EU client not paying a business in Poland: what you can do
If a business in another EU country pays late, check which law governs the contract and your interest claim, then consider an account preservation order.
When a customer in another EU country does not pay on time, first establish which law governs the contract and whether you can claim late-payment interest. If there is a risk that the debtor will move, conceal or spend the money, look at the European Account Preservation Order. Below are both steps as described by the Your Europe portal.
Late payment: first check which law governs the contract
Sold goods or provided services to a business in another EU country, but payment is late? First check which law governs your contract. Do not automatically assume Polish law applies.
As Your Europe explains, contracts are governed by the law chosen by the parties. If no choice was made when signing the contract, late-payment rules are governed by the law of the creditor’s country of habitual residence. This applies to both sales of goods and provision of services. If the contract is governed by non-EU law, the rules below may not apply.
You can claim late-payment interest if you have fulfilled your contractual and legal obligations and the customer is responsible for the delay, meaning it is not caused by circumstances beyond their control. Interest can be claimed from the first day after the contractual payment deadline.
These rules do not apply to insolvency proceedings, including debt restructuring, or to compensation payments, for example by insurers.
European Account Preservation Order
A European Account Preservation Order allows a court to freeze funds in a debtor’s bank account in a cross-border case. It safeguards money against being transferred, concealed or spent. Freezing funds does not itself mean obtaining payment.
When does it apply?
According to Your Europe, a case is cross-border when either the court issuing the order or your business, as creditor, is based in a different EU country from the one where the debtor holds the bank account. The procedure is available in all EU countries except Denmark.
You do not need to notify the debtor before starting the procedure. This helps prevent money from being moved or spent before you recover the debt.
Documents and challenges
Applications are submitted using a form available online. You must attach all documents supporting your claim.
The debtor may challenge an order issued against them. Both parties may also appeal the decision on the remedy sought.