Press release no. 23/2019 of 28 March 2019

CJEU requested to clarify questions on the obligation to accept euro banknotes

The Federal Administrative Court (Bundesverwaltungsgericht) referred to the Court of Justice of the European Union (CJEU) questions on the interpretation of the term "legal tender" under EU law and on the scope of the exclusive competence that the European Union enjoys in the area of monetary policy.


As owners of dwellings, both claimants to the main proceedings are liable to pay the public broadcasting licence fee (Rundfunkbeitrag). They challenge the fixing of overdue public broadcasting licence fees by the defendant, the Hesse Broadcasting Corporation (Hessischer Rundfunk) and, subsidiary, they seek a declaration establishing that they are entitled to pay the public broadcasting licence fees in cash. Each time, the defendant refused payment in cash by the claimant by referring to the By-law on Licence Fees (Beitragssatzung). The provisions therein stipulate that payment of the public broadcasting licence fee may only be made by direct debit, individual transfer or standing order. The actions brought in the lower courts were not successful.


The decision on the appeals on points of law lodged by the claimants requires clarification of the question whether the adoption of euro banknotes as legal tender in article 128 (1) of the Treaty on the Functioning of the European Union - TFEU - and other provisions of EU law contain a prohibition precluding public bodies of a Member State from refusing fulfilment of a statutorily imposed payment obligation in such banknotes, or whether EU law leaves room for provisions that exclude payment in euro banknotes for certain statutorily imposed payment obligations.


In addition, the CJEU is requested to clarify, whether the exclusive competence that the European Union enjoys in the area of monetary policy for the Member States, whose currency is the euro (article 2 (1) in conjunction with article 3 (1) (c) TFEU), precludes a legal act of one of those Member States that provides for an obligation on the part of public bodies of the Member State to accept euro banknotes in the fulfilment of statutorily imposed payment obligations. In disagreeing with the lower courts, the Federal Administrative Court is of the opinion that section 14 (1) second sentence of the Bundesbank Act (BBankG, Gesetz über die Deutsche Bundesbank), pursuant to which banknotes denominated in euro shall be the sole unrestricted legal tender, governs such an obligation to accept euro banknotes. However, this federal law provision does not cause the exclusion of payments in cash under the defendant's By-law on Licence Fees to be unlawful, except where the exclusive competence which the European Union enjoys in the area of monetary policy allows for legislative powers on the part of Member States to establish the legal consequences of the qualification of euro banknotes as legal tender.


The Federal Administrative Court suspended the proceedings on appeal on points of law until the Court of Justice has given its ruling.


Footnote:

The questions referred for a preliminary ruling read as follows:


1. Does the exclusive competence that the European Union, pursuant to article 2 (1) TFEU, in conjunction with article 3 (1) (c) TFEU, enjoys in the area of monetary policy for the Member States whose currency is the euro preclude a legal act of one of those Member States that provides for an obligation on the part of public bodies of the Member State to accept euro banknotes in the fulfilment of statutorily imposed payment obligations?


2. Does the status as legal tender of banknotes denominated in euro, as established in article 128 (1) third sentence TFEU, article 16 (1) third sentence of Protocol (No 4) on the statute of the European System of Central Banks and of the European Central Bank and article 10 second sentence of Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro contain a prohibition precluding public bodies of a Member State from refusing fulfilment of a statutorily imposed payment obligation in such banknotes, or does EU law leave room for provisions that exclude payment in euro banknotes for certain statutorily imposed payment obligations?


3. If question 1 is answered in the affirmative and question 2 is answered in the negative: Can a legal act of a Member State whose currency is the euro which is adopted in the context of the European Union's exclusive competence in the area of monetary policy be applied to the extent to which, and for so long as, the European Union has not made use of its competence?


BVerwG 6 C 5.18 - decision of 27 March 2019

BVerwG 6 C 6.18 - decision of 27 March 2019


Decision of 27 March 2019 -
BVerwG 6 C 6.18ECLI:DE:BVerwG:2019:270319B6C6.18.0


Please note that the official language of proceedings brought before the Federal Administrative Court of Germany, including its rulings, is German. This translation is based on an edited version of the original ruling. It is provided for the reader’s convenience and information only. Please note that only the German version is authoritative. Page numbers in citations have been retained from the original and may not match the pagination in the English version of the cited text. Numbers of paragraphs that have completely been omitted in the edited version will not be shown.
When citing this ruling it is recommended to indicate the court, the date of the ruling, the case number and the paragraph: BVerwG, decision of 27 March 2019 - 6 C 6.18 - para. 16.

