Legal provisions of COM(2023)364 - Legal tender of euro banknotes and coins

Please note

This page contains a limited version of this dossier in the EU Monitor.

dossier COM(2023)364 - Legal tender of euro banknotes and coins.
document COM(2023)364 EN
date June 28, 2023


Contents

Article 1 - Subject matter

This Regulation lays down detailed rules on the scope and effects of the legal tender of, and access to, euro banknotes and coins, as provided for, respectively, by Article 128(1) TFEU and by Article 11 of Regulation (EC) No 974/98, in order to ensure its effective use as a single currency.

Article 2 - Scope

1. This Regulation applies to the settlement of pecuniary debts in so far as they are to be settled in cash, in whole or in part, where a payment obligation exists in accordance with the applicable law or established legal practices. To ensure the effectiveness of the legal tender of cash, this Regulation applies also to ex ante unilateral exclusion of payments in cash and to the access to cash.


2. This Regulation shall not apply to payments for goods or services purchased at a distance, including online.

Article 3 - Definitions

For the purposes of this Regulation, the following definitions apply:

1. ‘cash’ means euro banknotes and coins;


2. ‘cash industry’ means credit institutions offering payment accounts to customers and cash service providers involved in the managing of the distribution and circulation of euro banknotes and coins;


3. ‘credit institution’ means a credit institution as defined in Article 4 (1) of Regulation (EU) No 575/2013 19 of the European Parliament and of the Council;


4. ‘ex ante unilateral exclusions of cash’ means a situation when a retailer or service provider unilaterally excludes cash as a payment method for example by introducing a ‘no cash’ sign. In this case, the payer and payee do not freely agree to a means of payment for a purchase;


5. ’payer’ means any person who makes a payment in euro cash;


6. ’payee’ means any person who is the intended recipient of funds which have been the subject of a payment transaction in euro cash;


7. ‘face value’ means the denomination in euros of a euro banknote or coin, as printed on that banknote or minted on that coin;


8. ‘enterprise’ means a person engaged in an economic activity, irrespective of its legal form, including partnerships or associations regularly engaged in an economic activity.

Article 4 - Legal tender

1. The legal tender status of euro banknotes and coins shall entail their mandatory acceptance, at full face value, with the power to discharge from a payment obligation.


2. In accordance with the mandatory acceptance of cash, the payee shall not refuse euro banknotes and/or coins tendered in payment to comply with that obligation.


3. In accordance with the acceptance at full face value of cash, the monetary value of euro banknotes and/or coins tendered in settlement of a debt shall be equal to the amount in euro indicated on the banknotes and/or coins. Surcharges on the settlement of debt with euro banknotes and coins shall be prohibited.


4. In accordance with the power to discharge from a payment obligation, a payer shall be able to discharge from a payment obligation by tendering euro banknotes and coins to the payee.

Article 5 - Exceptions to the principle of mandatory acceptance of euro banknotes and coins

1. By way of derogation from Article 4(2), a payee shall be entitled to refuse euro banknotes and coins in any of the following cases:


(a)where a refusal is made in good faith and where such refusal is based on legitimate and temporary grounds in line with the principle of proportionality in view of concrete circumstances beyond the control of the payee;

(b)where, prior to the payment, the payee has agreed with the payer on a different means of payment.


For the purposes of point (a), the burden of proof to establish that such legitimate and temporary grounds existed in a particular case and that the refusal was proportionate shall be on the payee.


2. For the purposes of the application of paragraph 1, such legitimate grounds may include:


i. Regarding high denomination banknotes, if the value of the banknote tendered is manifestly disproportionate compared to the value of the amount to be settled.

ii. In exceptional cases, if the enterprise has no change available at the moment where the cash is tendered in payment, or if there would be not enough change available as a result of that payment for an enterprise to carry out its normal daily business transactions.

Article 6 - Additional exceptions to the principle of mandatory acceptance of euro banknotes and coins of a monetary law nature

The Commission is empowered to adopt delegated acts in accordance with Article 10 to supplement this Regulation by identifying additional exceptions of a monetary law nature to the principle of mandatory acceptance. Those exceptions shall be justified by an objective of public interest and proportionate to that aim, shall not undermine the effectiveness of the legal tender status of euro cash, and shall only be permitted provided that other means for the payment of monetary debts are available. When preparing those delegated acts, the Commission shall consult the European Central Bank.

Article 7 - Acceptance of payments in cash

1. In order to ensure the acceptance of cash in accordance with Article 4(2), Member States shall monitor the acceptance of payments in cash and the level of ex ante unilateral exclusions of payments in cash throughout their territory, in all their different regions, including urban and non-urban areas, on the basis of the common indicators adopted by the Commission and shall assess the situation.


2. Member States shall notify the results of their monitoring and assessment of the situation as regards the level of acceptance of payments in cash in accordance with Article 9(3).


3. If a Member State considers that the level of acceptance of payments in cash in their territory or parts thereof undermines mandatory acceptance of euro banknotes and coins, it shall set out the remedial measures it commits to take in accordance with Article 9(4).

