Dear Mr and Mrs P.,
On 7 April 1999 you lodged a complaint with the European Ombudsman on behalf of Popignon SARL. It concerned the late payment of an invoice regarding a study contract funded by the European Commission. On 22 April 1999, you informed me that the payment had finally been made, but that you wished to maintain your claim for compensation.
On 3 May 1999, I forwarded the complaint to the President of the European Commission. The European Commission sent its opinion on 2 August 1999 and I forwarded it to you with an invitation to make observations, if you so wished. I received your observations on 23 September 1999. On 10 March 2000 I wrote to the President of the European Commission in order to seek a friendly solution. The Commission replied to this initiative by letter of 5 May 2000. You commented on the Commission's proposals by letter of 29 June 2000.
I am writing now to let you know the result of the inquiries that have been made.

THE COMPLAINT

Popignon SARL carried out a study under a contract with the Moroccan Ministry of Agriculture financed by EC funds. The invoice for the contract was addressed to the contractor in April 1998 but was actually paid by the Commission in April 1999. Thus, the complainants, owners of Popignon SARL, decided to lodge a complaint with the European Ombudsman to obtain the payment of interests for the delay. The complainants requested to be paid 10% (i.e. € 1.706,57) of the final bank transfer made by the European Commission.

THE INQUIRY

The Commission's opinion
The Commission explained that the delay in first place originated in the initial decision of the Moroccan Ministry of Agriculture to contest the invoice. Later, the Ministry decided to accept the invoice and requested its payment by the European Commission. This request was endorsed by the Commission's Delegation in Rabat and reached Brussels on 11 November 1998.
Once the payment request was to be processed by the European Commission, the corresponding budget line was exhausted. New credits out of the 1999 budget only became available by the end of February 1999. The payment request was entered on 8 March 1999, and the complainants were paid on 6 April 1999.
The Commission stressed that it is its policy to pay interests on delayed payments. However, it considered that in the present case, the claim for interests arose from the contract between Popignon SARL and the Moroccan Ministry of Agriculture. It therefore had to be directed there. Furthermore, the question of delayed interests could not be discussed on the basis of the demands put forward by the complainants.
The complainants' observations
The complainants considered the Commission to be responsible for the delay which occurred between the day the payment request was received (11 November 1998) and the actual date when the payment (6 April 1999) was made. Given that the Commission committed itself to making payments within 2 months, the complainants asked that interests be paid for the period of time between 11 January 1999 and 6 April 1999.
The complainants based their estimation of the amount to be paid, (i.e. 1% of the global contract price per week of delay) on the contract signed with the Moroccan authorities.

THE OMBUDSMAN'S EFFORTS TO ACHIEVE A FRIENDLY SOLUTION

After careful consideration of the opinion and observations, the Ombudsman did not consider that the Commission had responded adequately to the complainant's claims.
The Commission committed itself to making payments within a period of 60 days. In the present case, the complainants did not demonstrate that the Commission was to be held responsible for the delay that arose out of the Moroccan Ministry's actions. However, the Ombudsman's provisional conclusion, was that the Commission was to be held responsible for the period of time lapsed after it received the payment request. Therefore, the fact that the Commission refused to pay interests for the period of time exceeding 60 days after the reception of the payment request appeared to be an instance of maladministration.
The Commission was not bound by the terms of the contract between the Moroccan authorities and the complainants. The Ombudsman therefore proposed that the interests to be paid to the complainants be estimated on the basis of the Commission's proposal contained in internal note SEC(97)1205(1), i.e. in accordance with the implementing provisions(2) of the Financial Regulation of 21 December 1977.
The Commission accepted the Ombudsman's proposal. According to the Commission's calculations the interests to be paid amounted to 195.67 €. On 29 June 2000 the complainants accepted the Commission's proposal.

THE DECISION

1 The Commission's refusal to pay interests for a delayed payment
1.1 The complainants decided to lodge a complaint with the European Ombudsman to obtain the payment of interests for a delayed payment. The complainants requested to be paid 10% of the final bank transfer made by the European Commission.
1.2 The Commission refused to pay interests on the basis of the complainants' estimation which referred to the contract signed between the complainants and the Moroccan authorities.
1.3 In the Ombudsman's view the Commission could only be held responsible for delays originating in its own actions. Furthermore, the Commission was not bound by the contractual penalties for delayed completion provided for in the aforementioned contract.
1.4 Thus, in order to seek a friendly solution, in accordance with article 3(5) of his statute, the Ombudsman proposed that the Commission estimates the interests to be paid on the basis of its own internal note on late payments (SEC(97)1205).
1.5 The Commission subsequently accepted the Ombudsman's proposal and agreed to pay delayed interests. The complainants accepted to be paid the amount proposed by the Commission.
2 Conclusion
Following the Ombudsman's inquiry, it appears that a friendly solution to the complaint has been agreed between the Commission and the complainants. The Ombudsman therefore closes the case.
The President of the European Commission will also be informed of this decision.
Yours sincerely,
Jacob SÖDERMAN

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(1) III., para. 9. : "(…) The interest rate will be determined in the same way as the rate applied to the Commission's debtors (Article 94 of Regulation laying down detailed rules for the implementation of the Financial Regulation)(…)."

(2) Commission Regulation (Euratom, ECSC, EC) No 3418/93 of 9 December 1993 laying down detailed rules for the implementation of certain provisions of the Financial Regulation of 21 December 1977 OJ L 315 , 16/12/1993 p. 0001 - 0024.

Article 94

1. Any debt not repaid on the due date shall be subject to interest as follows:

- debts denominated in ECU: the rate of interest applied by the European Monetary Cooperation Fund to its operations in ECU (10), increased by one and a half percentage points,

- debts denominated in a national currency: the three-month interbank offer rate for the appropriate market, increased by one and a half percentage points.

2. The rate of interest applicable is that in force during the month in which the debt is due.

3. Interest shall be calculated from the due date laid down in the recovery order to the date on which the debt is repaid in full.