Request for a preliminary ruling seeking clarification on the obligation to accept euro banknotes

Headnotes

1. Section 14 (1) second sentence BBankG provides for an obligation on the part of public bodies to accept euro banknotes in the fulfilment of statutorily imposed payment obligations. Exceptions may not be well based on grounds of administrative practicability or cost saving, but require an authorisation under federal law.

2. Whether section 14 (1) second sentence BBankG is consistent with the exclusive competence that the European Union enjoys in the area of monetary policy (article 2 (1) in conjunction with article 3 (1) (c) TFEU), whether article 128 (1) third sentence TFEU or other provisions of applicable substantive EU law contain a prohibition precluding public bodies of a Member State from refusing fulfilment of a statutorily imposed payment obligation in euro banknotes and whether section 14 (1) second sentence BBankG can be applied to the extent to which and for so long as the European Union has not made use of the exclusive competence it may enjoy, needs to be clarified by the Court of Justice of the European Union.

A preliminary ruling of the Court of Justice of the European Union is obtained on the following questions:

1. Does the exclusive competence that the European Union, pursuant to article 2 (1) TFEU, in conjunction with article 3 (1) (c) TFEU, enjoys in the area of monetary policy for the Member States whose currency is the euro preclude a legal act of one of those Member States that provides for an obligation on the part of public bodies of the Member State to accept euro banknotes in the fulfilment of statutorily imposed payment obligations?

2. Does the status as legal tender of banknotes denominated in euro, as established in article 128 (1) third sentence TFEU, article 16 (1) third sentence of Protocol (No 4) on the statute of the European System of Central Banks and of the European Central Bank and article 10 second sentence of Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro contain a prohibition precluding public bodies of a Member State from refusing fulfilment of a statutorily imposed payment obligation in such banknotes, or does EU law leave room for provisions that exclude payment in euro banknotes for certain statutorily imposed payment obligations?

3. If question 1 is answered in the affirmative and question 2 is answered in the negative: Can a legal act of a Member State whose currency is the euro which is adopted in the context of the European Union's exclusive competence in the area of monetary policy be applied to the extent to which, and for so long as, the European Union has not made use of its competence?

  • Sources of law
    Treaty on the Functioning of the European Union (TFEU)articles 2 (1) and (6), 3 (1) (c), 128 (1), 133, 267, 288 (5)
    Statute of the ESCB and of the ECBarticle 16 (1)
    Regulation (EC) No 974/98article 10 second sentence
    Basic LawGG, Grundgesetzarticle 31
    German Civil CodeBGB, Bürgerliches Gesetzbuchsections 286, 293
    Bundesbank ActBBankG, Gesetz über die Deutsche Bundesbanksection 14 (1)
    State Treaty of the Federal States on Public Broadcasting Licence FeesRBStV, Rundfunkbeitragsstaatsvertragsections 2 (1), 7 (3), 9 (2), 10
    By-law of the Hesse Broadcasting Corporation on Licence FeesBeitragssatzung des Hessischen Rundfunkssection 10 (2)

Reasons

I

1 The claimant is the owner of a dwelling located in the region of the defendant, a federal state public broadcasting institution (Landesrundfunkanstalt) governed by public law. Referring to the By-law on Licence Fees (Beitragssatzung), the defendant refused to accept payment in cash of the public broadcasting licence fee (Rundfunkbeitrag) as offered by the claimant. The provisions therein specify that the public broadcasting licence fee may be paid only by way of cashless payment, that is by direct debit, individual transfer or standing order. By notice of 21 April 2016, the defendant fixed overdue public broadcasting licence fees for the first quarter of 2016 in the amount of EUR 52.50. By objection notice of 24 May 2016, the defendant rejected the objection filed by the claimant.

