CELEX: 62018CC0501
Language: en
Date: 2020-09-17 00:00:00
Title: Opinion of Advocate General Campos Sánchez-Bordona delivered on 17 September 2020.#BT v Balgarska Narodna Banka.#Request for a preliminary ruling from the Administrativen sad Sofia-grad.#Reference for a preliminary ruling – Deposit-guarantee schemes – Directive 94/19/EC – Article 1(3)(i) – Article 7(6) – Article 10(1) – Concept of ‘unavailable deposit’ – Determination of unavailability of deposits – Competent authority – Depositor’s rights to compensation – Contractual clause contrary to Directive 94/19 – Principle of primacy of Union law – European System of Financial Supervision – European Banking Authority (EBA) – Regulation (EU) No 1093/2010 – Article 1(2) – Article 4(2)(iii) – Article 17(3) – EBA recommendation to a national banking authority on measures to comply with Directive 94/19 – Legal effects – Validity – Reorganisation and winding up of credit institutions – Directive 2001/24/EC – Article 2, seventh indent – Concept of ‘reorganisation measures’ – Compatibility with Article 17(1) and Article 52(1) of the Charter of Fundamental Rights of the European Union – Liability of Member States for breach of Union law – Conditions – Sufficiently serious breach of EU law – Procedural autonomy of Member States – Principle of sincere cooperation – Article 4(3) TEU – Principles of equivalence and effectiveness.#Case C-501/18.

OPINION OF ADVOCATE GENERAL
   CAMPOS SÁNCHEZ-BORDONA
   delivered on 17 September 2020 (
         1
      )
   
      Case C‑501/18
   
   BT
   v
   Balgarska Narodna Banka
   
      (Request for a preliminary ruling from the Administrativen sad Sofia-grad (Administrative Court, Sofia, Bulgaria))
   
   (Reference for a preliminary ruling – Directive 94/19/EC – Deposit-guarantee schemes – Concept of unavailable deposit – Deposits due and payable – Determination of the unavailability of deposits – Repayable deposits – Contractual clause contrary to Directive 94/19 – Principle of the primacy of EU law – Regulation (EU) No 1093/2010 – European Banking Authority – Recommendation on action necessary to comply with Directive 94/19 – Interpretation and invocability – Validity)
   
            1.
         
         
            In 2016, the holder of a deposit in a current account opened in the holder’s name at the Korporativna Targovska Banka (‘KTB’) brought an action before a Bulgarian court (
                  2
               ) seeking an order requiring the Balgarska Narodna Banka (Central Bank of Bulgaria; ‘BNB’) to compensate him for the harm he had sustained as a result of the delay in the reimbursement of that deposit.
         
      
            2.
         
         
            The applicant in that dispute claimed that the BNB should have made a declaration as to the unavailability of deposits made at the KTB within the time limit laid down in Directive 94/19/CE. (
                  3
               ) Having failed to do so, it was responsible for the delay in reimbursement and liable for payment of the default interest which had accrued up until the amount of the deposit was repaid to him.
         
      
            3.
         
         
            The competent court made a request for a preliminary ruling which the Court of Justice disposed of in the judgment of 4 October 2018 in Kantarev. (
                  4
               )
         
      
            4.
         
         
            While the judgment in Kantarev was still pending, another Bulgarian court, the Administrativen sad Sofia-grad (Administrative Court, Sofia, Bulgaria) made a request for a preliminary ruling in a similar dispute the subject matter of which was also an action for a declaration of financial liability on the part of the BNB which was based on arguments that are in part the same.
         
      
            5.
         
         
            After delivering the judgment in Kantarev, the Court brought it to the attention of the Administrativen sad Sofia-grad (Administrative Court, Sofia) in order to ascertain whether that court wished to proceed with its request for a preliminary ruling. It confirmed that it did.
         
      
            6.
         
         
            In accordance with the Court’s instruction, this Opinion will deal with only two of the questions raised on this occasion, which were either not addressed or were addressed from another point of view in the judgment in Kantarev: (a) the concept of ‘deposit due and payable’ referred to in Article 1(3)(i) of Directive 94/19; and (b) the impact of the Recommendation of the European Banking Authority (‘the EBA’) of 17 October 2014. (
                  5
               )
         
      
            7.
         
         
            My analysis being confined to those two questions, I shall refer to the judgment in Kantarev, as appropriate, when setting out the legal framework, describing the facts that dictated the reimbursement of the funds deposited at the KTB and giving my assessment of those questions.
         
      
      I. Legal framework
   
   
      A. EU law
   
   
      
         1.
       
         Directive 94/19, as amended by Directive 2009/14 (
               6
            )
      
   
   
            8.
         
         
            So far as concerns the recitals and relevant articles of this directive, I refer to paragraphs 3 to 6 of the judgment in Kantarev.
         
      
      
         2.
       
         Regulation (EU) No 1093/2010 (
               7
            )
      
   
   
            9.
         
         
            Recitals 27 to 29 are worded as follows:
            
                     ‘(27)
                  
                  
                     Ensuring the correct and full application of Union law is a core prerequisite for the integrity, transparency, efficiency and orderly functioning of financial markets, the stability of the financial system, and for neutral conditions of competition for financial institutions in the Union. A mechanism should therefore be established whereby the Authority addresses instances of non-application or incorrect application of Union law amounting to a breach thereof. That mechanism should apply in areas where Union law defines clear and unconditional obligations.
                  
               
                     (28)
                  
                  
                     To allow for a proportionate response to instances of incorrect or insufficient application of Union law, a three-step mechanism should apply. First, the Authority should be empowered to investigate alleged incorrect or insufficient application of Union law obligations by national authorities in their supervisory practice, concluded by a recommendation. Second, where the competent national authority does not follow the recommendation, the Commission should be empowered to issue a formal opinion taking into account the Authority’s recommendation, requiring the competent authority to take the actions necessary to ensure compliance with Union law.
                  
               
                     (29)
                  
                  
                     Third, to overcome exceptional situations of persistent inaction by the competent authority concerned, the Authority should be empowered, as a last resort, to adopt decisions addressed to individual financial institutions. That power should be limited to exceptional circumstances in which a competent authority does not comply with the formal opinion addressed to it and in which Union law is directly applicable to financial institutions by virtue of existing or future Union regulations.’
                  
               
      
            10.
         
         
            Article 1(2) provides:
            ‘The Authority shall act within the powers conferred by this Regulation and within the scope of Directive 2006/48/EC, Directive 2006/49/EC, Directive 2002/87/EC, Regulation (EC) No 1781/2006, Directive 94/19/EC and, to the extent that those acts apply to credit and financial institutions and the competent authorities that supervise them, within the relevant parts of Directive 2005/60/EC, Directive 2002/65/EC, Directive 2007/64/EC and Directive 2009/110/EC, including all directives, regulations, and decisions based on those acts, and of any further legally binding Union act which confers tasks on the Authority.’
         
      
            11.
         
         
            Article 4(2)(iii) defines ‘competent authorities’ as:
            ‘with regard to deposit guarantee schemes, bodies which administer deposit-guarantee schemes pursuant to Directive 94/19/EC, or, where the operation of the deposit-guarantee scheme is administered by a private company, the public authority supervising those schemes pursuant to that Directive’.
         
      
            12.
         
         
            Article 16 states:
            ‘1.   The Authority shall, with a view to establishing consistent, efficient and effective supervisory practices within the ESFS, and to ensuring the common, uniform and consistent application of Union law, issue guidelines and recommendations addressed to competent authorities or financial institutions.
            …
            3.   The competent authorities and financial institutions shall make every effort to comply with those guidelines and recommendations.
            Within 2 months of the issuance of a guideline or recommendation, each competent authority shall confirm whether it complies or intends to comply with that guideline or recommendation. In the event that a competent authority does not comply or does not intend to comply, it shall inform the Authority, stating its reasons.
            The Authority shall publish the fact that a competent authority does not comply or does not intend to comply with that guideline or recommendation. The Authority may also decide, on a case-by-case basis, to publish the reasons provided by the competent authority for not complying with that guideline or recommendation. The competent authority shall receive advanced notice of such publication.
            If required by that guideline or recommendation, financial institutions shall report, in a clear and detailed way, whether they comply with that guideline or recommendation.
            …’
         
      
            13.
         
