• The President of UOKiK, Tomasz Chróstny, has issued further decisions regarding payment gridlocks.
• He imposed financial penalties, amounting to over PLN 374,000 in total, on Borg Automotive and Sitech .
• In the case of STS Logistics and Agrii Polska, penalties were waived, and proceedings concerning Modelez Europe and Viacon Polska were discontinued.

- Since mid-2020,  the President of UOKiK can intervene in matters related to combating payment gridlocks. The aim of our actions in this regard is to improve the payment discipline of Polish entrepreneurs, ensure market stability and protect small and medium companies. I have issued six further decisions regarding gridlocks. In two cases I imposed financial penalties, and two other entities avoided financial sanctions having met the statutory, obligatory conditions for the waiver thereof. The two latter decisions were to discontinue proceedings against two companies whose arrears did not exceed the amount of PLN 5 million stipulated in the Act within the period of 3 subsequent months - says Tomasz Chróstny, the President of UOKiK.

Decisions entailing financial penalties

Two decisions within the framework of which the authority imposed financial penalties for generating payment gridlocks concern companies operating in the automotive industry - Borg Automotive and Sitech.

Borg, a company from Zduńska Wola which, among other things, repurchases and delivers remanufactured car parts to the European secondary market, was found by the Office to be late with the payment of remuneration amounting to over PLN 8.6 million to 317 contractors in the period from February to April 2020. The largest amount of a late payment to a single counterparty amounted to over PLN 1.3 million. The penalty imposed by the President of UOKiK amounts to over PLN 14,500 .

The second decision concerns Sitech, a company which belongs to the Volkswagen Group and specializes mainly in the production of metal frames for car seats. The investigation revealed that the delays generated by the company in the period from February to April 2020  affected as many as 433 Polish contractors. The total amount of monetary payments that were not paid by the company on time reached almost PLN 64 million (over 3,000 invoices). In extreme cases, trading partners had to wait even 119 days for the payment of due remuneration.  The penalty imposed by the President of UOKiK in this case amounted to over PLN 358,000 .

Two waivers of penalty

In accordance with the applicable provisions, the President of UOKiK must waive a financial penalty if the monetary payments that were not received or were received late by a party to the proceedings exceed the sum of delays that it itself generated within the investigated period of three months. This was the case in the proceedings against STS Logistics and Agrii Polska.

Two decisions to discontinue proceedings

Two final decisions concern Mondelez Europe from Switzerland, which conducts its activity in Poland via a branch, and Viacon Polska. In the period from January to April 2020, both companies did not exceed the five-million threshold of delays. As a result, the President of UOKiK discontinued the proceedings against them.

Excessive delays in monetary payments and the method of payment calculation

In cases concerning payment gridlocks, the intervention of the President of the Office is possible if the total amount of all monetary payments that were not made by an entrepreneur or monetary payments which were made by an entrepreneur after the expiry of the time limit exceeds the amount of PLN 5 million within 3 subsequent months.  The method of payment calculation is strictly regulated by the Act, and it is the sum of individual penalties for each delay. According to the formula, the amount of individual penalties depends on the amount of the delayed payment, the duration of the delay and the amount of statutory interest for late payment in commercial transactions.

New proceedings

At the same time, the President of UOKiK continues to intervene with other entities for which he has suspicions that they are excessively late in paying their contractors. This time, the actions carried out by the Office showed that there is a risk of payment gridlocks in, among others, the agricultural and food industry. The analysis conducted by UOKiK also showed a greater likelihood of delays in monetary payments in situations where the invoices are issued by individuals conducting business activity, and goods or services are purchased by commercial law companies whose revenue in a given tax year exceeded the equivalent of EUR 50 million.

This way, UOKiK identified other entities with regard to which the President of UOKiK has initiated administrative proceedings concerning excessive delays in monetary payments. These include:  Ikea Industry Poland, Kuehne+Nagel, Pfeifer & Langen Polska, Kampol-Fruit, Polmlek Grudziądz, Przedsiębiorstwo Drobiarskie Drobex, Zakłady Drobiarskie Farmio and Real S.A. This time, the period investigated by UOKiK in which entrepreneurs could potentially have a delay in payments were 3 subsequent months at the turn of 2020 and 2021.

Legal changes are underway

- Based on the experiences obtained within the framework of the conducted proceedings, we can already see that the amount of imposed penalties stemming from the statutory formula is too low, and the proceedings usually involve the resources of the Office and entrepreneurs to a large extent. Together with the Ministry of Finance and Ministry of Economic Development, Labour and Technology, we are working on legislative changes to make the proceedings more efficient and - through the mechanism of sanctions - increase pressure on large entrepreneurs in order to ensure timely and fair settlement with their contractors - says Tomasz Chróstny, the President of UOKiK.

Additional information for the media:

UOKiK Press Office
Pl. Powstańców Warszawy 1, 00-950 Warszawa, Poland
Phone +48 695 902 088, +48 22 55 60 246
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