2 The claimant brought an action seeking to have annulled the notice of 21 April 2016 fixing the public broadcasting licence fee, as amended by the objection notice of 24 May 2016, subsidiary, seeking a declaration establishing that he is entitled to pay such public broadcasting licence fees to the Beitragsservice (a joint organisation of Germany's public broadcasting institutions) in cash and further subsidiary, seeking a declaration to the effect that his licence fees due for the year 2015 in the amount of EUR 214.94 had been discharged by having deposited such amount with the Frankfurt am Main Local Court (Amtsgericht). By judgment of 31 October 2016, the Administrative Court (Verwaltungsgericht) dismissed the action. By judgment of 13 February 2018, the Higher Administrative Court (Verwaltungsgerichtshof) dismissed the appeal on points of fact and law brought by the claimant.

3 By appeal on points of law, the claimant continues to pursue his request. In support of his appeal, he does in essence rely on the following arguments: section 14 (1) second sentence of the Bundesbank Act (BBankG, Gesetz über die Deutsche Bundesbank) and article 128 (1) third sentence of the Treaty on the Functioning of the European Union (TFEU), each make provision for an unconditional and unrestricted obligation to accept euro banknotes as a means for the settlement of monetary debts. Such obligation could not be restricted but by contractual agreement between the parties or on the basis of an authorisation under federal or EU law. This applied even where - in the context of mass procedures - there are reasons of practicability speaking in favour of the exclusion of cash payments.

II

4 The proceedings must be suspended and referred for a preliminary ruling as their outcome depends on a decision to be obtained from the Court of Justice of the European Union (CJEU) on the interpretation of the Treaties (article 267 TFEU).

5 Measured against national law, the appeal on points of law would meet with success. Accordingly, the notices challenged with the main application are unlawful as the exclusion of paying the public broadcasting licence fees by euro banknotes under the defendant's By-law on Licence Fees is in violation of the federal law provision of section 14 (1) second sentence BBankG, which provides for an obligation on the part of public bodies to accept euro banknotes in the fulfilment of statutorily imposed payment obligations (1.). However, without obtaining a preliminary ruling of the Court of Justice of the European Union, the Senate cannot establish, whether section 14 (1) second sentence BBankG is consistent with the exclusive competence the European Union enjoys in the area of monetary policy for those Member States whose currency is the euro pursuant to article 2 (1) in conjunction with article 3 (1) (c) and article 127 et seqq. TFEU (2). This question would only be irrelevant for the decision, if either EU law contained a rule corresponding to the one under section 14 (1) second sentence BBankG providing for an obligation to accept euro banknotes (3.) or if section 14 (1) second sentence BBankG could be applied even where Member States lacked competence to the extent to which and as long as the European Union had not made use of its competence (4.). However, these additional questions cannot be conclusively clarified without obtaining a preliminary ruling of the Court of Justice of the European Union either.

6 1. Pursuant to national law, both, the defendant's notice of 21 April 2016 fixing the licence fees and the objection notice of 24 May 2016, which the claimant seeks to have annulled by filing his main application, prove to be unlawful.

7 a) The judicial review programme principally stems from the provisions of the Basic Law for the Federal Republic of Germany (GG, Grundgesetz), the German Civil Code (BGB, Bürgerliches Gesetzbuch) in the version promulgated on 2 January 2002 (Federal Law Gazette (BGBl., Bundesgesetzblatt) I p. 42, corrected p. 2909 and 2003 I, p. 738) at the relevant time in this case, that is, the time of issuance of the challenged notices of the defendant, last amended by the Act of 11 March 2016 (BGBl. I p. 396), the Bundesbank Act (BBankG) in the version promulgated on 22 October 1992 (BGBl. I p. 1782), last amended by the Act of 4 July 2013 (BGBl. I p. 1981), State Treaty of the Federal States on Public Broadcasting Licence Fees (article 1 of the Fifteenth Amending State Treaty of the State Treaty of the Federal States on Public Broadcasting; RBStV, Rundfunkbeitragsstaatsvertrag), which the Federal State of Hesse approved by Act of 23 August 2011 (Law and Ordinance Gazette (GVBl., Gesetz- und Verordnungsblatt) I p. 382) as well as the By-law of the Hesse Broadcasting Corporation on the Proceedings Relating to the Payment of Broadcasting Licence Fees of 5 December 2012 (State Gazette (StAnz., Staatsanzeiger) no. 51-52/2012, p. 1434, hereinafter By-law on Licence Fees).