         
            Article 17 provides:
            ‘1.   Where a competent authority has not applied the acts referred to in Article 1(2), or has applied them in a way which appears to be a breach of Union law, including the regulatory technical standards and implementing technical standards established in accordance with Articles 10 to 15, in particular by failing to ensure that a financial institution satisfies the requirements laid down in those acts, the Authority shall act in accordance with the powers set out in paragraphs 2, 3 and 6 of this Article.
            2.   Upon a request from one or more competent authorities, the European Parliament, the Council, the Commission or the Banking Stakeholder Group, or on its own initiative, and after having informed the competent authority concerned, the Authority may investigate the alleged breach or non-application of Union law.
            …
            3.   The Authority may, not later than 2 months from initiating its investigation, address a recommendation to the competent authority concerned setting out the action necessary to comply with Union law.
            The competent authority shall, within 10 working days of receipt of the recommendation, inform the Authority of the steps it has taken or intends to take to ensure compliance with Union law.
            4.   Where the competent authority has not complied with Union law within 1 month from receipt of the Authority’s recommendation, the Commission may, after having been informed by the Authority, or on its own initiative, issue a formal opinion requiring the competent authority to take the action necessary to comply with Union law. The Commission’s formal opinion shall take into account the Authority’s recommendation.
            The Commission shall issue such a formal opinion no later than 3 months after the adoption of the recommendation. The Commission may extend this period by 1 month.
            The Authority and the competent authorities shall provide the Commission with all necessary information.
            5.   The competent authority shall, within 10 working days of receipt of the formal opinion referred to in paragraph 4, inform the Commission and the Authority of the steps it has taken or intends to take to comply with that formal opinion.
            6.   Without prejudice to the powers of the Commission under Article 258 TFEU, where a competent authority does not comply with the formal opinion referred to in paragraph 4 within the period of time specified therein, and where it is necessary to remedy in a timely manner such non-compliance in order to maintain or restore neutral conditions of competition in the market or ensure the orderly functioning and integrity of the financial system, the Authority may, where the relevant requirements of the acts referred to in Article 1(2) are directly applicable to financial institutions, adopt an individual decision addressed to a financial institution requiring the necessary action to comply with its obligations under Union law including the cessation of any practice.
            The decision of the Authority shall be in conformity with the formal opinion issued by the Commission pursuant to paragraph 4.
            7.   Decisions adopted under paragraph 6 shall prevail over any previous decision adopted by the competent authorities on the same matter.
            When taking action in relation to issues which are subject to a formal opinion pursuant to paragraph 4 or a decision pursuant to paragraph 6, competent authorities shall comply with the formal opinion or the decision, as the case may be.
            …’
         
      
            14.
         
         
            Article 26(2) reads:
            ‘Article 16 concerning the Authority’s powers to adopt guidelines and recommendations shall apply to deposit guarantee schemes.’
         
      
      B. National law
   
   
            15.
         
         
            I refer to the transcription of the relevant Bulgarian legislation that is contained in paragraphs 8 to 25 of the judgment in Kantarev.
         
      
            16.
         
         
            I would draw attention only to Article 23(1) and (5) of the Zakona za garantirane na vlogovete v bankite (Law on bank deposit insurance), (
                  8
               ) which provides as follows:
            ‘1.   The Fund shall cover the obligations of the bank in question up to the guaranteed amount where the [BNB] has withdrawn the banking licence issued to that commercial bank.
            …
            5.   The Fund shall begin to reimburse the amounts no later than on the 20th working day following the date on which the licence was withdrawn.’
         
      
      II. Dispute and questions referred for a preliminary ruling
   
   
            17.
         
         
            In 2008, 2010 and 2011, the applicant, BT, and KTB entered into three contracts concerning unlimited deposits in euros and Bulgarian leva (BGN) which were guaranteed by the Bank Deposit Insurance Fund (‘the Fund’) up to BGN 196000 per person.
         
      
            18.
         
         
            KTB’s situation in 2014 and the actions of the national authorities were described as follows in the judgment in Kantarev (paragraphs 27 and 28):
            ‘Since KTB Bank was experiencing a liquidity crisis following mass withdrawals of deposits it held, on 20 June 2014, its representatives made a request to the BNB for that credit institution to be placed under special supervision. They also notified the BNB that the credit institution had suspended payments and all banking transactions. By a decision of the same day, the management board of the BNB placed KTB Bank under special supervision for a period of three months. Performance of the credit institution’s obligations was suspended and its activities limited. Receivers were appointed and instructed by the BNB to have the assets and the liabilities of that institution audited by independent auditors.
            … According to the audit, KTB Bank’s financial results were in deficit and it no longer met the requirements for equity capital under EU law. Consequently, by a decision of 6 November 2014, the BNB, first, withdrew KTB Bank’s banking licence, second, agreed that measures should be taken for instituting insolvency proceedings against KTB Bank and, third, decided that the Fund was to be notified.’
         
      
            19.
         
         
            By decision of the BNB’s Board of Management of 30 June 2014, effective as from 1 July 2014, interest rates on deposits at KTB were reduced to the average rate on the banking market and a standard interest rate scale was established. (
                  9
               )
         
      
            20.
         
         
            On 1 August 2014, the European Commission sent the Bulgarian Finance Minister a letter of formal notice, in accordance with the procedure laid down in Article 258 TFEU, on grounds of the incorrect transposition of Directive 94/19 and infringement of Article 63 TFEU. (
                  10
               )
         
      
            21.
         
         
            By decision of 16 September 2014, the BNB’s Board of Management extended the supervisory measures until 20 November 2014.
         
      
            22.
         
         
            On 17 October 2014, the EBA issued Recommendation EBA/2014/02, directed at the BNB and the Fund, in accordance with Article 17(3) of Regulation No 1093/2010. This stated that the BNB had infringed EU law by not taking the necessary steps to determine the unavailability of deposits in accordance with Article 1(3)(i) of Directive 94/19, by adopting the decision to suspend the fulfilment of all obligations and by not allowing depositors to access guaranteed deposits.
         
      
            23.
         
         
            According to recital 27 of that Recommendation, the BNB’s decision of 20 June 2014 to place KTB under special supervision and to suspend its obligations amounted to a finding as to the unavailability of deposits within the meaning of Article 1(3)(i) of Directive 94/19 and, consequently, the Fund had a duty to pay the guaranteed amounts of unavailable deposits.
         
      
            24.
         
         
            The applicant’s deposits were repaid in a manner similar to that described in the judgment in Kantarev, (
                  11
               ) although, according to the data provided by the referring court, the applicant received from the Fund a refund of its guaranteed deposits at KTB in the amount of BGN 196000, together with corresponding interest from 30 June to 6 November 2014. Its other deposits, amounting to BGN 44070 (approximately EUR 22500), were placed on the list of recognised claims, as part of the insolvency proceedings, in the order laid down by the applicable Bulgarian legislation.
         
      
            25.
         
         
            On 7 March 2015, the Sofiyski apelativen sad (Court of Appeal, Sofia, Bulgaria) declared 20 June 2014 to be the start date of KTB’s insolvency because it was then that KTB’s net assets had fallen into deficit.
         
      
            26.
         
         
            The infringement proceedings instituted by the Commission against Bulgaria were closed on 10 December 2015.
         
      
            27.
         
         
            BT brought before the referring court an action for damages (
                  12
               ) for the harm resulting directly or indirectly from the actions and omissions of the BNB, which, in conjunction with KTB’s intervention, BT claims to be in breach of EU law.
         
      
            28.
         
         
            The action comprises two claims:
            
                     –
                  
                  
                     In the first place, payment of the statutory interest on the guaranteed amounts of the deposits at KTB during the period from 30 June to 4 December 2014, in the amount of BGN 8 627.96 (approximately EUR 4400). As the basis for that claim, the applicant submits that the BNB failed, in its capacity as competent authority, to find that those deposits had become unavailable on 30 June 2014, thereby infringing Directive 94/19 and unlawfully delaying their reimbursement until 4 December 2014.
                  
               
                     –
                  
                  
                     In the second place, payment of BGN 44070 (approximately EUR 22500), as the value of the deposits at KTB that exceeded the guaranteed minimum. In its contention, the BNB’s actions precipitated KTB’s insolvency and the prospects of recovering that amount in the national insolvency proceedings are minimal, a state of affairs which constitutes an infringement of Articles 17 and 52 of the Charter of Fundamental Rights of the European Union.
                  
               
      
            29.
         
