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The utility companies impose interest on the debts of the business
26.02.2016
The utility companies have begun to charge interest on ventures for any delayed payments for used resources (gas, electricity, heat, water) - immediately after the expiration of each reporting month. The Bulwark of Russia public organization of small and medium businesses informed the respective Ministries of the recent appearance of such practice I its letters. The organization suggested amendments to the current laws in the sphere of resource supply. The letters (sent to Mikhail Men’, Minister of Construction and Utilities, Alexander Novak, Minister of Energy, Pavel Zavalny, Chairman of the State Duma Energy Committee) state that the imposition of penalties on delayed payments for the utility resources used by ventures was enabled by the new Article 317.1 of the Civil Code, which entered into force on June 1st
of 2015. The Article establishes the creditor’s right to exact from the organization interest for use of funds at the Central Bank prime rate. Such interest may be compounded from the moment of delivery of the goods (rendering of the service) until the actual payment – this is a sort of a commercial credit. According to the letters, the resource supply companies have eagerly begun applying the new provision. For example, as the Bulwark points out, the month is the reporting period under the recourse supply agreements; however, the bills are issued only on day 5 of the following month, and the paying of the bills itself takes approximately five more days. And the supply companies, in full compliance with the new Civil Code Article, have started exacting the legal interest from the business.
Mikhail Chugunov, Advocate of the Law Firm “YUST”, reminded the Izvestia newspaper that the introduction of the new article into the Civil Code caused much argument, because the sellers often include the delayed payment charge into the value of the goods or a service.
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The utility companies have begun to charge interest on ventures for any delayed payments for used resources (gas, electricity, heat, water) - immediately after the expiration of each reporting month. The Bulwark of Russia public organization of small and medium businesses informed the respective Ministries of the recent appearance of such practice I its letters. The organization suggested amendments to the current laws in the sphere of resource supply. The letters (sent to Mikhail Men’, Minister of Construction and Utilities, Alexander Novak, Minister of Energy, Pavel Zavalny, Chairman of the State Duma Energy Committee) state that the imposition of penalties on delayed payments for the utility resources used by ventures was enabled by the new Article 317.1 of the Civil Code, which entered into force on June 1st
of 2015. The Article establishes the creditor’s right to exact from the organization interest for use of funds at the Central Bank prime rate. Such interest may be compounded from the moment of delivery of the goods (rendering of the service) until the actual payment – this is a sort of a commercial credit. According to the letters, the resource supply companies have eagerly begun applying the new provision. For example, as the Bulwark points out, the month is the reporting period under the recourse supply agreements; however, the bills are issued only on day 5 of the following month, and the paying of the bills itself takes approximately five more days. And the supply companies, in full compliance with the new Civil Code Article, have started exacting the legal interest from the business.Mikhail Chugunov, Advocate of the Law Firm “YUST”, reminded the Izvestia newspaper that the introduction of the new article into the Civil Code caused much argument, because the sellers often include the delayed payment charge into the value of the goods or a service.
Read more
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