8 Article 31 GG reads as follows:
Federal law shall take precedence over federal state law.

9 Section 286 BGB reads as follows:
(1) If the obligor, following a warning notice from the obligee that is made after performance is due, fails to perform, he or she shall be in default as a result of the warning notice. (...)
(2) There is no need for a warning notice if
1. a period of time according to the calendar has been specified for such performance,
(...)

10 Section 293 BGB reads as follows:
The obligee is in default if he or she does not accept the performance offered to him or her.

11 Section 294 BGB reads as follows:
The obligee must actually be offered performance exactly as it is to be rendered.

12 Section 295 BGB reads as follows:
A verbal offer by the obligor suffices if the obligee has declared to him or her that he or she will not accept the performance, or if effecting the performance requires an act by the obligee, in particular if the obligee must collect the thing owed. Equivalent to an offer of performance is a demand to the obligee to undertake the action required. (...)

13 Section 14 (1) BBankG reads as follows:
Without prejudice to article 128 (1) of the Treaty on the Functioning of the European Union, the Deutsche Bundesbank has the sole right to issue banknotes in the area in which this Act is law. Banknotes denominated in euro are the sole unrestricted legal tender. (...)

14 Section 2 (1) RBStV reads as follows:
In private matters, the owner of a dwelling (obligor of the licence fee (Beitragsschuldner)) is liable to pay a public broadcasting licence fee.

15 Section 7 (3) RBStV reads as follows:
The public broadcasting licence fee is due monthly. It must be paid halfway through a three-months period, each time for three months.

16 Section 9 (2) RBStV reads as follows:
The competent federal state public broadcasting institution is authorised to establish rules detailing the proceedings relating to
(...)
2. the payment of such public broadcasting licence fee, exemption from the obligation to pay such public broadcasting licence fee or any reduction thereof,
(...)
by means of by-law. (...)

17 Section 10 RBStV reads as follows:
(...)
(2) The public broadcasting licence fee must be paid to the competent federal state public broadcasting institution as an obligation to be performed at the debtor's place (Schickschuld). (...)
(...)
(5) Overdue public broadcasting licence fees are fixed by the competent federal state public broadcasting institution. (...)

18 Section 10 (2) of the By-law on Licence Fees reads as follows:
The obligor of a licence fee shall be allowed to pay the public broadcasting licence fees only by making use of the following cashless means:
1. Authorisation to draw funds by way of direct debit and, henceforth, SEPA Direct Debit respectively,
2. individual transfer,
3. standing order,

19 b) Based solely on the aforementioned national law provisions, the requirements for issuing the defendant's notice of 21 April 2016, fixing the licence fee, were not met. When disregarding EU law, the licence fees so fixed were not overdue within the meaning of section 10 (5) first sentence RBStV as the debtor was not in default (Schuldnerverzug) within the meaning of the common legal concept contained in section 286 et seqq. BGB.

20 It is true that, as the owner of a dwelling within the meaning of section 2 (1) RBStV, the claimant was liable to pay the public broadcasting licence fee. The public broadcasting licence fee which, in private matters links to dwellings, is in essence compatible with the Basic Law (Federal Constitutional Court (BVerfG, Bundesverfassungsgericht), judgment of 18 July 2018 - 1 BvR 1675/16 et al. - (...) para. 49 et seqq.). The claimant's licence fees for the period from 1 January 2016 to 31 March 2016 were due on 15 February 2016 as, pursuant to section 7 (3) RBStV, the public broadcasting licence fee was due halfway through a three-months period, each time for three months. As the period of time for performance is at least indirectly specified according to the calendar, there was no need for a warning notice regarding the occurrence of the default (see section 286 (2) no. 1 BGB).

