ECJ: Public authorities may refuse cash payment

Feb 10, 2021 Benn-Ibler Rechtsanwälte

The European Court of Justice (ECJ) has ruled that the public administration can refuse cash as a payment option for reasons of public interest.

In the case at hand, two German citizens were obliged to pay the broadcasting fee. They offered the Hessischer Rundfunk payment in cash, which the latter refused. The statutes of the Hessischer Rundfunk stipulate that only bank transfer is permissible as a means of payment and served the two with a payment notice including a surcharge for late payment. They appealed against this decision. They were of the opinion that the statute violated Sec. 14 (1) of the German Federal Bank Act (Gesetz über die deutsche Bundesbank, BBankG), according to which euro banknotes are the only unrestricted legal tender.

The German Supreme Administrative Court (Bundesverwaltungsgericht) referred the case to the ECJ for a preliminary ruling. It had concerns as to whether Sec. 14 (1) BBankG was in line with the exclusive competence of the Union in the area of monetary policy.

First, the ECJ held that the exclusive competence of the Union in matters of monetary policy means that euro Member States may not adopt or maintain any rule which, having regard to its content and objective, determines the legal form of the status of euro banknotes as legal tender. However, a Member State is not prevented, within the limits of its own competence, from adopting a rule that a sovereign monetary obligation cannot be paid for with euro banknotes if

• This does not legally or factually lead to an abolition of these banknotes by undermining the possibility to fulfill a monetary obligation with cash as a rule,
• This regulation was adopted for reasons of public interest,
• The restriction on cash payments is appropriate to achieve the public interest pursued, and
• Other legal means are available to fulfill the cash benefit obligation.

The ECJ added that a restriction on cash payments may be justified on public interest grounds if the number of contributors from whom dues are to be collected is very high.

ECJ C-422/19, C-423/19 (26.01.2021)