Article 8 - Access to cash

1. Member States shall ensure sufficient and effective access to cash throughout their territory, in all their different regions, including urban and non-urban areas. In order to ensure sufficient and effective access to cash, Member States shall monitor access to cash throughout their territory, in all their different regions, including urban and non-urban areas, on the basis of the common indicators adopted by the Commission and shall assess the situation.


2. Member States shall notify the results of their monitoring and assessment of the situation as regards access to cash in accordance with Article 9(3).


3. If a Member State considers that sufficient and effective access to cash is not ensured, it shall set out the remedial measures it commits to take in accordance with Article 9(4).

Article 9 - Procedural aspects

1. With a view to implementing the obligations set out in Articles 7 and 8, Member States shall designate one or more national competent authorities with the required powers as regards acceptance of payments in cash and access to cash, and over the cash-related market activities of the cash industry.


2. For the purposes of Articles 7 and 8, the Commission shall adopt implementing acts of general application on a set of common indicators Member States shall use to monitor and assess the acceptance of payments in cash and access to cash throughout their territory, in all their different regions, including urban and non-urban areas. Those implementing acts shall be adopted [within X months after the entry into force of this Regulation] in accordance with the advisory procedure referred to in Article 11. When preparing those implementing acts, the Commission shall consult the European Central Bank.


3. The designated national competent authorities shall notify the results of their monitoring and assessment of the situation as regards the levels of acceptance of payments in cash and access to cash, giving grounds and data for their assessment, in an annual report to be addressed to the Commission and the European Central Bank as referred to in Article 13.


4. If a Member State considers that the level of acceptance of payments in cash undermines mandatory acceptance of euro banknotes and coins or that sufficient and effective access to cash is not ensured, it shall indicate in its annual report the remedial measures it commits to take in order to comply with the obligations set out in Articles 7 and 8. The remedial measures shall enter into force without undue delay.


5. The Commission shall examine the annual reports in close consultation with the European Central Bank. If the remedial measures proposed by a Member State pursuant to paragraph 4 appear insufficient, or if the Commission considers that the acceptance of cash payments or sufficient and effective access to cash in a Member State is not in line with the obligations set out in Articles 7 and 8 despite the findings of the annual report, the Commission shall adopt implementing acts providing for adequate and proportionate measures that shall be adopted by the Member State concerned within the deadline laid down in the respective implementing act. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 11.

Article 10 - Exercise of the delegation

1. The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article.


2. The power to adopt delegated acts referred to in Article 6 shall be conferred on the Commission for an indeterminate period of time from [date of entry into force of this Regulation].


3. The power to adopt delegated acts referred to in Article 6 may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.


4. Before adopting a delegated act, the Commission shall consult experts designated by each Member State in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making.


5. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.


6. A delegated act adopted pursuant to Article 6 shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of one month of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by one month at the initiative of the European Parliament or of the Council.

Article 11 - Committee procedure

1. The Commission shall be assisted by a committee. That committee shall be a committee within the meaning of Regulation (EU) No 182/2011.


2. Where reference is made to this paragraph, Article 4 of Regulation (EU) No 182/2011 shall apply.

Article 12 - Penalties

Member States shall lay down the rules on penalties [including financial penalties and non-criminal fines] applicable to infringements of this Regulation and shall take all measures necessary to ensure that they are implemented. The penalties provided for shall be effective, proportionate and dissuasive. Member States shall, within one year after the entry into force of this Regulation, notify the Commission of those rules and of those measures and shall notify it, without delay, of any subsequent amendment affecting them.

Article 13 - Annual reports

1. Member States shall submit on an annual basis a report to the Commission and the European Central Bank including information on the following aspects:


(a)the established exceptions to the principle of mandatory acceptance and their application;

(b)detailed data and assessment of the situation in the Member State as regards acceptance of payments in cash and access to cash, and the remedial measures to be taken pursuant to Articles 7 and 8;

(c)the implemented penalties including financial penalties and non-criminal fines.


2. The first annual report shall be submitted one year after the entry into force of this Regulation. Subsequent annual reports shall be submitted yearly after the date of the entry into force of this Regulation.


3. The Commission shall examine the annual reports in close consultation with the European Central Bank.

Article 14 - Duty of Member States to inform about remedies

Member States shall provide natural persons and enterprises with clear information on the channels and effective remedies they have at their disposal to lodge complaints with competent national authorities about cases of unlawful refusal to accept cash and insufficient and ineffective access to cash.

Article 15 - Interaction between euro banknotes and coins and the digital euro

1. Euro banknotes and coins and the digital euro shall be convertible into each other at par.


2. Payees of a monetary debt denominated in euro shall accept payments in euro banknotes and coins according to the provisions of this Regulation, irrespective of whether they accept payments in digital euro in accordance with Regulation [XXX on the establishment of the digital euro]. Where the acceptance of euro banknotes and coins and the digital euro is mandatory in accordance with the provisions of this Regulation and Regulation (XXX on the establishment on the Digital Euro), the payer is entitled to choose the means of payment

Article 16 - Review

By [date-five years after the entry into force], the Commission shall carry out a review on the operation and effects of this Regulation and submit a report to the European Parliament and to the Council. Member States shall provide the Commission with necessary information for the preparation of that report.

Article 17 - Entry into force

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.


This Regulation shall be binding in its entirety and directly applicable in the Member States in accordance with the Treaties.