New Regulations: All Enterprises And Organs Must Pay Within 30 Days Of Purchase. Violators Or High Fines!

Recently, from the website of Ministry of industry and information technology, it was learned that in order to promote the timely payment of small and medium-sized enterprises by state organs, institutions and large enterprises, and safeguard the legitimate rights and interests of small and medium-sized enterprises, according to the law of the People's Republic of China on the promotion of small and medium enterprises, the Ministry of industry and information technology drafted the administrative regulations on the timely payment of funds for small and medium enterprises (Draft) (hereinafter referred to as the draft for Soliciting Comments), and is now seeking public opinions from the public. Please give feedback before October 7, 2019.

According to the draft, state organs, public institutions and large enterprises should pay funds for goods, projects and services to SMEs in time and in full in accordance with legal provisions and contractual stipulations.

The draft has clearly stipulated the time limit for payment. State organs, public institutions and large enterprises shall pay for goods, projects and services from small and medium-sized enterprises within 30 days. If the contract stipulate otherwise, the longest payment period shall not exceed 60 days. If the contract specifies that the inspection or acceptance shall be regarded as the payment terms, the longest period mentioned above may be extended for 30 days. Based on the nature of the contract, it will take more time and other provisions of the law and administrative regulations.

The time limit for payment stipulated in the preceding paragraph shall be counted on the date of delivery of goods, works and services. It is stipulated in the contract that small and medium-sized enterprises shall issue bills, invoices or other documents as payment terms, and the time limit for payment shall be counted from the date on which the payment documents are delivered.

The "draft for consultation" stipulates the time limit for the return of the premium, and the state organs, public institutions and large enterprises shall, in accordance with the contract, verify and settle the small and medium-sized enterprises in accordance with the contract. If there is no objection to the verification and settlement results, the state organs, public institutions and large enterprises shall return the quality guarantee money within 15 days from the date of verification and settlement.

The draft solicitation proposed to perform its obligations on behalf of the people. In other words, the state organs and institutions should pay funds for small and medium-sized enterprises because of financial difficulties and delays. The competent authorities at the next higher level should undertake the obligation to pay funds for small and medium-sized enterprises on behalf of them.

The draft also mentioned that If a large enterprise abuses market dominant position and coercion small and medium-sized enterprises to accept unreasonable payment period or delays payment for small and medium-sized enterprises, the market supervision and management department shall order correction and impose a fine of 100 thousand yuan to 500 thousand yuan or less.

In addition, the drafting instructions for the draft also mentioned the implementation of the Central Committee's decision on supporting the development of private enterprises and small and medium-sized enterprises, refining the relevant legal system of the promotion law of the small and medium enterprises in People's Republic of China, promoting the payment of small and medium-sized enterprises by state organs, enterprises and large enterprises in a timely manner, and drafted the draft for soliciting contributions.

It involves several aspects. From the point of view of legislation, it refers to the need to promote the development of private economy. The two is the need to implement the SME Promotion Law. The three is to prevent and resolve the need for arrears of small and medium-sized enterprises. From the perspective of legislative drafting principles, we should refine the relevant laws and regulations, safeguard fair trade and safeguard the rights and interests of small and medium-sized enterprises, and draw lessons from foreign legislative experience based on China's national conditions.