         
            In order to dispose of those claims, the Administrativen sad Sofia-grad (Administrative Court, Sofia) has submitted to the Court a request for a preliminary ruling comprising various questions of which I shall reproduce those that will be addressed in my analysis:
            ‘…
            
                     (2)
                  
                  
                     Does it follow from recital 27 of Regulation (EU) No 1093/201[0] … that, under circumstances such as those of the main proceedings, the recommendation issued on the basis of Article 17(3) of the regulation, in which an infringement of EU law by the central bank of a Member State in connection with the deadlines for paying out guaranteed deposits to the depositors in the respective credit institution has been established:
                     
                              –
                           
                           
                              confers on the depositors at that credit institution the right to invoke the recommendation before a national court in order to substantiate an action for damages on the ground of that infringement of EU law, if account is taken of the European Banking Authority’s express power to establish infringements of EU law, and if it is considered that the depositors are not, and cannot be, the addressees of the recommendation and the latter does not establish any direct legal consequences for them;
                           
                        
                              –
                           
                           
                              is valid, having regard to the requirement that the infringed provision must provide for clear and unconditional obligations, if consideration is given to the fact that point (i) of Article 1(3) of Directive 94/19/EC …, if it is interpreted in conjunction with recitals 12 and 13 of that directive, does not contain all the elements required to establish a clear and unconditional obligation for the Member States and does not confer direct rights on depositors, and taking account of the fact that that directive provides for only minimum harmonisation that does not cover the indications by means of which unavailable deposits are determined, and that the recommendation has not been substantiated by other clear and unconditional provisions of EU law in relation to those indications, in particular the assessment of the lack of liquidity and the current lack of prospects of payout; an existing obligation to order early intervention measures and to maintain the business activity of the credit institution;
                           
                        
                              –
                           
                           
                              in view of the subject matter, the deposit guarantee, and the power of the European Banking Authority to issue recommendations on the deposit guarantee scheme pursuant to Article 26(2) of Regulation (EU) No 1093/2010, is valid in relation to the national central bank, which has no connection with the national deposit guarantee scheme and is not a competent authority pursuant to point [iii] of Article 4(2) of that regulation?
                           
                        
               …
            
                     (4)
                  
                  
                     Does it follow from the interpretation of Article 10(1) in conjunction with point (i) of Article 1(3) and Article 7(6) of Directive 94/19 and the legal considerations in the judgment of the Court of Justice of the European Union of 21 December 2016, Vervloet and Others (C‑76/15, EU:C:2016:975, paragraphs 82 to 84), that the scope of application of the provisions of the directive cover depositors
                     
                              –
                           
                           
                              whose deposits were not repayable on the basis of contracts and statutory provisions during the period running from the suspension of payments of the credit institution to the withdrawal of its authorisation for banking business, and the respective depositor has not expressed that he seeks repayment,
                           
                        
                              –
                           
                           
                              who have agreed to a clause that provides for the guaranteed amount of the deposits to be paid out in accordance with the procedure governed in the law of a Member State, and specifically after the withdrawal of the authorisation of that credit institution that manages the deposits, and that requirement has been met, and
                           
                        
                              –
                           
                           
                              the aforementioned clause of the deposit contract has the force of law between the contracting parties under the law of the Member States?
                           
                        Does it follow from the provisions of that directive or from other provisions of EU law that the national court may not take such a clause in the deposit contract into consideration and may not examine the action of a depositor for the payment of interest due to failure to pay out the guaranteed amount of deposits within the deadline pursuant to that contract on the basis of the requirements for non-contractual liability for loss arising from an infringement of EU law and on the basis of Article 7(6) of Directive 94/19?’
                  
               
      
      III. Procedure before the Court
   
   
            30.
         
         
            The request for a preliminary ruling was received at the Court on 6 August 2018.
         
      
            31.
         
         
            Written observations have been lodged by the BNB and the Commission. It was not considered necessary to hold a hearing.
         
      
            32.
         
         
            In response to a question put by the Court following the delivery of the judgment in Kantarev, the referring court indicated on 9 November 2018 that it was maintaining its request for a preliminary ruling, since its uncertainty not least about the obligation to take into account Recommendation EBA/2014/02 remained.
         
      
      IV. Assessment
   
   
      A. Unavailability of deposits, determination of repayable deposits and payment of deposits (fourth question)
   
   
            33.
         
         
            The referring court wishes to ascertain, in essence, whether the guarantee contained in Directive 94/19 [Article 1(3)(i) in conjunction with Articles 7(6) and 10 thereof] extends to depositors:
            
                     –
                  
                  
                     whose deposits were not recoverable by contract or statutory provision during the period from the suspension of payments by the credit institution to the withdrawal of the banking licence, and the depositor had not requested their repayment;
                  
               
                     –
                  
                  
                     who have agreed to a clause having the force of law between the parties which provides for the guaranteed amount [of their deposits] to be reimbursed in accordance with the law of a Member State, more specifically, after the withdrawal of the licence held by the credit institution managing the deposits.
                  
               
      
            34.
         
         
            If so, the referring court asks whether a contractual clause of this kind should be disapplied in the context of the examination of a claim for damages for harm caused by late payment, within the meaning of Directive 94/19, of the guaranteed amount of deposits.
         
      
            35.
         
         
            The judgment in Kantarev was confined to a claim for damages for harm sustained by a person whose deposits at KTB were unquestionably payable (recoverable) even at the time when the deposits were found to be unavailable. The case at issue here, by contrast, is concerned with whether the same provisions of Directive 94/19 also protect a depositor whose deposits at KTB were not payable at that time.
         
      
            36.
         
         
            A detailed analysis of the deposit-guarantee mechanism established by Directive 94/19 is, in my view, the route to a proper explanation and application of the Kantarev case-law.
         
      
            37.
         
         
            Deposit-guarantee schemes (‘DGSs’) are triggered in accordance with a procedure the essential elements of which are governed by Directive 94/19. The objective of that directive is twofold: to protect depositors (
                  13
               ) and to ensure the stability of the banking system. (
                  14
               )
         
      
            38.
         
         
            The procedure for implementing the bank deposit guarantee is best understood if it is split into three stages:
            
                     –
                  
                  
                     The first stage is to determine that a banking institution’s deposits have become unavailable, a task which falls to the competent national authority.
                  
               
                     –
                  
                  
                     The intermediate stage is to identify the deposits to be repaid by the DGS.
                  
               
                     –
                  
                  
                     The final stage is for the guaranteed deposits to be repaid to their holders by the DGS.
                  
               
      
      
         1.
       
         First stage
      
   
   
            39.
         
         
            The competent national authority has to decide whether or not the deposits in a financial institution are available. For the purposes of taking that decision, Article 1(3)(i) of Directive 94/19 requires that:
            
                     –
                  
                  
                     Deposits ‘[should be] due and payable but [not have] been paid by a credit institution under the legal and contractual obligations applicable thereto’. (
                           15
                        )
                  
               
                     –
                  
                  
                     The competent national authority should find that, ‘in [its] view, the credit institution … appears to be unable for the time being, for reasons which are directly related to its financial circumstances, to repay the deposit and to have no current prospect of being able to do so’.
                  
               
      
            40.
         
         
            The period within which the competent national authority must make that initial decision is very short: ‘no later than five working days after first becoming satisfied that a credit institution has failed to repay deposits which are due and payable’.
         
      
            41.
         
         
            The judgment in Kantarev clarified various aspects of the rules governing that initial stage which it is appropriate to recall here:
            
                     –
                  
                  
                     Article 1(3)(i) of Directive 94/19 confers rights on individuals (
                           16
                        ) and is directly effective, notwithstanding that it extends a degree of latitude to the Member States as regards the appointment of the authority competent to determine that deposits have become unavailable and to assess the financial situation of the credit institution concerned. (
                           17
                        )
                  
               
                     –
                  
                  
                     The competent authority must determine whether deposits are unavailable as soon as possible and no later than five working days after first becoming satisfied that a credit institution has failed to repay deposits which are due and payable. That obligation is unconditional and sufficiently precise. (
                           18
                        )
                  
               
                     –
                  
                  
                     The unavailability of deposits must be determined by an express act of the competent national authority and cannot be inferred from other acts of the national authorities. (
                           19
                        )
                  
               
                     –
                  
                  
                     The five-day period (
                           20
                        ) for determining whether deposits have become unavailable is a mandatory time limit from which no derogations are provided for, and from which the national authority may not therefore introduce any derogations either. (
                           21
                        )
                  
               
                     –
                  
                  
                     The decision to regard deposits as being unavailable is subject only to the (‘necessary and sufficient’) conditions laid down in Article 1(3)(i), first paragraph, of Directive 94/19. (
                           22
                        ) It cannot therefore be contingent upon the insolvency of the credit institution or the withdrawal of its banking licence. (
                           23
                        )
                  
               
      
            42.
         
         
            The judgment in Kantarev did not, however, address the question that is raised by the referring court in this case, that is to say whether the definition of ‘unavailable deposit’ encompasses a deposit which, as a result of a contractual clause, does not have the status of being either due or payable because the contract refers to national law, under which deposits are recoverable only if the banking licence is withdrawn.
         
      
            43.
         
         
            In my opinion, a deposit of this kind cannot be classified as an ‘unavailable deposit’ at this initial stage of the procedure. A deposit which is not due or payable, in accordance with the legal and contractual conditions applicable under national law, cannot be taken into account as an unavailable deposit by the competent national authority.
         
      
            44.
         
         
            The key to determining when a deposit is due and payable lies primarily in the contractual relationship between the financial institution and its customer. If both agree that the financial institution will not be obliged to repay to the customer the amount of his deposit until a certain point in time, that deposit cannot be said to be due or payable if that point in time has not yet arrived.
         
