July 6, 2022

Volume XII, Number 187

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July 06, 2022

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Payment Terms in France: Updated Sanctions by the Regulator

Non-French companies need to pay attention to the French Payment Terms Regulations when paying (or being paid by) any French company. On December 2, 2021, the French regulator in charge of investigating and sanctioning noncompliance with the French payment terms regulation, the “DGCCRF,” published a “Review of the sanctions taken by the DGCCRF in the first half of 2021 and publication of guidelines relating to the determination of sanctions“.

This Review demonstrates the importance the government places on compliance with the French Payment Terms Regulation to preserve the cash flow of business, and of its determination to sanction businesses that do not comply.

Why is this important to non-French companies? For the purpose of creating an equal level playing field, 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 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.

Review of the first half of 2021

For 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 pending proceedings for a not yet final amount of more of € 8.8 million),

  • with 10 penalties above € 600,000 and 4 penalties of € 1 million (or a little more).

Investigations:

  • covered 690 establishments, including 13 public enterprises and 426 enterprises having benefited from a loan guaranteed by the State (“PGE”);

  • have shown that nearly 30% of companies pay a significant fraction of their invoices beyond the payment terms regulation.

  • 56% of the follow up actions by the DGCCRF consisted of warnings, 7% of injunctions – so-called educational and corrective consequences – and 37% of administrative fine procedures.

Additionally, the proportion of penalties has fallen, with 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 sanctions

For the purposes of deterrence, penalties for late payments are systematically published on the DGCCRF’s website.

© Copyright 2022 Squire Patton Boggs (US) LLPNational Law Review, Volume XI, Number 343
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About this Author

Stephanie Faber International Business Attorney Squire Patton Boggs Paris, France
Of Counsel

Stephanie Faber heads the Data Privacy & Cybersecurity Practice and the Intellectual Property & Technology Practice in the Paris office. She specialises in international business law, with more than 20 years of experience. Her legal practice encompasses business transactions and operations, as well regulatory and compliance work.

In relation to the Data Privacy & Cybersecurity Practice, Stephanie advises on:

  • GDPR gap assessment and compliance programs
  • Data breach management and notification
  • Database creation, international...
33 1-5383-7400
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