The Court of Justice of the European Union (CJEU) ruled on Thursday that Portugal failed to comply with a European directive on late payments in commercial transactions because state-owned enterprises took more than 30 or 60 days to pay.
In a ruling published Thursday, the court declared Portugal “non-compliant” with a directive setting out measures to combat late payments in commercial transactions, following a request from the European Commission.
“Taking into account the official data provided by Portugal up to 14 March 2023 and the missing data, the Commission has instituted this action for non-compliance on the basis of […] that several Portuguese State-owned enterprises had systematically and persistently paid their commercial debts over longer periods than those provided for in the Directive”, that is, over 30 or 60 days, the CJEU lists.
The decision taken this Thursday “confirms the aforementioned violations of Union law”, since, according to the Court, Portugal has failed to comply with the obligations related to such Community law in relation to the local administration (between 2013 and 2017), in the Portuguese public health service providers (between 2013 and 2022), in the Autonomous Region of Madeira (between 2013 and 2022) and in the Autonomous Region of the Azores (in 2013 and between 2015 and 2022).
“This finding is necessary in respect of the local administration, the Autonomous Region of Madeira, the Autonomous Region of the Azores and the public entities providing health services, the delays in payments being considerably more significant in the last three cases,” the CJEU said.
The country even put forward grounds of defence related to the situation of late payments, the absence of a serious, persistent and systematic breach, and the principles of proportionality and cooperation, but the Court considers “the three grounds of defence invoked by Portugal to be unfounded” and to attempt to minimise or even justify the fact of failure to fulfil the obligation to ensure effective compliance by its public entities with the aforementioned payment deadlines”.
The European Directive in question, in force since February 2011, aims to combat late payments in commercial transactions in order to ensure the proper functioning of the internal market, promote the competitiveness of companies and, in particular, small and medium-sized companies.