      
            45.
         
         
            Consequently, a deposit of this kind cannot, in and of itself, put the credit institution in the ‘financial situation’ referred to in Article 1(3)(i) of Directive 94/19, whereby it is unable to repay deposits.
         
      
            46.
         
         
            However, in addition to having deposits that do not meet the criteria of being due and payable at a given point in time, the financial institution will have many that do meet the criteria. If that were the case, ‘the fact that that credit institution has not paid out certain deposits and that the conditions set out in Article 1(3)(i) of Directive 94/19 are satisfied [would be] sufficient for a determination that all deposits held by that institution are unavailable’. (
                  24
               )
         
      
            47.
         
         
            In short, the declaration of unavailability ‘is related to the objective financial situation of the credit institution and concerns the deposits held by that institution as a whole and not each of the deposits which it holds’. (
                  25
               )
         
      
      
         2.
       
         Intermediate stage
      
   
   
            48.
         
         
            At the second stage of the procedure, the competent national authority must decide which deposits are to be repaid by the DGS. (
                  26
               )
         
      
            49.
         
         
            Directive 94/19 provides for these purposes that:
            
                     –
                  
                  
                     Deposits made by other credit institutions on their own behalf and for their own account, own funds of the financial institutions and deposits arising from transactions in connection with which there has been a criminal conviction for money laundering are excluded (which is to say that they are not repayable) (Article 2).
                  
               
                     –
                  
                  
                     Member States may exclude or grant a lower level of guarantee to certain depositors or certain deposits (Article 7(2)). They must do so in accordance with the list set out in Annex I to Directive 94/19. (
                           27
                        ) There is nothing to indicate that Bulgaria availed itself of that option.
                  
               
      
            50.
         
         
            The DGS must repay (in the amounts guaranteed, of course) all deposits held by a banking institution which has been affected by a declaration of unavailability, with the exception of those that are caught by a ground for exclusion. That premiss has a number of consequences for the present dispute.
         
      
            51.
         
         
            In the first place, as I have already stated, the determination as to the credit institution’s inability to repay deposits is governed exclusively by the conditions laid down in Article 1(3)(i) of Directive 94/19. Neither this nor any other provision of the directive allows that determination to be subject to additional or different conditions.
         
      
            52.
         
         
            In the judgment in Kantarev, the Court held that the determination as to the unavailability of deposits cannot be made contingent upon the prior presentation of an unsuccessful request to withdraw funds (paragraph 81), upon the insolvency of the credit institution or the withdrawal of its banking licence (paragraph 51) or upon a credit institution’s having been previously placed under the special supervision of the banking authorities (paragraph 60).
         
      
            53.
         
         
            National legislation that imposes those or any other conditions not laid down in Article 1(3)(i) would infringe that provision, as well as Article 10(1) of Directive 94/19.
         
      
            54.
         
         
            In the second place, the determination of unavailability is made by the competent authority after it has assessed the difficulties faced by the credit institution, on account of its financial situation, in repaying deposits. Although, as I have also stated, it would be illogical for the adoption of that decision to be based exclusively on deposits scheduled to become payable in the future, the assessment by the competent authority, once it has become a decision, affects all deposits held by that credit institution. (
                  28
               )
         
      
            55.
         
         
            Hence the general rule, thereafter, requiring the repayment of all deposits held by the financial institution, whether or not they are due and payable (with the exception of those provided for in the exhaustive list contained in Article 2 of Directive 94/19).
         
      
            56.
         
         
            In other words, both deposits which are due and payable and those that do not meet those two criteria will be repayable in the case where the credit institution finds itself in an objective situation of being financially incapable of meeting its repayment obligations. That situation affects both its past and present obligations (deposits which are due and payable) and its future obligations (deposits which are not due or payable).
         
      
            57.
         
         
            At the intermediate stage, therefore, all deposits held by the credit institution must be identified by the competent authority in order for the DGS then to be able, where appropriate, to repay them at a later date. It is this interpretation of Article 1(3)(i) and Article 10(1) of Directive 94/19 that is most consistent with the objectives of Directive 94/19 (to protect depositors and ensure the stability of the financial system).
         
      
            58.
         
         
            If those deposits held by a credit institution subject to a DGS which are not due or payable were not repayable at that stage by the guarantee mechanism, depositors would run the risk of not being able to recover their savings in the future in proceedings for the reorganisation and winding-up of a credit institution in difficulty. What is more, the stability of the financial system would suffer from customers’ lack of confidence in the security of their medium- and long-term deposits.
         
      
      
         3.
       
         Final stage
      
   
   
            59.
         
         
            At this stage, the DGS repays or pays out the deposits. According to Article 7(1a), first subparagraph, of Directive 94/19, the amount which the Member States guarantee to repay is EUR 100000.
         
      
            60.
         
         
            Repayment must be effected within a short period of time (20 days) (
                  29
               ) so as to ensure that depositors are not deprived of their savings and are not, as a result, unable to meet their daily expenses. The stability of the banking system also calls for swift reimbursement. (
                  30
               )
         
      
            61.
         
         
            The reimbursement of deposits by a DGS is uncoupled from any proceedings for the reorganisation or winding-up of the credit institution, as this is the only way of being able to make pay-outs swiftly, within a period of 20 days from the decision as to unavailability. (
                  31
               ) Any uncertainty that might be prompted in this regard by recital 12 of Directive 2009/14 (
                  32
               ) has been resolved by the Court to the effect that such proceedings do not affect the availability or reimbursement of deposits. (
                  33
               )
         
      
            62.
         
         
            Neither can the repayment of deposits be made conditional on the existence of an unsuccessful prior claim by the depositor. (
                  34
               ) Article 10(3) of Directive 94/19 states that the 20-day time limit for reimbursement may not be invoked by a guarantee scheme in order to deny the benefit of guarantee to any depositor who has been unable to assert his claim to payment under a guarantee in time.
         
      
            63.
         
         
            If the DGS fails to comply with the 20-day time limit for repaying guaranteed deposits, depositors may also claim payment of the corresponding interest. (
                  35
               )
         
      
      
         4.
       
         Judicial guarantee and primacy of EU law
      
   
   
            64.
         
         
            Article 7(6) of Directive 94/19 states that ‘Member States shall ensure that the depositor’s rights to compensation may be the subject of an action by the depositor against the deposit-guarantee scheme’.
         
      
            65.
         
         
            Depositors may therefore use the remedies available to them in their domestic legal systems to seek the annulment of decisions and omissions on the part of a DGS and to claim compensation for the harm sustained by them as a result of that scheme.
         
      
            66.
         
         
            I would recall that, according to the Court, Article 1(3)(i) of Directive 94/19 ‘has direct effect and constitutes a rule of law intended to confer rights on individuals’. (
                  36
               )
         
      
            67.
         
         
            In their actions before the national courts, depositors may avail themselves of the principle of the primacy of EU law. Under that principle, the national court must refrain from applying any provision of domestic law that is contrary to Directive 94/19: (
                  37
               ) so far as this case is concerned, it must refrain from applying a provision of national law that is contrary to Article 1(3)(i) of that directive. (
                  38
               )
         
      
            68.
         
         
            That duty is independent of whether or not the Bulgarian legislature transposed that provision of Directive 94/19 into the domestic implementing provision. (
                  39
               )
         
      
            69.
         
         
            The principle of primacy also means that, where the domestic provision that is incompatible with EU law is incorporated into the content of a contractual clause, the national court may extend to that clause the consequences inherent in its incompatibility with EU law. It makes no difference whether the parties’ argument to that effect is advanced in an action for damages for the harm sustained or in another kind of action before the courts.
         
      
            70.
         
         
            In the circumstances at issue, there is nothing to stop the national court from applying the principle of primacy if: (a) the national provision makes the duty of the DGS to repay holders of deposits that are not yet due or payable subject to the condition of prior withdrawal of the licence held by the financial institution whose deposits have been declared unavailable; and (b) that same legislative provision is included in a contractual provision allowed by domestic law.
         
      
      
         5.
       
         Summary
      
   
   
            71.
         
         
            I am prompted, on the basis of the foregoing considerations, to suggest the following reply to the fourth question referred for a preliminary ruling:
            Article 1(3)(i) in conjunction with Articles 7(6) and 10 of Directive 94/19 must be interpreted as meaning that:
            
                     –
                  
                  
                     A deposit not due or payable in accordance with the legal and contractual conditions applicable cannot be taken into account by the competent authority for the purposes of determining whether deposits have become unavailable.
                  
               
                     –
                  
                  
                     A deposit not due or payable in accordance with the legal and contractual conditions applicable must be classified as a repayable deposit once the competent authority has determined that the financial institution’s deposits have become unavailable.
                  