21 However, at the time the challenged notices were issued, the defendant was in default of accepting (Annahmeverzug) the performance offered to him so precluding the obligor's default (section 293 BGB). According to the findings of the Higher Administrative Court, he refused to accept the claimant's offer to pay the public broadcasting licence fees by way of payment in cash. Failure to accept such payment was not justified on the grounds that, on account of the exclusion of payments in cash under section 10 (2) of the By-law on Licence Fees, the claimant had failed to offer a proper way of payment (sections 294, 295 first sentence BGB). For, the exclusion of payments in cash under section 10 (2) of the By-law on Licence Fees, which is based on the federal state law authorisation under section 9 (2) first sentence no. 2 RBStV, is in violation of the federal law rule under section 14 (1) second sentence BBankG and - when disregarding EU law - is therefore ineffective.

22 Section 14 (1) second sentence BBankG provides for an obligation on the part of public bodies to accept euro banknotes in the fulfilment of statutorily imposed payment obligations. Contrary to the reasoning relied on by the Higher Administrative Court, exceptions may not be well based on grounds of administrative practicability or cost saving, but require a federal law authorisation. It is true, that this does not already follow from the wording of the provision. However, systematic considerations and especially the legislative history as well as the spirit and purpose of the provision suggest that the status as legal tender within the meaning of section 14 (1) second sentence BBankG is associated with an obligation to accept euro banknotes in the repayment of monetary debt.

23 In the context of a systematic interpretation, particular importance is to be accorded to the fact that those federal law rules excluding or restricting the possibility of making cash payments to state bodies (see e.g. section 224 (4) first sentence Fiscal Code (AO, Abgabenordnung) or section 13 (1) second sentence no. 1 Motor Vehicle Tax Act (KraftStG, Kraftfahrzeugsteuergesetz) would, to a large extent, be of no avail, had section 14 (1) second sentence BBankG well allowed for a preclusion of the possibility to fulfil statutorily imposed payment obligations with euro banknotes on the grounds of facilitating administrative proceedings and of administrative practicability.

24 The legislative materials clearly indicate that the concept of "legal tender" was associated with the idea that, as a general principle, such tender had to be accepted by each and every obligee of any monetary debt. With respect to section 10, the later section 14 of an Bundesbank Act, the explanatory memorandum to the draft elaborates that "notes of the Bundesbank shall have to be accepted in an unlimited amount" (Bundestag printed paper (BT-Drs., Bundestagsdrucksache) 2/2781 p. 34). In this respect, there have been no changes resulting from the amendment of the wording of section 14 (1) second sentence BBankG by Act on the Amendment of Monetary Law Provisions in Consequence of the Introduction of Euro Cash of 16 December 1999 (BGBl I p. 2402). In fact, the explanatory memorandum to the Federal Government's draft keeps assuming an "obligation to accept for everyone" as a characteristic of a legal tender (BT-Drs. 14/1673 p. 9).

25 The teleological interpretation of section 14 (1) second sentence BBankG also leads to the result that public bodies must accept euro banknotes in fulfilling statutorily imposed payment obligations. This obligation primarily serves to ensure the proper functioning of monetary transactions by ensuring the acceptance of euro cash and thus its function as a means of payment (...). A general preclusion of the acceptance of euro banknotes when levying certain public charges may have a negative impact on this objective. The fact that a monetary debt may also be fulfilled by paying with "deposit money" where the parties have - even tacitly - so agreed, (see Federal Court of Justice (BGH, Bundesgerichtshof) judgments of 25 March 1983 - V ZR 168/81 - Rulings of the Federal Court of Justice in Civil Matters (BGHZ, Entscheidungen des Bundesgerichtshof in Zivilsachen) 87, 156 <163>, of 5 May 1986 - II ZR 150/85 - BGHZ 98, 24 <29 et seq.> and of 20 May 2010 - Xa ZR 68/09 - BGHZ 185, 359 para. 29), is not contrary to the aforesaid. The power of the parties to dispose over the suitable means for the fulfilment of monetary debt has its legal basis in their private autonomy as guaranteed under constitutional law. The power of public bodies to refuse acceptance of euro banknotes in the fulfilment of statutorily imposed payment obligations on the grounds of facilitating administrative proceedings cannot be based thereon.

