Opinion of the Advocate General — ECLI:EU:C:2020:931
Date: 2020-11-18
Language of the case: Bulgarian
Subject matter: Approximation of laws
Procedure: Reference for a preliminary ruling
Origin: Bulgaria

Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged:  
9 July 2019 
Referring court:  
Administrative Court of Blagoevgrad (Bulgaria) 
Date of the decision to refer: 
5 July 2019  
Appellant in the appeal in cassation: 
‘ECOTEX BULGARIA’ EOOD 
Respondent in the appeal in cassation: 
Teritorialna direktsia na Natsionalnata agentsia za prihodite, Sofia  
  
Subject matter of the main proceedings 
Appeal in cassation proceedings concerning an administrative penalty — financial 
sanction — imposed on the appellant in the appeal in cassation for an 
infringement of the cash payment restriction pursuant to Article 3(1) No 1 of the 
Zakon za ogranichavane na plashtaniyata v broi (Law on the restriction of cash 
payments). 
Subject matter and legal basis of the reference 
Legal basis of the reference: Article 267(a) and (b) TFEU. 
Request for interpretation of: Article 63 TFEU; Article 49(3) of the Charter of 
Fundamental Rights of the European Union; Directive (ЕU) 2015/849: Recital 6, 
Article 2(1), Articles 4 and 5, Article 58(1) and Article 60(4). 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-544/19 
 
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Questions referred 
Question 1: 
Must Article 63 TFEU be interpreted as precluding national legislation such as 
that in question in the main proceedings, under which domestic payments 
amounting to 10 000 leva (BGN) or more are only to be made by transfer or 
deposit into a payment account and which restricts the cash payment of dividends 
from undistributed profits of BGN 10 000 or more? If Article 63 TFEU does not 
preclude that regulation, is such a restriction justified by the aims of Directive 
(EU) 2015/849? 
Question 2: 
Must Article 2(1) of Directive (EU) 2015/849, in consideration of Recital 6 and 
Articles 4 and 5 thereof, be interpreted as not precluding a general national 
legislative provision such as that in question in the main proceedings, under which 
domestic payments of BGN 10 000 or more are only to be made by transfer or 
deposit into a payment account and which has no interest in the person and in the 
reason for the cash payment and at the same time covers all cash payments among 
natural and legal persons? 
(1) If that question is answered in the affirmative, does Article 2(1)(3)(e) of 
Directive (EU) 2015/849, in consideration of Recital 6 and Articles 4 and 5 
thereof, allow the Member States to provide for additional general restrictions of 
domestic cash payments in a national legislative provision such as that in question 
in the main proceedings, under which domestic cash payments of BGN 10 000 or 
more are only to be made by transfer or deposit into a payment account, if the 
reason for the cash payment is ‘undistributed profits’ (dividends)? 
(2) If that question is answered in the affirmative, does Article 2(1)(3)(e) of 
Directive (EU) 2015/849, in consideration of Recital 6 and Article 5 thereof, allow 
the Member States to provide for restrictions of cash payments in a national 
legislative provision such as that in question in the main proceedings, under which 
domestic payments of BGN 10 000 or more are only to be made by transfer or 
deposit into a payment account, where the threshold value is below EUR 10 000? 
Question 3: 
Must Article 58(1) and Article 60(4) of Directive (EU) 2015/849, with regard to 
Article 49(3) of the Charter of Fundamental Rights of the European Union, be 
interpreted as precluding a national legislative provision such as that in question in 
the main proceedings, which stipulates a fixed level of administrative penalties for 
infringements of the cash payment restrictions and does not allow any 
differentiating assessment taking account of the specific relevant circumstances? 
(1) If the answer is that the provisions of Article 58(1) and Article 60(4) of 
Directive (EU) 2015/849, with regard to Article 49(3) of the Charter of 
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Fundamental Rights of the European Union, allow a national legislative provision 
such as that in question in the main proceedings, which stipulates a fixed level of 
administrative penalties for infringements of the cash payment restrictions, must 
the provisions of Article 58 and Article 60(4) of Directive (EU) 2015/849, in 
consideration of the principle of effectiveness and the right to an effective remedy 
under Article 47 of the Charter of Fundamental Rights of the European Union, be 
interpreted as precluding a national legislative provision such as that in question in 
the main proceedings, which restricts judicial review, if that provision does not 
allow the court to determine an administrative penalty for infringements of the 
cash payment restrictions, in the event of an appeal, below the amount that has 
been set, taking account of the specific relevant circumstances? 