               
                     –
                  
                  
                     The national court must refrain from applying a national provision which makes the obligation to repay deposits not due or payable but nonetheless forming the subject of a declaration of unavailability subject to the condition of prior withdrawal of the depositary financial institution’s licence. It must also refrain from applying a clause which incorporates the aforementioned national provision that is incompatible with EU law into a bank deposit contract.
                  
               
      
      B. Second question: interpretation and validity of the EBA Recommendation
   
   
            72.
         
         
            The second question concerns Recommendation EBA/2014/02, adopted under Article 17(3) of Regulation No 1093/2010. The referring court wishes to ascertain: (a) whether depositors, despite not being the addressees of that recommendation, may rely on it in proceedings [for damages] for the harm caused by the infringement of EU law; and (b) whether that recommendation is valid.
         
      
      
         1.
       
         EBA Recommendations
      
   
   
            73.
         
         
            The EBA is competent to intervene in the application of EU directives on DGSs, in accordance with Article 1(2) of Regulation No 1093/2010. (
                  40
               )
         
      
            74.
         
         
            In the performance of that function, the EBA may approach the ‘competent [national deposit-guarantee] authorities’. (
                  41
               ) It must do so, according to recital 20 of Regulation No 1093/2010, in order to promote a consistent approach to ensure a level playing field and the equitable treatment of depositors across the Union.
         
      
            75.
         
         
            The EBA’s powers in relation to DGSs are reflected in its ability to:
            
                     –
                  
                  
                     adopt regulatory and implementing technical standards; (
                           42
                        )
                  
               
                     –
                  
                  
                     issue recommendations (and guidelines), addressed to competent authorities or financial institutions, on the application of EU law in the fields not covered by the regulatory and implementing technical standards. (
                           43
                        ) That power is expressly applicable to DGSs; (
                           44
                        )
                  
               
                     –
                  
                  
                     taking action, in those areas where it is so empowered, to combat any infringement of EU law, (
                           45
                        ) if the national authority fails to apply it or applies it incorrectly. (
                           46
                        )
                  
               
      
            76.
         
         
            EBA recommendations are not legally binding. As their name indicates, they do not contain an instruction but simply an invitation to act. They fall within the category provided for in the fifth paragraph of Article 288 TFEU. (
                  47
               )
         
      
            77.
         
         
            However, the first subparagraph of Article 16(3) of Regulation No 1093/2010 calls upon the competent authorities and financial institutions to make every effort to comply with those recommendations.
         
      
            78.
         
         
            Understood in this way, those recommendations have some legal effect, albeit not a binding one: the competent national authorities must confirm within a period of two months whether they comply with the recommendation, intend to comply with it or do not intend to comply with it. In the last-mentioned scenario, they are required to provide reasons for their decision (second subparagraph of Article 16(3) of Regulation No 1093/2010) and the EBA must publish both the fact of non-compliance and the reasons for it. (
                  48
               )
         
      
            79.
         
         
            EBA recommendations based on Article 17(3) of Regulation No 1093/2010 exhibit some features which differentiate them from those under Article 16:
            
                     –
                  
                  
                     These (the ones adopted under Article 16) are of a general nature and call on the authority at which they are directed to explain why it is not complying with them, if that is the case (‘comply or explain’). (
                           49
                        )
                  
               
                     –
                  
                  
                     Recommendations under Article 17(3), on the other hand, are individual in nature and, for that reason, akin (but not identical) to decisions, and an ad hoc procedure has been designed to deal with the consequence of non-compliance with them.
                  
               
      
            80.
         
         
            A national authority that is the addressee of a recommendation under Article 17(3) is at risk, if it does not comply with that recommendation, (
                  50
               ) of being the subject of the infringement proceedings to which I shall refer later. In a way, those recommendations are (or may come to be) the first step in those proceedings, (
                  51
               ) which the EBA conducts with support from the Commission.
         
      
            81.
         
         
            Recommendations under Article 17(3) are also open to challenge by those concerned before the Board of Appeal of the European Supervisory authorities, pursuant to Article 60 of Regulation No 1093/2010.
         
      
            82.
         
         
            The non-final nature of EBA recommendations under Article 17(3) of Regulation No 1093/2010 and the fact that they do not have binding legal effects impact on their invocability and their openness to judicial review. In particular, those features rule out any direct review of their legality via an action for annulment under Article 263 TFEU.
         
      
            83.
         
         
            This is because, according to the Court’s case-law, actions for annulment may be brought only against binding legal acts, (
                  52
               ) depending on their actual content, the context in which they were adopted and the powers of the institution that adopted them. (
                  53
               )
         
      
            84.
         
         
            EBA recommendations may nonetheless be relied upon in a dispute before a national court that calls for an interpretation of the binding provisions of EU law to which those recommendations are linked. (
                  54
               )
         
      
            85.
         
         
            Before addressing this issue, I must refer to the procedure, provided for in Article 17(1) to (8) of Regulation No 1093/2010, (
                  55
               ) for converting, with the Commission’s intervention, EBA recommendations into binding decisions.
         
      
            86.
         
         
            As soon as the EBA identifies a supposedly incorrect or inadequate application of the provisions of EU law by a national authority, it sends that authority a recommendation informing it of the measures it must take.
         
      
            87.
         
         
            If the competent national authority does not comply with that recommendation and persists in its non-compliance, the Commission may intervene. It does so by issuing a formal opinion in which it urges the authority to take the measures necessary to comply with EU law.
         
      
            88.
         
         
            In the final stage of the procedure, the EBA may adopt an individual decision, addressed to a financial institution, requiring that institution to take the measures necessary to comply with its obligations under EU law, including the cessation of any practice, provided that the provisions in question are directly applicable. (
                  56
               )
         
      
            89.
         
         
            Decisions adopted by the EBA at this final stage must comply with the Commission’s formal opinion and are to prevail over any previous decision adopted on the same matter. They are, therefore, legal acts binding on the competent authorities bound by the formal opinion issued by the Commission. (
                  57
               )
         
      
      
         2.
       
         Recommendation EBA/2014/02 before the national court
      
   
   
            90.
         
         
            The referring court asks whether a depositor (in this case, BT) may rely on Recommendation EBA/2014/02 in the proceedings which it has instituted against the BNB.
         
      
            91.
         
         
            Recommendation EBA/2014/02, adopted under Article 17(3) of Regulation No 1093/2010, was, as I have already said, addressed to the BNB and the Fund and called upon them to take the relevant action to comply with Directive 94/19 and bring to an end the infringement of Article 1(3)(i) thereof.
         
      
            92.
         
         
            Before Recommendation EBA/2014/02 was issued, the Commission had already commenced infringement proceedings (Article 258 TFEU) against Bulgaria, and had sent that Member State a letter of formal notice (1 August 2014), although it did not subsequently take those proceedings any further. (
                  58
               )
         
      
            93.
         
         
            Recommendation EBA/2014/02 was not therefore followed by a formal opinion from the Commission and, as a result, the EBA did not issue a decision under Article 17(6) of Regulation No 1093/2010 either. (
                  59
               )
         
      
            94.
         
         
            The referring court is uncertain whether Recommendation EBA/2014/02 is compatible with EU law (Directive 94/19 and Regulation No 1093/2010). In order to address that uncertainty, I shall refer both to the invocability in the abstract of EBA recommendations before the national courts, and to the invocability of the recommendation at issue here.
         
      
      
         (a)
       
         Invocability in the abstract and reference for a preliminary ruling on validity
      
   
   
            95.
         
         
            According to the Court’s settled case-law, ‘even if recommendations are not intended to produce binding effects, the national courts are bound to take them into consideration for the purpose of deciding disputes submitted to them, in particular where the recommendations cast light on the interpretation of national measures adopted in order to implement them or where they are designed to supplement binding EU provisions’. (
                  60
               )
         
      
            96.
         
         
            I agree with Advocate General Bobek (
                  61
               ) that the obligation on national courts to ‘take recommendations into consideration’ in cases where they are called upon to decide disputes in which they apply binding EU law related to those recommendations is not consistent with the duty of ‘conform interpretation’ within the meaning of the case-law in Von Colson and Kamann. (
                  62
               )
         
      
            97.
         
         
            If national courts are required to have regard to recommendations (including those issued by the EBA) when applying binding EU law in the Member States, it follows logically that they should be able to make references to the Court of Justice for a ruling on the interpretation of the content of such recommendations. (
                  63
               ) However, can they do so in order to question the validity of those measures?
         
      
            98.
         
         
            At first sight, given that a recommendation is not open to a direct review of its legality by means of an application for annulment, it might be thought not to be open to an indirect review of its legality either, that is to say by means of a reference for a preliminary ruling on its validity. Would there be any point in invalidating a measure which does not have binding legal effects?
         
      
            99.
         
         
            If I am not mistaken, the Court has not as yet (
                  64
               ) given a categorical ruling in this regard. The judgment in Grimaldi appears to recognise by implication the possibility of making a reference for a preliminary ruling on the validity of recommendations (
                  65
               ) and Advocate General Bobek recognises that possibility explicitly. (
                  66
               )
         
      
            100.
         
