for the security of enterprises and their employees. That’s why I consider the fight against payment delays as one of the priorities of the Office of Competition and Consumer Protection,” said Tomasz Chróstny, President of UOKiK.

Payment backlogs are a phenomenon consisting in major delays in the settlement of deferred payments for the delivery of goods or services to trading partners. It is one of the biggest problems faced by the Polish economy. Enterprises which do not receive cash on a frequent basis are unable to pay their trading partners and employees, forcing them to seek external financing and, therefore, to bear substantial costs. Overdue payments and excessively long payment deadlines also increase the costs of running a business and, in the most severe cases, may lead to bankruptcy or liquidation for businesses affected by them.

We’ve developed anti-backlog provisions with the conviction that we need to put a stop to the phenomenon of excessive payment delays by larger entities when dealing with smaller companies. Using their advantage in this way is harmful to the economy as a whole. This is particularly important in the current situation when we’ve been hit by the coronavirus pandemic. UOKiK plays an important role in the implementation of anti-backlog regulations,” said Jadwiga Emilewicz, Deputy Prime Minister and Minister of Development.

What’s next?

We need to verify conducted analyses through administrative procedures as well as to collect and comprehensively assess the evidence. In the course of the proceedings, the entities are under an obligation to provide information and documents at the request of the President of UOKiK. This includes electronic tax records and accounting documents. This means that in order to determine invoice payment due dates UOKiK may examine data contained in Standard Audit Files for Tax (JPK), such as JPK_WB or JPK_KR, and assess data from different sources, including conducted audits.

What is the penalty?

The sanction that may be imposed on enterprises is the sum of individual penalties for each outstanding amount owed or paid past its due date. Individual penalties are calculated according to a special formula and their amount depends primarily on the amount owed and delay in its payment.

                                 ICP (penalty) = COV x n/365 x SI

ICP – individual cash penalty for an unsettled payment obligation or a payment obligation settled past its due date,

COV – value of an unsettled payment obligation or a payment obligation settled past its due date,

n – a period which lapsed from the due date of an unsettled payment obligation or a payment obligation settled past its due date to the last day of the period covered by the proceedings or to the day on which the payment obligation is settled, provided that the payment obligation is settled within the period covered by the proceedings, expressed in days,        

SI – statutory interest for lay payment in commercial transactions, determined as at the date of issue of a decision imposing an administrative cash penalty.

Visit the website dedicated to payment backlogs

Examples of penalty calculation for specific amounts owed as well as the most important information regarding the competencies of the President of UOKiK as regards payment backlogs can be found on website launched specifically for this purpose. What are backlogs, when can the President of UOKiK deal with them, how can I report an enterprise which fails to pay and who can do that? These and many other questions and answers can be found at www.zatoryplatnicze.uokik.gov.pl

Backlogs in the agri-food sector

At the same time, an investigation into practices related to the use of superior bargaining power by nearly 100 of the largest entities from the agri-food industry is nearing conclusion. One of the issued under examination are also excessive payment delays. The proceedings have been initiated prior to actions taken based on anti-backlog regulations which require prior delivery of data by the National Tax Administration. It should be noted that within a few days of an intervention made by the President of UOKiK, approximately PLN 400 million of overdue amounts payable has been paid to farmers and vendors.

Additional information for the media:

UOKiK Press Office
Pl. Powstańców Warszawy 1, 00-950 Warszawa, Poland
Phone +48 695 902 088, +48 22 55 60 246
E-mail: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]
Twitter: @UOKiKgovPL

Attached files

 

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