26 The obligation to accept euro banknotes under section 14 (1) second sentence BBankG does also and in particular apply in mass procedures such as the levying of the public broadcasting licence fee. There is nothing indicating that the option of paying the public broadcasting licence fee in cash could jeopardise the financial resources of the public broadcasting institutions to a point where they would no longer meet the requirements under constitutional law (see on this BVerfG, judgment of 11 September 2007 - 1 BvR 2270/05 et al. - Rulings of the Federal Constitutional Court (BVerfGE, Entscheidungen des Bundesverfassungsgerichts) 119,181 <218 et seqq.>). The fact that the costs associated with the acceptance of cash may increase the public broadcasting licence fee and thus may also burden those obliged to pay the licence fee who do not make use of the option to pay in cash, must be accepted on the basis of the situation under the national law. The rule established under the federal law provision of section 14 (1) second sentence BBankG could only be invalidated by an equivalent federal law provision. Due to the precedence of federal law (article 31 GG) and in the absence of any basis for authorisation transferred under federal law (see e.g. section 1 (1) of the Act on Payment Transactions with Courts and Judicial Authorities (Gesetz über den Zahlungsverkehr mit Gerichten und Justizbehörden)), precluding the possibility to pay with euro banknotes cannot be based on a federal state law provision such as section 10 (2) of the By-law on Licence Fees or section 9 (2 ) first sentence in conjunction with section 10 (7) second sentence RBStV.

27 2. However, the appeal on points of law against the judgment on appeal on points of fact and law must be dismissed if section 14 (1) second sentence BBankG itself is not consistent with the exclusive competence the European Union enjoys in the area of monetary policy. This question cannot be clarified without obtaining a preliminary ruling of the Court of Justice of the European Union.

28 Pursuant to article 3 (1) (c) TFEU, the European Union enjoys exclusive competence in the area of monetary policy for the Member States whose currency is the euro. Article 2 (1) TFEU therefore provides that only the European Union may legislate and adopt legally binding acts in this area; Member States may only act if they are empowered to do so by the European Union or for the implementation of EU acts. Pursuant to article 2 (6) TFEU, the scope of and the arrangement for exercising the European Union's competences shall be determined by the provisions of the Treaties relating to each area. In this respect, in the area of monetary policy, one must refer primarily to article 127 et seqq. TFEU.

29 The content of the term "monetary policy" mentioned in article 3 (1) (c) TFEU and thus the scope of the exclusive competence enjoyed by the European Union has not yet been conclusively clarified. According to the case-law of the Court of Justice of the European Union (see CJEU, judgments of 27 November 2012 - C-370/12 [ECLI:EU:C:2012:756], Pringle - para. 53 et seqq., of 16 June 2015 - C-62/14 [ECLI:EU:C:2015:400], Gauweiler et al. - para. 42 et seqq. and of 11 December 2018 - C-493/17 [ECLI:EU:C:2018:1000], Weiss et al., para. 50 et seqq.), the Treaty on the Functioning of the European Union does not contain a precise definition of monetary policy but concurrently lays down both the objectives of monetary policy and the instruments which are available to the European System of Central Banks (ESCB) for the purpose of implementing that policy. Pursuant to article 127 (1) TFEU and article 282 (2) TFEU, the primary objective of European Union's monetary policy is to maintain price stability. Instruments for maintaining price stability include, for example, setting key interest rates for the euro area as well as issuing euro currency (CJEU, judgment of 27 November 2012 - C370/12, Pringle - para 96). In addition, Chapter IV of the Protocol on the ESCB and the European Central Bank (ECB) sets out the instruments to which the ESCB may have recourse in the framework of monetary policy (CJEU, judgments of 16 June 2015 - C-62/14, Gauweiler et al. - para. 45 and of 11 December 2018 - 493/17, Weiss et al. - para. 52). Finally, the Court of Justice has made clear that the fact that a measure may have indirect effects on the stability of the euro is not sufficient for it to be classified as a monetary policy measure (CJEU, judgments of 27 November 2012 - C-370/12, Pringle - para. 56, 97 and of 16 June 2015 - C 62/14, Gauweiler et al. - para. 52).

