European Ombudsman

According to the European Ombudsman, Jacob Söderman, the European Commission has put into place "a simplification, clarification and general improvement of [its] procedures" with regard to payment of its creditors. He has concluded his own-initiative inquiry into the problem of late payment by the Commission by stating that the Commission has taken steps to tackle the problem of late payment. The Ombudsman is satisfied that these steps should lead to greater respect for payment deadlines. The Ombudsman's success in encouraging this Commission reform means that fewer companies should face financial hardships as a result of delays in receiving payment.

The Ombudsman opened his own-initiative inquiry in December 1999, after receiving an increasing number of complaints regarding the problem of late payment by the European Commission. The seriousness of the problem, particularly for small and medium-sized enterprises, was underlined by the Ombudsman in his opening letter to Commission President Romano Prodi. Although the problem of late payment can affect all companies, SMEs in particular can face cash-flow problems or even bankruptcy if they aren't paid on time.

During his inquiry, the Ombudsman encouraged input from all those affected by the problem by publishing all his correspondence with the European Commission on his Website. The European Commission co-operated fully with the inquiry by making all of its replies to the Ombudsman available for public dissemination on the Website and by agreeing to make public a private study that it had commissioned in order to improve its procedures. Third parties were invited to submit their opinions on the problem and on the steps put into place and proposed by the Commission. These opinions formed an important part of the Ombudsman's deliberations.

In the Commission's definitive opinion on the Ombudsman's inquiry, reference was made to the outside study prepared for the Commission by Grant Thornton, a firm of chartered accountants. The Commission also pointed out that in December 1999 (the month in which the Ombudsman launched his inquiry), an ad hoc group was set up to look at the problem.

The findings of both the outside study and the ad hoc group have led to a series of measures being put into place. These include a commitment to submit 95% of all invoices for payment within 60 days by 2002 (instead of the current 60%) and a proposal to formalise into the Financial Regulation the time limits for payments and interest for late payment. These measures, together with many others contained in the Commission's definitive opinion, have led the Ombudsman to conclude that the Commission has satisfactorily responded to his initiative.

The full Decision can be found on the Internet at: http://www.ombudsman.europa.eu/decision/en/99oi5.htm.
The main documents relating to the inquiry can be found at http://www.ombudsman.europa.eu/latepay/en/default.htm.

For further information, please call Gerhard Grill, Principal Legal Officer, tel. +33 (0) 3 88 17 24 23.