KAMEN KOLEV: QUICK PAYMENTS NEED TO BE TRANSFERRED TO THE BUSINESS SECTOR AND BY THE BULGARIAN STATE

In order for the number of bankrupt companies in 2011 to be limited, it is imperative for real and faster payments to be transferred as there is lasting deterioration of contract discipline both between the business sector and of the public sector, stated to Klassa, Kamen Kolev, Vice Chairman of the Bulgarian Industrial Association (BIA). As to inter-company relations, the expert recommended an acceleration of insolvency proceedings and a strengthening of the mechanism of the NRA (National Revenue Agency) in order to put an end to the vicious practise of money-draining schemes defrauding companies, as well as in order to stop the transfer of indebted companies to incapacitated persons as key factors for the improvement of discipline.

From the point of view of the state, Kolev called for its timely settlement with the business sector under public procurement contracts. "The payment mechanism through BBD (Bulgarian Bank for Development) has already become effective but it comes down only to liabilities as of December 31, 2009. Besides, over last year and, certainly in 2011, new debts have been and will be accumulated," commented the BIA Vice President. The vicious practise as regards all public procurement orders is that the assignors draw up all draft contracts, and propose the mechanisms and the deadline for payments. In fact, they are extended up to 160 days after the delivery or the implementation of services. This forces the business sector to agree to such terms without being able to change them. Actually, it has the right to choose whether to participate in the procurement contract or not, explained also Kamen Kolev. Therefore, the Public Procurement Agency should provide exemplary samples and stipulate clearly that the contracting entity is not allowed to delay the transfer of payments covering such long periods.

According to the EU Directive, the final deadline set for the settlement transfer to private companies in contractual relationships is 30 days, unless the contract explicitly stipulates otherwise. If both parties agree, the period can be extended up to 60 days or more, but only if it does not constitute a gross abuse with respect to the creditor. For payments of public authorities to businesses, the standard deadline is also set at 30 calendar days. If both parties wish to extend this period, this can be done with the express consent of both parties, while the term should not exceed 60 calendar days. The Directive must enter into force in Bulgaria within 2 years, while BIA appeals this to happen as quickly as possible. Kolev gave as example the companies involved in the Bulgarian Association of Wholesale Importers and Manufacturers of Medical Equipment who are waiting to receive a total of BGN 100 mln.