30 On the basis of this case-law, the Senate cannot conclusively determine whether the exclusive competence enjoyed by the European Union in the area of monetary policy extends to establishing the legal consequences associated with the status of euro banknotes as legal tender, such as, in particular, providing for an obligation on the part of public bodies to accept euro banknotes, and whether, therefore, under article 2 (1) TFEU, there is a blocking effect on Member States legislation in that regard. On the one hand, the above obligation does neither concern the objective of maintaining price stability, nor is it directly related to the instruments set out in primary law to achieve those objectives. In particular, it does not provide for any restriction or modification of the right to issue euro banknotes conferred on the European Central Bank and on the national central banks under article 128 (1) TFEU. On the other hand, the case-law of the Court of Justice leaves room for the assumption that rules designed to ensure the acceptance of euro banknotes as legal tender and thus the functioning of monetary transactions also belong in the area of monetary policy. In any event, one cannot rule out that such a legal act could be based on article 133 TFEU as a measure necessary for the use of the euro as the single currency and that, therefore, the European Union must be presumed to enjoy exclusive competence pursuant to article 2 (1) and (6) TFEU in that regard as well.

31 3. However, the question whether the German legislature had competence to adopt a provision such as section 14 (1) second sentence BBankG on account of the exclusive competence enjoyed by the European Union in the area of monetary policy, does not arise if the applicable substantive EU law already prohibits public bodies of a Member State from refusing to accept euro banknotes in the fulfilment of a statutorily imposed payment obligation. For, in this case, section 10 (2) of the By-law on Licence Fees would be unlawful for breach of higher-ranking law, resulting in that the claimant's appeal would have to be granted. However, the question, whether existing primary or secondary EU law precludes such rules that exclude payment by euro banknotes for certain statutorily imposed payment obligations, cannot be answered with sufficient certainty without obtaining a preliminary ruling of the Court of Justice of the European Union.

32 Pursuant to article 128 (1) third sentence TFEU and the identically worded article 16 (1) third sentence of Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Bank, the banknotes issued by the European Central Bank and the national central banks shall be the only such notes to have the status of legal tender within the Union. Furthermore - at secondary law level - article 10 second sentence of Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro (OJ L 139 p. 1) provides that, without prejudice to article 15 of that Regulation, that is to say, after the end of the transitional period, banknotes denominated in euro shall be the only banknotes which have the status of legal tender in all participating Member States. As already explained for German law, the term "legal tender" does not necessarily imply an obligation to accept banknotes denominated in euro. The term is defined neither in the relevant primary law provisions of the Treaty on the Functioning of the European Union or the Statute of the ESCB and of the ECB nor in Regulation (EC) No 974/98. Recital 19 of that Regulation merely indicates that the European Union legislature does not consider restrictions on the possibility to make cash payments to necessarily affect the status of legal tender of euro cash. According to the recital, limitations on payments in banknotes and coins, established by Member States for public reasons, are not incompatible with the status of legal tender of euro banknotes and coins, provided that other lawful means of payment for the settlement of monetary debts are available.

33 The relevance of the Commission Recommendation (2010/191/EU) of 22 March 2010 on the scope and effects of legal tender status of euro banknotes and coins (OJ L 83 p. 70) is also unclear in this context. Whilst no. 1 of this Recommendation is entitled "Common definition of legal tender". According to no. 1 (a) of the Recommendation, one of the features that the status of euro banknotes and coins as legal tender should include when a payment obligation exists, is "mandatory acceptance". On this point, the Recommendation states and explains: "The creditor of a payment obligation cannot refuse euro banknotes and coins unless the parties have agreed on other means of payment." As a further characteristic of the common definition of legal tender, no. 1 (c) of the Recommendation refers to the "power to discharge from payment obligations". On this point a statement and explanation is made to the effect that: "A debtor can discharge himself from a payment obligation by tendering euro banknotes and coins to the creditor." According to no. 2 and 3 of this Recommendation, exceptions to the rule requiring acceptance of euro banknotes should be possible in retail transactions, "if grounded on reasons related to the 'good faith principle'", for example, where the retailer has no change available, where banknotes in high denominations are tendered or where the face value of the banknote tendered is disproportionate compared to the amount owed to the creditor of the payment. The Recommendation does not mention any other exceptions to mandatory acceptance, in particular none for statutorily imposed payment obligations.