Provisions of EU law and the case-law cited 
Article 63 TFEU; Article 47 and Article 49(3) of the Charter of Fundamental 
Rights of the European Union; Article 1 of Council Directive 88/361/EEC for the 
implementation of Article 67 of the Treaty; Recitals 6, 22 and 65 and Articles 2, 4, 
5, 58 and 60 of Directive (EU) 2015/849 of the European Parliament and of the 
Council of 20 May 2015 on the prevention of the use of the financial system for 
the purposes of money laundering or terrorist financing, amending Regulation 
(EU) No 648/2012 of the European Parliament and of the Council, and repealing 
Directive 2005/60/EC of the European Parliament and of the Council and 
Commission Directive 2006/70/EC 
Provisions of national law cited 
Articles 113, 123, 133, 135 to 137 and 147 of the Targovski zakon (Commercial 
Law, TZ); Articles 1 to 3, 5 and 6 of the Zakon za ogranichavane na plashtaniyata 
v broi (Law on the restriction of cash payments, ZOPB); Article 27(1) and (5), 
Article 28(a), Article 63(1) and Article 83 of the Zakon za administrativnite 
narusheniya i nakazaniya (Law on administrative-law infringements and penalties, 
ZANN); Article 208, Article 218(2) and Article 223 of the Administrativno-
protsesualen kodeks (Law on administrative proceedings, APK) 
Brief summary of the facts and procedure 
1 The appellant in the appeal in cassation is a single-member company with limited 
liability under Bulgarian law with registered office in Petrich, Bulgaria, operating 
in the field of wholesale distribution. The sole shareholder and manager is a Greek 
citizen domiciled in Greece. 
2 On 14 March 2018, a general meeting took place at the company’s registered 
office, in the course of which it was resolved to distribute dividends to the sole 
shareholder in a total amount of BGN 100 000. The amount indicated constitutes 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-544/19 
 
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undistributed profits subject to corporation tax. It was resolved to pay out the 
amount in instalments from the company’s funds in cash. 
3 In March 2018, on the basis of that resolution, the company paid the sole 
shareholder the sum of BGN 95 000, divided into nine payments of BGN 10 000 
each and one payment of BGN 5 000, in cash, for which the corresponding 
payment instructions for outgoings were issued. 
4 One of those cash payments, which was made on 14 March 2018 and amounted to 
BGN 10 000, is the subject of the main proceedings. It is not disputed between the 
parties and, on the basis of the facts established in the proceedings, is beyond 
dispute that this sum consists of distributed dividends for implementing the 
aforementioned resolution of the company’s general meeting. 
5 During a tax audit of ‘Ecotex Bulgaria’ EOOD, it was found that each of those 
cash payments of BGN 10 000 constitutes an infringement of the prohibition 
under Article 3(1) No 1 of the ZOPB on making domestic cash payments ‘of 
BGN 10 000 or more’. 
6 The Teritorialna direktsia na Nationalna agentsia za prihodite Sofia (Sofia 
Regional Division of the Central Administration of the National Revenue Agency) 
dismissed the company’s objections, which were based on this being a ‘minor 
case’, and established for each of those payments the financial sanction provided 
for in Article 5(1) ZOPB of 50 per cent of the total value of each payment, which 
amounts to BGN 5 000 in the case of the payment in question in the main 
proceedings. 
7 ‘Ecotex Bulgaria’ EOOD contested the penalty notice regarding the payment in 
question in the main proceedings at the competent Rayonen sad, which confirmed 
the notice in full. 
8 The Rayonen sad assumed that the cash payment of BGN 10 000 made on 
14 March 2018, which constituted part of the distributed dividends, met the 
conditions for an infringement pursuant to Article 3(1) No 1 of the ZOPB. Due to 
the lack of a legal definition of the term ‘payment’ within the meaning of the 
ZOPB, that court assumed that it was to be understood as ‘any monetary 
transaction’, regardless of whether a counter-performance was involved. 
9 With regard to the financial sanction imposed, the Rayonen sad assumed that there 
were no legal bases for changing (reducing) it. As reasoning, it stated that it was 
bound to the fixed level under Article 5(1) ZOPB, namely 50 per cent of the 
amount of the cash payment, and to the prohibition under Article 27(5) ZANN on 
fixing a sanction below the minimum level provided for in the special law of 
Article 5(1) ZOPB. 
10 The Rayonen sad rejected the application pursuant to Article 28 ZANN to relieve 
the infringing party of the responsibility under administrative criminal law due to 
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this being a ‘minor case’, with the reasoning that the infringement under 
Article 3(1) No 1 ZOPB did not vary from the usual and was not ‘minor’. 
11 ‘Ecotex Bulgaria’ EOOD contested the decision of the Rayonen sad with an 
appeal in cassation at the referring court, which has to issue a final decision on the 
dispute. 
Principal arguments of the parties in the main proceedings 
12 The appellant in the appeal in cassation argues that the right to a share in the 
company’s profit (dividend right) was not a legal transaction or contract with a 
counter-performance and was not covered by the term ‘payment’ within the 
meaning of Article 3(1) No 1 ZOPB. 
13 It also points out that the cash payment of BGN 10 000 made on 14 March 2018 
only exceeded the restriction under Article 3(1) No 1 ZOPB by BGN 0.01, which 
meant that the financial sanction provided for in Article 5(1) ZOPB of 50 per cent 
of the total amount of the payment made, a sanction which amounted to 
BGN 5 000 in the present case, was disproportionate. 
14 The respondent in the appeal in cassation is of the opinion that the provision of 
Article 3(1) No 1 ZOPB covered all cash payments, including the payment of a 
share in the undistributed profits (dividends), in so far as this did not fall under 
one of the statutory exceptions under Article 2 ZOPB. 