         
            From my point of view, the most consistent approach is to recognise the possibility of making a reference for a preliminary ruling on the validity of recommendations, on the basis that the national court is required to take those measures into consideration when interpreting a binding provision of EU law. It would not be logical for that national court to have regard, for interpreting purposes, to a recommendation the validity of which it questions precisely because it considers it to be incompatible with EU law but does not have standing to say so. (
                  67
               )
         
      
            101.
         
         
            EBA recommendations based on Article 17(3) of Regulation No 1093/2010 are, as I have said, one of the factors that the competent court must take into account in settling the dispute. I would recall that the court’s objective in such a dispute is to determine whether the breach of EU law is sufficiently serious and thereby meets one of the three conditions upon which the liability of a State for failure to comply with EU law is contingent. (
                  68
               )
         
      
            102.
         
         
            An EBA recommendation may be taken into consideration by the national court in settling a dispute only if the content of that recommendation is consistent with the provisions of EU law the application of which it may facilitate. If the national court considers, as here, that this is not the case, it has standing to make a reference for a preliminary ruling to the Court of Justice, which alone has jurisdiction to make such a declaration of incompatibility.
         
      
      
         (b)
       
         Referring court’s uncertainty about Recommendation EBA/2014/02
      
   
   
            103.
         
         
            According to the referring court, the compatibility of Recommendation EBA/2014/02 with EU law is questionable because: (a) it is directed at a national authority (the BNB) which is not competent to determine the unavailability of deposits in relation to KTB, and is not addressed to the financial institutions; and (b) it may not be consistent with recital 27 of Regulation No 1093/2010, inasmuch as Article 1(3)(i) of Directive 94/19 does not lay down clear and unconditional obligations.
         
      
      (1) National authority competent to determine the unavailability of deposits
   
   
            104.
         
         
            In accordance with Article 4(2)(iii) of Regulation No 1093/2010, ‘competent authorities’ are, ‘with regard to deposit guarantee schemes, bodies which administer deposit-guarantee schemes pursuant to Directive 94/19/EC, or, where the operation of the deposit-guarantee scheme is administered by a private company, the public authority supervising those schemes pursuant to that Directive’.
         
      
            105.
         
         
            Those authorities may include, in addition to the DGS, the authority responsible for determining the unavailability of deposits, which, in many Member States, is the national central bank. (
                  69
               )
         
      
            106.
         
         
            In turn, Article 1(3)(i) of Directive 94/19 ‘leaves it to the discretion of the Member States to designate the authority responsible for determining whether deposits are unavailable’. (
                  70
               )
         
      
            107.
         
         
            In Kantarev, the referring court and the Court of Justice took it as read that the BNB was the authority competent to determine the unavailability of deposits in accordance with Article 1(3)(i) of Directive 94/19. (
                  71
               ) In this case, on the other hand, the referring court appears to construe the BNB’s arguments as indicating the opposite. (
                  72
               )
         
      
            108.
         
         
            Since 25 March 2014, the date of entry into force of an amendment to the Zakona za kreditnite institutsii, (
                  73
               ) the BNB has, in accordance with Article 1(2)(1) of that law, been the competent authority in the Republic of Bulgaria for supervising banking institutions within the meaning of Article 4(1)(40) of Regulation (EU) No 575/2013. (
                  74
               )
         
      
            109.
         
         
            The new law on the bank deposit guarantee (Zakon za garantirane na vlogovete v bankite) of 2015 incorporates into Bulgarian law Directive 2014/49, which designates as being competent to determine the unavailability of deposits the authority responsible for prudential supervision under Regulation No 575/2013. (
                  75
               ) There is therefore no doubt that the BNB has been the authority competent to determine the unavailability of deposits in Bulgaria since 14 August 2015.
         
      
            110.
         
         
            According to the Commission, the supervisory authority was also competent to determine the unavailability of deposits, even prior to 14 August 2015.
         
      
            111.
         
         
            It is my view, however, that, up until the adoption of Directive 2014/49, no provision of EU law established such a parallel. Recital 50 of that directive states that, ‘given the divergences in administrative practices relating to DGSs in Member States, Member States should be free to decide which authority determines the unavailability of deposits’.
         
      
            112.
         
         
            In those circumstances, it falls to the referring court to determine, in accordance with the Bulgarian law applicable at the time of the BNB’s actions in relation to KTB, whether or not the authority competent to determine the unavailability of deposits was the BNB.
         
      
            113.
         
         
            It must not be forgotten that the Court has already held in the judgment in Kantarev that the failure by the Bulgarian authorities to determine the unavailability of deposits at KTB constituted a sufficiently serious breach of Article 1(3)(i) of Directive 94/19. (
                  76
               )
         
      
      (2) Direct effect of Article 1(3)(i) of Directive 94/19
   
   
            114.
         
         
            So far as concerns the need for Recommendation EBA/2014/02 to be concerned with directly applicable requirements of EU law (in this case, Directive 94/19), Article 17(6) of Regulation No 1093/2010 lays down that condition only for the purposes of enabling the EBA to adopt decisions directed at financial institutions and calling upon them to comply with obligations imposed by provisions of EU law.
         
      
            115.
         
         
            The last sentence of recital 27 of Regulation No 1093/2010 (
                  77
               ) refers to such final decisions by the EBA, but not to the recommendations which it may adopt at the start of the procedure. This is only logical in the case of a binding EBA decision, but not in the case of a recommendation which has no binding legal effects.
         
      
            116.
         
         
            In any event, as I have already explained, Article 1(3)(i) of Directive 94/19 has direct effect, in accordance with the judgment in Kantarev, with the result that both that provision and a recommendation relating to it may be relied on by individuals before the referring court. (
                  78
               ) Consequently, the uncertainty in relation to that aspect of Recommendation EBA/2014/02 is unfounded.
         
      
      
         3.
       
         Impact of the judgment in Kantarev on Recommendation EBA/2014/02
      
   
   
            117.
         
         
            According to Recommendation EBA/2014/02, (
                  79
               ) the BNB had failed to comply with Article 1(3)(i) of Directive 94/19 inasmuch as it had not made a declaration as to the unavailability of deposits within a period of 5 days from when KTB ceased to be able to repay deposits that were due and payable.
         
      
            118.
         
         
            The EBA took the view that the BNB’s decision to place KTB under special supervision and to impose a temporary suspension of its obligations amounted to a declaration as to the unavailability of deposits within the meaning of Article 1(3)(i) of Directive 94/19.
         
      
            119.
         
         
            The judgment in Kantarev invalidates that equation. Indeed, the Court held in that judgment that the unavailability of deposits must be determined by an express act of the competent national authority and cannot be inferred from other acts of the national authorities (such as the BNB’s decision to place KTB under special supervision) nor presumed from circumstances such as those in that dispute. (
                  80
               )
         
      
            120.
         
         
            Consequently, the referring court must not take that aspect of Recommendation EBA/2014/02 into consideration when interpreting EU law, inasmuch as it is incompatible with Article 1(3)(i) of Directive 94/19.
         
      
      V. Conclusion
   
   
            121.
         
         
            In the light of the foregoing, I suggest that the Court reply to the Administrativen sad Sofia-grad (Administrative Court, Sofia, Bulgaria) as follows:
            
                     (1)
                  
                  
                     Article 1(3)(i) in conjunction with Articles 7(6) and 10 of Directive 94/19/EC of the European Parliament and of the Council of 30 May 1994 on deposit-guarantee schemes must be interpreted as meaning that:
                     
                              –
                           
                           
                              A deposit not due or payable in accordance with the legal and contractual conditions applicable cannot be taken into account by the competent authority for the purposes of determining whether deposits have become unavailable.
                           
                        
                              –
                           
                           
                              A deposit not due or payable in accordance with the legal and contractual conditions applicable must be classified as a repayable deposit once the competent authority has determined that the financial institution’s deposits have become unavailable.
                           
                        
                              –
                           
                           
                              The national court must refrain from applying a national provision which makes the obligation to repay deposits not due or payable but nonetheless forming the subject of a declaration of unavailability subject to the condition of prior withdrawal of the depositary financial institution’s licence. It must also refrain from applying a clause which incorporates the abovementioned national provision that is incompatible with EU law into a bank deposit contract.
                           
                        
               
                     (2)
                  
                  
                     A recommendation of the European Banking Authority which is based on Article 17(3) of Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC, is one of the factors which the competent court must take into consideration when interpreting Directive 94/19 and determining whether the breach of EU law is sufficiently serious within the meaning of the case-law of the Court of Justice.
                     Nonetheless, a recommendation of that kind may be taken into account by the national court only if the content of that recommendation is consistent with the provisions of EU law that it relates to and the national court is required to make a reference for a preliminary ruling to the Court of Justice if it is uncertain about the compatibility of the recommendation with those provisions.
                  