34 However, it should be emphasised that, pursuant to article 288 (5) TFEU, recommendations made by institutions of the European Union are not binding. Although, according to the case-law of the Court of Justice of the European Union, national courts are bound to take recommendations into consideration for the purpose of deciding disputes submitted to them, in particular where the recommendations cast light on the interpretation of national provisions adopted in order to implement them or where they are designed to supplement binding EU provisions, departing from such recommendation remains permissible on grounds related to the facts of the individual case (CJEU, judgment of 15 September 2016 - C-28/15 [ECLI:EU:C:2016:692], KPN - para. 41 et seq.).

35 Moreover, the legislative history of Commission Recommendation (2010/191/EU) of 22 March 2010 shows that there was an intention to avoid the adoption of a formal legal act. According to its recital 4, the Recommendation is based on the main conclusions of a report prepared by a working group consisting of representatives from ministries of finance and national central banks of the euro area. This report, entitled "Report of the Euro Legal Tender Expert Group (ELTEG) on the definition, scope and effects of legal tender of euro banknotes and coins" (http://ec.europa.eu/economy_finance/articles/euro/documents/elteg_en.pdf), states that there is disagreement as to whether the European Union enjoys exclusive competence - which it has not yet exercised - to establish a common definition of legal tender and the resulting effects, or whether the national legislatures have legislative competence in that regard. For this reason, the Report does not recommend the adoption of legally binding rules, such as by amending Regulation (EC) No 974/98, but merely suggests the issuance of a Commission recommendation as a "soft law" approach. This background also speaks against attaching decisive importance to the Recommendation for the interpretation of the term "legal tender" within the meaning of the above mentioned provisions of primary and secondary EU law. Otherwise, it would also be incomprehensible for the Commission to announce in recital 5 of the Recommendation (2010/191/EU) that there will be a review of the implementation of that Recommendation three years after its adoption and that there will be an assessment whether regulatory measures are necessary. Such measures have not been adopted so far.

36 In view of the fact that in recital 3 of Recommendation (2010/191/EU) of 22 March 2010, the Commission itself identifies "some uncertainty" in the euro area with regard to the scope of legal tender and the resulting effects, the question whether the applicable EU law provides for an obligation on the part of public bodies of a Member State to accept euro banknotes in the fulfilment of statutorily imposed monetary obligations and which exceptions it allows, if any, can ultimately only be clarified by the Court of Justice of the European Union.

37 4. The relevance for the decision of the first question, whether the German legislature had competence to adopt section 14 (1) second sentence BBankG owing to the exclusive competence enjoyed by the European Union in the area of monetary policy, must also be answered in the negative if, despite the fact that the applicable substantive EU law does not contain an obligation to accept euro banknotes in the fulfilment of statutorily imposed payment obligations, a national provision having that content may nevertheless be applied to the extent to which and as long as the European Union has not made conclusive use of its exclusive competence, as suggested by the above mentioned Commission Recommendation of 22 March 2010. In the absence of any established case-law, this additional question also needs clarification by the Court of Justice of the European Union.

38 It is true that article 2 (1) TFEU provides that, in an area for which the Treaties confer exclusive competence on the European Union, the Member States are able to legislate only if so empowered by the European Union or for the implementation of EU acts. In addition, it has long been established in the case-law of the Court of Justice that EU law takes precedence over legislative acts of the Member States (see CJEU, judgment of 15 July 1964 - Case 6/64 [ECLI:EU:C:1964:66], Costa/ENEL - (...)). It has also been established that, in accordance with the principle of the precedence of EU law, the relationship between provisions of the Treaty and the directly applicable measures of the institutions of the European Union on the one hand and the national law of the Member States on the other is such that those provisions and measures, solely by their entry into force, render automatically inapplicable any conflicting provision of current national law and preclude the valid adoption of new national legislative acts to the extent to which they would be incompatible with provisions of EU law (see CJEU, judgment of 9 March 1978 - Case 106/77 [ECLI:EU:C:1978:49], Simmenthal - para. 17/18). However, the fundamental decisions of the Court of Justice on the precedence of EU law relate to such cases where a national legal act is incompatible with a substantive provision of primary or secondary EU law. The existing case-law does however not provide the certainty required to waive referral pursuant to article 267 (3) TFEU as to whether a national legal act may already not be applied where, in the absence of legislative action by the European Union, it has been adopted merely in breach of the blocking effect on account of the exclusive competence the European Union enjoys.