15 It also points out that the term ‘payment’ within the meaning of Article 3(1) No 1 
ZOPB was to be understood as any monetary transaction, regardless of whether it 
was on a contractual or non-contractual basis; a participation right relationship 
was also to be included. 
Brief summary of the basis for the reference 
16 The Zakon za ogranichavane na plashtaniyata v broi (Law on the restriction of 
cash payments, ZOPB) was issued as a measure for implementing the repealed 
Directive 2005/60/EC and is mentioned as a national instrument for transposing 
Directive (EU) 2015/849 under No 11 in the following communication: 
https://eur-lex.europa.eu/legal-content/BG/NIM/?uri=CELEX:32015L0849. 
17 The law to be applied to the present case is the provision of Article 3(1) No 1 
ZOPB, which is to be interpreted in the spirit and within the meaning of the 
corresponding EU law (see judgment of 10 April 1984, von Colson and Kamann, 
14/83, EU:C:1984:153) and specifically in the light of Article 63 of the Treaty on 
the Functioning of the European Union and the provisions of Directive (EU) 
2015/849. 
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18 In order to discharge the duty to ensure that national legislation is interpreted in 
conformity with [EU] law (see judgments of 14 September 2000, Collino and 
Chiappero, C-343/98, EU:C:2000:441, paragraph 23, of 19 April 2007, Farell, 
C-356/05, EU:C:2007:229, paragraph 40, and of 24 January 2012, Dominguez, 
C-282/10, EU:C:2012:33, paragraph 39), national courts must do whatever lies 
within their jurisdiction, taking the whole body of domestic law into consideration 
and applying the interpretative methods recognised in case-law and legal doctrine 
(see judgments of 4 July 2006, Adeneler, C-212/04, EU:C:2006:443, 
paragraph 111, and of 24 January 2012, Dominguez, C-282/10, EU:C:2012:33, 
paragraph 27). 
19 Within the meaning of EU law, the movement of capital in its basic form 
constitutes a financial transaction, not involving payment from another economic 
relationship. The Court of Justice of the European Union has found that, in 
contrast to current payments, which are connected to transactions in the form of 
performance and consideration on the basis of a legal transaction, ‘movements of 
capital are financial operations essentially concerned with the investment of the 
funds in question rather than remuneration for a service’ (judgment of 31 January 
1984, Luisi and Carbone, 286/82 and 26/83, EU:C:1984:35, paragraph 21). 
20 In the opinion of the Court of Justice, the receipt of dividends from shares in 
trading companies constitutes a form of the free movement of capital (judgment of 
6 June 2000, Verkooijen, C-35/98, EU:C:2000:294). Article 63(1) TFEU prohibits 
all restrictions on the movement of capital between the Member States and 
between the Member States and third countries, including ‘measures which are 
likely to discourage non-residents from making investments in a Member State or 
from maintaining such investments’ (see judgments of 22 January 2009, STEKO 
Industriemontage, C-377/07, EU:C:2009:29, paragraphs 23 and 24, and of 
31 March 2011, Schröder, C-450/09, EU:C:2011:198, paragraph 30). The 
response to the question of whether the cash payment restriction in the national 
law (Article 3(1) No 1 ZOPB), if due to its indeterminacy this also covers the 
payment of a dividend, constitutes a disguised restriction of the free movement of 
capital and payments within the meaning of Article 63 TFEU is therefore 
important. 
21 Directive (EU) 2015/849 aims to prevent the use of the Union’s financial system 
for the purpose of money laundering and terrorist financing. In order to achieve 
the aims of the Directive, a catalogue of occupations and activities which fall 
within its scope was established, with the Member States being able to expand the 
scope to occupations or categories of undertaking other than those mentioned in 
Article 2(1) and to issue lower threshold values, additional general cash payment 
restrictions and further more stringent provisions. 
22 In this connection, it is to be examined, with regard to the company’s 
responsibility, whether a general national legislative provision which restricts cash 
payments, regardless of whether they constitute remuneration for a counter-
performance, is admissible and whether the restriction of the cash payment of a 
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share in undistributed profits under Article 3(1) No 1 ZOPB is covered by the 
scope of Directive (EU) 2015/849; if such a provision is admissible, this raises the 
question of whether it is left to the Member States to fix the threshold value for 
cash payments at an amount below EUR 10 000. 
23 If this is found to be the case, it is to be examined to what extent a national 
legislative provision such as that of Article 5(1) ZOPB, which provides for a 
financial sanction at the fixed level of ‘50 per cent of the total amount of the 
payment made’ for legal persons in respect of all financial transactions, is 
admissible with regard to the proportionality of the penalty pursuant to 
Article 58(1) and the circumstances pursuant to Article 60(4) of Directive (EU) 
2015/849 and whether it does not constitute a breach of the principle of effective 
judicial review in light of the prohibition regulated in Article 27(5) ZANN on the 
court reducing the sanction below the minimum level provided for in Article 5(1) 
ZOPB.