               
                     (3)
                  
                  
                     Recommendation EBA/REC/2014/02 of 17 October 2014 to the Bulgarian National Bank and the Bulgarian Deposit Insurance Fund on action necessary to comply with Directive 94/19 is contrary to Article 1(3)(i) of that directive, in so far as it treats the decision of that central bank to place a credit institution under special supervision and to impose a temporary suspension of its obligations as a determination of the unavailability of deposits.
                  
               
      (
         1
      )	Original language: Spanish.
   (
         2
      )	The Administrativen sad Varna (Administrative Court, Varna, Bulgaria).
   (
         3
      )	Directive of the European Parliament and of the Council of 30 May 1994 on deposit-guarantee schemes (OJ 1994 L 135, p. 5).
   (
         4
      )	Case C‑571/16, ‘the judgment in Kantarev’, EU:C:2018:807.
   (
         5
      )	Recommendation EBA/REC/2014/02 of 17 October 2014 to the Bulgarian National Bank and Bulgarian Deposit Insurance Fund on action necessary to comply with Directive 94/19/EC; ‘Recommendation EBA/2014/02’).
   (
         6
      )	Directive of the European Parliament and of the Council of 11 March 2009 amending Directive 94/19/EC on deposit-guarantee schemes as regards the coverage level and the payout delay (OJ 2009 L 68, p. 3). Directive 94/19 was subsequently repealed and replaced by a recast version, albeit effective only from 4 July 2019 (see Article 21 of Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes (OJ 2014 L 173, p. 149)). The time limit for transposing certain provisions of the recast version ended on 3 July 2015 (Article 20 of Directive 2014/49). At the time relevant to the settlement of this case, Directive 94/19 (as amended by Directive 2009/14) was alone applicable.
   (
         7
      )	Regulation of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC (OJ 2010 L 331, p. 12).
   (
         8
      )	That Law, published in DV No 49 of 29 April 1998, governs the creation, objectives and activities of the Bank Deposit Insturance Fund. Paragraph 1a of the 2009 supplementary provisions (DV No 44 of 12 June 2009) states that that law transposes the provisions of Directives 94/19 and 2009/14.
   (
         9
      )	The interest rates on the applicant’s deposits up to 6 November 2014 were calculated in accordance with that decision. Those interest rates are deemed to be equivalent to those laid down by contract.
   (
         10
      )	Infringement proceedings No 2014/2240. See the Commission’s press release (Bulgaria must allow bank customers to access their money) of 25 September 2014 at https://ec.europa.eu/commission/presscorner/detail/en/IP_14_1041.
   (
         11
      )	According to paragraph 30, ‘on 4 December 2014, a Bulgarian credit institution, instructed by the Fund to reimburse the deposits held by KTB Bank, paid Mr Kantarev in the amount of 86 973.81 Bulgarian leva (BGN) (approximately EUR 44465), including interest due on 6 November 2014, the date on which KTB Bank’s licence was withdrawn, namely BGN 2 673.81. In that regard, until 1 July 2014, the interest rate on the deposit of the applicant in the main proceedings complied with the terms of the contract, whereas, from that date and until 6 November 2014, the applicable interest rate was set by a decision of the management board of the BNB of 30 June 2014, which reduced the interest rate on deposits with KTB Bank’.
   (
         12
      )	The action was brought in accordance with the Bulgarian legislation on administrative liability.
   (
         13
      )	In my Opinion in Anisimovienė and Others (C‑688/15 and C‑109/16, EU:C:2017:475), point 85, I submitted that ‘the key to defining the term “deposit” as it is used in Directive 94/19 lies in the obligation to return. It is inherent in the deposit contract that the party receiving the other party’s property thereby assumes an obligation to keep and return that property. It must not be forgotten, moreover, that Directive 94/19 has as its fundamental purpose to protect savers from the closure of an insolvent credit institution. It is thus intended first and foremost to ensure that such insolvency does not make it impossible for funds to be reimbursed to savers (at least up to a certain limit), in line with the credit institution’s statutory obligation to that effect’.
   (
         14
      )	Judgments of 22 March 2018, Anisimovienė and Others (C‑688/15 and C‑109/16, EU:C:2018:209, paragraph 83); and Kantarev, paragraph 56: the Directive ‘is intended to …, by preventing massive withdrawal of deposits not only from a credit institution in difficulties but also from healthy institutions following a loss of public confidence in the soundness of the banking system’.
   (
         15
      )	There is a subtle difference between the language versions of this provision. Of those I have consulted, the Spanish uses the expression ‘depósito que haya vencido y sea pagadero’, as do the English (‘deposit that is due and payable’), the Italian (‘deposito dovuto e pagabile’) and the German (‘eine Einlage, die … zwar fällig und von einem Kreditinstitut zu zahlen ist’). The French and the Portuguese refer instead to ‘recoverability’ (‘dépôt qui est échu et exigible’ and ‘depósito que, tendo-se vencido e sendo exigível’ respectively).
   (
         16
      )	According to the Court, that provision ‘constitutes a rule of EU law intended to confer rights on individuals’, since it ‘aims, inter alia, to protect depositors’. In addition, ‘the determination that deposits are unavailable directly affects the legal situation of a depositor since that determination triggers the deposit-guarantee mechanism and, accordingly, the reimbursement of depositors’ (judgment in Kantarev, paragraphs 102 to 104).
   (
         17
      )	According to the judgment in Kantarev, paragraph 59: ‘Indeed, having regard to the wording of Article 1(3)(i) of Directive 94/19 and in particular to the fact that that provision states that the relevant competent authority must determine that deposits have become unavailable if, “in [its] view”, the necessary conditions in that regard are satisfied, that authority has some latitude. However, that latitude concerns its assessment of the conditions set out in that provision, not those conditions as such, nor the timing of such a determination.’
   (
         18
      )	Ibidem, paragraphs 99 and 100.
   (
         19
      )	Such as, for example, the BNB’s decision to place KTB under special supervision for a period of time subsequent to the emergence of its solvency issues (judgment in Kantarev, paragraph 78).
   (
         20
      )	The brevity of this period is crucial to protecting depositors and preserving the stability of the financial system. Directive 2009/14 reduced it from 21 to 5 days.
   (
         21
      )	Judgment in Kantarev, paragraphs 60 and 61.
   (
         22
      )	Ibidem, paragraphs 49 and 50.
   (
         23
      )	Ibidem, paragraph 52.
   (
         24
      )	Ibidem, paragraph 82. No emphasis in the original.
   (
         25
      )	Ibidem, paragraph 82.
   (
         26
      )	On the difficulties which this stage poses in the various Member States, see the EBA’s analysis entitled Opinion of the European Banking Authority on the eligibility of deposits, coverage level and cooperation between deposit guarantee schemes, 8 August 2019.
   (
         27
      )	Including many of those provided for in Annex I to Directive 94/19, Article 5(1) of Directive 2014/49 (inapplicable ratione temporis to this dispute) extended the list of deposits excluded from repayment by DGSs: deposits by investment firms; deposits the holder of which has never been identified; deposits by insurance undertakings and by reinsurance undertakings; deposits by collective investment undertakings; deposits by pension and retirement funds; deposits by public authorities; debt securities issued by a credit institution and liabilities arising out of own acceptances and promissory notes.
   (
         28
      )	Judgment in Kantarev, paragraph 82.
   (
         29
      )	In accordance with Article 10(1) of Directive 94/19, DGSs must be in a position to pay duly verified claims by depositors in respect of unavailable deposits within 20 working days of the date on which the competent authorities take the decision as to unavailability. In wholly exceptional circumstances, a DGS may apply to the competent authorities for an extension of the time limit which must not exceed 10 working days.
   (
         30
      )	Judgment in Kantarev, paragraph 58: this period serves to ‘avoid a credit institution’s financial difficulties, even if temporary, from resulting in massive withdrawal of deposits and those difficulties thereby spreading to the rest of the banking system’.
   (
         31
      )	See the Proposal for a Council Directive on deposit-guarantee schemes of 4 June 1992 (COM(92) 188 final, OJ 1992 C 163, p. 6).
   (
         32
      )	
   (
         33
      )	Judgment in Kantarev, paragraphs 64 and 65: ‘[This recital] refers only to the possibility of regarding deposits as unavailable where early intervention or reorganisation measures have been unsuccessful without subjecting the determination of unavailability to the fact that such preventive measures have failed. … Second, … the second sentence of the recital specifies that that possibility “should not prevent competent authorities from making further restructuring efforts during the payout delay” and therefore implies that such measures do not affect the determination of the unavailability of deposits, nor their reimbursement.’
