• The President of UOKiK issued two decisions against companies that did not pay their counterparties on time.
• He also initiated procedures to impose a penalty for failure to provide information necessary for the swift resolution of the case.
• In addition, since the beginning of the year, he has issued over 80 soft calls to entrepreneurs.

The President of UOKiK imposed fines on two large companies that generated payment backlogs. The first company to be penalised was Rawicka Fabryka Wyposażenia Wagonów Rawag, whose main activity is the manufacture of railway locomotives. The other entity that received a fine was the beer producer Carlsberg Supply Company Polska.

As part of these two procedures, the President of UOKiK analysed 16,762 invoices issued to 1,287 entities and determined that 322 of them had delayed 2,842 commercial transactions. The fine imposed on Rawag amounted to over PLN 291,000, while Carlsberg was fined PLN 69,000. Both entities did not contest the findings of the President of UOKiK and paid the fines imposed.

– Payment backlogs are one of the biggest problems in the Polish economy. This is also an obstacle to doing business, especially for smaller entrepreneurs, as it increases costs and limits employment and investment. Timely receipt of receivables and the related liquidity is a basic requirement for the survival of smaller entities – says the President of UOKiK Tomasz Chróstny.

The amount of the fine is determined in two stages. As part of the first stage, a maximum fine is calculated based on a formula provided in the Anti-backlog Act. In the second stage, the President of UOKiK may reduce it, taking into account additional circumstances specified in the Act. The President of UOKiK takes into account not only the value of overdue payments and the length of delays, but also the severity and circumstances of the violation, actions taken by the entrepreneur on its own initiative to stop the violation as well as cooperation with the Authority during the proceedings.

Soft interventions

UOKiK is also continuing its soft interventions against other entities whose payment discipline raises doubts and may indicate a risk of payment backlogs. Entrepreneurs are informed about any irregularities observed and the possible consequences of failure to improve. Soft calls are part of a broader prevention strategy – they shape the awareness and payment culture of entrepreneurs and enable them to change their practices without the need to initiate proceedings. Since the beginning of the year, 81 entrepreneurs have received soft calls.

Procedure for imposing a fine for failure to provide information

In April, the Office initiated a procedure to impose a fine for failure to provide the requested information by Neptun from Lublin. The company could face a fine of up to 5% of its annual revenue, not exceeding EUR 50 million. Such fine may also be imposed in the event of responses provided after the deadline set by the Office or the provision of information that is misleading as to the findings in the case.

Why cooperation is important

Procedures concerning backlogs are time-consuming due to the amount of analytical work that must be performed by the Office. The initiation of a procedure is preceded by an analysis of the likelihood of excessive delay in the fulfilment of financial obligations. Among other things, the value of delayed and unfulfilled obligations and the number of aggrieved creditors are checked. In contrast, during a single procedure, UOKiK examines tens of thousands of documents, such as invoices, agreements, annexes, arrangements, orders, corrections and compensations. That is why it is so important for entrepreneurs to respond quickly to calls.

The amendment to the Backlog Act of December 2022 also served to shorten the time needed for complex and time-consuming procedures. Amendments concerning the omission of certain categories of receivables in the course of procedures, in particular those arising between related entities within a capital group, allow, on the one hand, to limit the scope of information and documents that entrepreneurs must collect and submit to the President of the Office, and on the other hand, fulfil the entrepreneurs’ request not to penalise them for delays arising within a capital group.

In turn, when determining the amount of the fine, consideration should be given to, inter alia, the level of cooperation of the entrepreneur with the Office during the procedure, the circumstances raised and proven by the entrepreneur affecting the delays in payments or the measures taken by the company to avoid these delays, which indicates that the entrepreneur’s involvement in the procedure may work to its advantage and result in a reduction of the fine imposed.

Two paths of combating backlogs

In accordance with anti-backlog regulations, the fight against late payments is twofold. Firstly, an entrepreneur who has not received payment on time should first call on the debtor to settle the amount due for the goods or services. If this does not work, he may assert his rights in a civil court. In addition, one of the penalties for late payment by the debtor regulated by the Act is statutory interest for late payment in commercial transactions. In accordance with the provisions, if the parties to a commercial transaction have not specified a payment date in the agreement, the creditor is entitled, without a reminder, to statutory interest for delay in commercial transactions, after 30 days from the date of performance of the service, until the date of payment. Another consequence for a debtor who fails to make a monetary payment within the time limit specified in the agreement is compensation for the costs of recovering the debt, amounting to between EUR 40 and EUR 100, depending on the value of the monetary payment.

Another option is administrative procedure conducted by the President of UOKiK. If he determines that the entrepreneur has delayed payments for a total amount exceeding two million zlotys for three months, he may impose a fine payable to the state budget. It should be noted that the President of UOKiK cannot force a debtor to pay a creditor . The provisions governing the activities of the President of the Office of Competition and Consumer Protection do not empower him to take action on behalf of entrepreneurs in relation to individual claims. His activities are systemic and preventive in nature. The task of the President of UOKiK is to counteract backlogs, regulate the market through prevention and warnings – soft calls, penalisations of unreliable counterparties – imposing fines, and indicating which entrepreneurs do not pay on time and publishing decisions together with information about unreliable entities.

Are you a victim of backlogs? Notify the President of UOKiK

The applicable regulations allow for reporting to the President of UOKiK any suspicion that a given company is excessively delaying payments. Such notification must contain four elements: identification of the entrepreneur concerned, a description of the facts on which the notification is based, evidence that the delays are actually taking place, and the identity of the notifying party. The notification must be accompanied by documents that can confirm the delays in payment.

Visit the website on payment backlogs

What are payment backlogs? When can UOKiK investigate them? How can I report a business partner who has failed to make a payment? Who may file such a report? Answers to these and many other questions can be found at https://uokik.gov.pl/en/payment-gridlocks.