A new guideline on the use of “fair” credit terms between business operators and small and medium enterprises (SMEs) will take effect on 16 December 2021. For trading, manufacturing and services businesses, the credit terms must not exceed 45 days unless a shorter term has already been agreed. For trading, manufacturing and services businesses only related to agricultural products or processed agricultural products using a non-complicated manufacturing process, the credit terms must not exceed 30 days unless a shorter term has already been agreed.
The guidelines also provide some room to fix credit terms different from the abovementioned terms if there is a reasonable basis on which to do so for business, marketing or economic reasons. In this Update, we explain the rationale behind the issuance of these guidelines and their intended scope.
For more information, click here to read the full Legal Update.
