1. The Directive from the perspective of the public sector Late Payment Directive Herald Bonnici Director General (Financial Management & Policy) MINISTRY OF FINANCE, THE ECONOMY AND INVESTMENT

2. Late Payment Directive The directive was transposed into the Maltese law through Legal Notice 272 published on 14 th of August 2012. The transposition forms part of the Commercial Code (Chapter 13 of the Laws of Malta). 2

3. Late Payment Directive Malta, together with Italy and Cyprus, was among the first Member States which notified the EC that measures had been taken to transpose the directive into national law. Source – European Commission presentation titled “Directive 2011/7/EU on combating late payment in commercial transactions”, Ireland 2013 3

4. Consultation Process Stakeholders: Chamber of Commerce General Retailers and Traders Union Malta Business Bureau Malta Federation of Professional Associations Ministry for Fair Competition, Small Business and Consumers Ministry for Justice and Home Affairs 4

5. Transposition Process Memo to Cabinet Legal Notice 272 of 2012 Commercial Code amended 5

6. Information Dissemination MFEI Circular 8/2012 was issued; Three information seminars were organised by the Ministry targeting Ministries and Departments, Public Sector Entities and Local Councils; 6

7. Public Authorities "public authority" means the Government of Malta, the Local Councils or bodies governed by public law, associations formed by one or several of such authorities or bodies governed by public law. For the purpose of this definition, "a body governed by public law" means a body which: (a) is established for the specific purpose of meeting needs in the general interest, not being of an industrial or commercial nature; (b) has legal personality; and (c) is financed for the most part by the State, or Local Councils or other public bodies, or is subject to management supervision by those bodies, or has an administrative, managerial or supervisory board more than half of whose members are appointed by the State, Local Councils, or other public bodies. The provisions of this directive apply to “public authorities” which have the same meaning as “contracting authorities” as defined by the Public Procurement Regulations. A list of such contracting authorities can be found in Schedule 1 of the said regulations. A copy is available through www.justiceservices.gov.mt. 7

8. Late Payments – General Information Average duration to settle payments in commercial transaction between public authorities and business – 89 days: Data as at March 2012. Data was collated from all public authorities i.e. ministries, departments, entities and local councils. The figure is computed on creditor balances due to both businesses and also other public authorities. This exercise is being repeated on an annual basis. 8

9. Late Payments – General Information Average duration to settle payments in commercial transaction between public authorities and business – 89 days: - This is based on ‘Total Creditors Due’ as at March 2012 which totalled €90.2m. - Sub-divided as follows: a) €3.6m contested; b) €29.5m within the 30 days; c) €57.1m older than 30 days, of which €38.1m older than 60 days. - Split by nature: a) €8.3m due by local councils; b) €27.8m due by entities classified as public authorities; c) €54.1m due by Ministries and Departments. 9

10. Late Payments – General Information Source – European Commission presentation titled “Directive 2011/7/EU on combating late payment in commercial transactions”, Ireland 2013 10

11. Late Payments – General Information  At European level: In commercial transactions with public authorities the average payment duration in days is 65.  Best Performers: Finland – 24 days Estonia – 25 days Norway – 34 days  Worst Performers: Italy – 180 days Greece – 174 days Spain – 160 days 11

12. Discussion Contact: Financial Policy and Management Division fpmd.mfei@gov.mt 12 MINISTRY OF FINANCE, THE ECONOMY AND INVESTMENT