Non-French companies should pay attention to French regulations on payment terms when paying (or being paid by) a French company. On December 2, 2021, the French regulator responsible for investigating and sanctioning non-compliance with French regulations on payment terms, the “DGCCRF”, published a “Review of the sanctions taken by the DGCCRF in the first half of 2021 and publication of guidelines for the determination of penalties”.
This report bears witness to the importance that the government attaches to compliance with French regulations on payment deadlines in order to preserve company cash flow, and to its desire to sanction companies that do not comply with them.
Why is this important for non-French companies? In order to create a level playing field, the French authorities consider that the French payment terms regulation applies not only to payments between two French companies, but also to payment by a French company to a non-French company or from from a non-French company to a French company.
Administrative sanctions since 2014
Since the entry into force of the administrative sanctions in 2014, there have been:
- 1452 administrative fines notified by the DGCCRF,
- for nearly 98.8 million euros in total.
As a reminder, the Sapin 2 law of December 9, 2016 increased the maximum amount of administrative fines incurred by a legal person from 375,000 to 2 million euros.
First-half 2021 report
For the investigations carried out in 2020 following breaches prior to the health crisis, there were:
- 95 administrative fine procedures,
- for a total of more than 16.3 million euros (77 sanction decisions already notified for a total amount of fines of more than 7.5 million euros and 18 proceedings in progress for an amount not yet definitive of more of 8.8 million euros),
- with 10 penalties over €600,000 and 4 penalties of €1 million (or a little more).
Investigations:
- covered 690 establishments, including 13 public companies and 426 companies having benefited from a loan guaranteed by the State (“PGE”);
- showed that nearly 30% of companies pay a significant fraction of their invoices beyond the payment deadline regulations.
- 56% of the action taken by the DGCCRF consisted of warnings, 7% of injunctions – so-called pedagogical and corrective consequences – and 37% of administrative procedures for fines.
In addition, the proportion of penalties has decreased, the DGCCRF taking into account the financial difficulties of certain companies in the context of the health crisis, except in the event of significant overruns.
Publication of penalties
For the sake of deterrence, late penalties are systematically published on the DGCCRF website.