   (
         34
      )	Ibidem, paragraph 81.
   (
         35
      )	This option is now expressly provided for in Article 7(7) of Directive 2014/49, concerning how to determine the amount repayable: ‘interest on deposits which has accrued until, but has not been credited at, the date on which a relevant administrative authority makes a determination as referred to in point 8(a) of Article 2(1) or a judicial authority makes a ruling as referred to in point 8(b) of Article 2(1) shall be reimbursed by the DGS. The limit referred to in Article 6(1) shall not be exceeded’.
   (
         36
      )	Judgment in Kantarev, paragraph 4 of the operative part.
   (
         37
      )	Judgments of 4 December 2018, Minister for Justice and Equality and Commissioner of An Garda Síochána (C‑378/17, EU:C:2018:979, paragraph 35); and of 19 November 2019, A. K. and Others(Independence of the Disciplinary Chamber of the Supreme Court) (C‑585/18, C‑624/18 and C‑625/18, EU:C:2019:982, paragraphs 160 and 161 and the case-law cited).
   (
         38
      )	In paragraph 1 of the operative part of the judgment in Kantarev, the Court held that Article 1(3) and Article 10(1) of Directive 94/19 ‘preclud[e] … national legislation according to which the determination that deposits have become unavailable is concomitant with the insolvency of that credit institution and the withdrawal of that institution’s banking licence’.
   (
         39
      )	According to the referring court, Directive 94/19, as amended by Directive 2009/14, was transposed into Bulgarian national law by the Law on bank-deposit insurance of 1998, as amended in 2009, which has been in force since 12 June 2009. However, Article 1(3)(i) of Directive 94/19 had not been incorporated into national law during the period at issue, but was incorporated as from 14 August 2015 upon the entry into force of the new Law on bank-deposit insurance, which also transposed the new Council Directive 2014/48/EU of 24 March 2014 amending Directive 2003/48/EC on taxation of savings income in the form of interest payments (OJ 2014 L 111, p. 59), not applicable in the main proceedings.
   (
         40
      )	
   (
         41
      )	See Article 4(2)(iii) of Regulation No 1093/2010, which is set out in point 104 of the present Opinion.
   (
         42
      )	Article 26(3) of Regulation No 1093/2010.
   (
         43
      )	Recital 26 and Article 16(1) of Regulation No 1093/2010.
   (
         44
      )	Article 26(2) of Regulation No 1093/2010 provides that ‘Article 16 concerning the Authority’s powers to adopt guidelines and recommendations shall apply to deposit guarantee schemes’.
   (
         45
      )	Recital 27 of Regulation No 1093/2010 describes the objective of that procedure as follows: ‘Ensuring the correct and full application of Union law is a core prerequisite for the integrity, transparency, efficiency and orderly functioning of financial markets, the stability of the financial system, and for neutral conditions of competition for financial institutions in the Union. A mechanism should therefore be established whereby the Authority addresses instances of non-application or incorrect application of Union law amounting to a breach thereof. That mechanism should apply in areas where Union law defines clear and unconditional obligations.’
   (
         46
      )	Article 17(1) of Regulation No 1093/2010.
   (
         47
      )	The Court has held that, ‘by establishing recommendations as a specific category of EU acts and by stating expressly that they “have no binding force”, Article 288 TFEU intended to confer on the institutions which usually adopt recommendations a power to exhort and to persuade, distinct from the power to adopt acts having binding force’ (judgment of 20 February 2018, Belgium v Commission, C‑16/16 P, EU:C:2018:79, paragraph 26).
   (
         48
      )	The third subparagraph of Article 16(3) of Regulation No 1093/2010. The fourth subparagraph of that provision goes on to say that, ‘if required by that guideline or recommendation, financial institutions shall report, in a clear and detailed way, whether they comply with that guideline or recommendation’.
   (
         49
      )	On the nature and scope of this type of act, see, by analogy, Vabres, R., ‘La portée des recommandations de l’Autorité européenne de marchés financiers’, in L’Europe bancaire, financière et monétaire. Liber amicorum Blanche Sousi, RD édition, Paris, 2016, pp. 95 to 104.
   (
         50
      )	The national authority to which a recommendation is addressed is obliged, within 10 working days from receipt of that recommendation, to inform the EBA of the measures it has taken or intends to take in order to ensure compliance with EU law.
   (
         51
      )	They are, in a way, similar to a letter of formal notice from the Commission in proceedings under Article 258 TFEU.
   (
         52
      )	‘Challengeable acts’ for the purposes of Article 263 TFEU are those adopted by the institutions, whatever their form, which are intended to have binding legal effects (see, to this effect, the judgments of 31 March 1971, Commission v Council, AETR, 22/70, EU:C:1971:32, paragraphs 39 and 42; of 25 October 2017, Romania v Commission, C‑599/15 P, EU:C:2017:801, paragraph 47; and of 20 February 2018, Belgium v Commission, C‑16/16 P, EU:C:2018:79, paragraph 31).
   (
         53
      )	‘To ascertain whether or not a contested measure produces such [binding] effects, it is necessary to look at its substance (judgment of 22 June 2000, Netherlands v Commission, C‑147/96, EU:C:2000:335, paragraph 27 and the case-law cited). Those effects must be assessed in accordance with objective criteria, such as the contents of the measure, taking into account, as appropriate, the context in which it was adopted and the powers of the institution which adopted the measure (judgment of 13 February 2014, Hungary v Commission, C‑31/13 P, EU:C:2014:70, paragraph 55 and the case-law cited)’ (judgment of 25 October 2017, Slovak Republic v Commission, C‑593/15 P and C‑594/15 P, EU:C:2017:800, paragraph 47).
   (
         54
      )	Judgments of 13 December 1989, Grimaldi (C‑322/88, EU:C:1989:646, paragraph 8); of 13 June 2017, Florescu and Others (C‑258/14, EU:C:2017:448, paragraph 30); and of 20 February 2018, Belgium v Commission (C‑16/16 P, EU:C:2018:79, paragraph 44).
   (
         55
      )	The rules governing that procedure were supplemented by the adoption of Decision EBA/DC/2014/100, 14 July 2014, adopting Rules of Procedure for Investigation of Breach of Union Law, at https://eba.europa.eu/sites/default/documents/files/documents/10180/15718/22650774-0ff2-42e7-bfca-b163fc2c95ae/EBA%20DC%20100%20(Decision%20on%20Rules%20of%20Procedure%20for%20Investigation%20of%20Breach%20of%20Union%20Law).pdf, as replaced by Decision EBA/DC/2016/174, 23 December 2016, adopting Rules of Procedure for Investigation of Breach of Union Law, at https://eba.europa.eu/sites/default/documents/files/documents/10180/1712606/404eb483-e1ec-4b56-9e31-e5988138455d/EBA%20DC%20174%20%28Decision%20on%20adopting%20Rules%20of%20Procedures%20for%20Investigation%20of%20Breach%20of%20Union%20Law%29.pdf.
   (
         56
      )	In accordance with recital 29 of Regulation No 1093/2010, ‘… [t]hat power should be limited to exceptional circumstances in which a competent authority does not comply with the formal opinion addressed to it and in which Union law is directly applicable to financial institutions by virtue of existing or future Union regulations’.
   (
         57
      )	Article 17(7) of Regulation No 1093/2010.
   (
         58
      )	See footnotes 10 and 27.
   (
         59
      )	As the Commission states, such a decision could not be adopted because KTB could not remedy the infringement of EU law committed by the BNB in having failed to determine that deposits had become unavailable, in accordance with Article 1(3)(i) of Directive 94/19.
   (
         60
      )	Judgment of 15 September 2016, Koninklijke KPN and Others (C‑28/15, EU:C:2016:692, paragraph 41).
   (
         61
      )	Opinion of 12 December 2017, Belgium v Commission (C‑16/16 P, EU:C:2017:959, points 99 to 102).
   (
         62
      )	Judgment of 10 April 1984 (14/83, EU:C:1984:153).
   (
         63
      )	‘It is settled case-law that the fact that a measure of Community law has no binding effect does not preclude the Court from ruling on its interpretation in proceedings for a preliminary ruling under Article 177’ (judgments of 13 December 1989, Grimaldi, C‑322/88, EU:C:1989:646, paragraph 9, and of 21 January 1993, Deutsche Shell, C‑188/91, EU:C:1993:24, paragraph 18 and the case-law cited).
   (
         64
      )	In Case C‑911/19, FBF, currently pending, the Conseil d’État (Council of State, France) asks the Court about the possibility of bringing an action for annulment and making a reference for a preliminary ruling on validity in connection with EBA Guidelines EBA/GL/2015/18 of 22 March 2016 on product oversight and governance arrangements for retail banking products. Article 16 of Regulation No 1093/2010 treats EBA guidelines and recommendations in the same way.
   (
         65
      )	‘… unlike Article 173 of the EEC Treaty, which excludes review by the Court of acts in the nature of recommendations, Article 177 confers on the Court jurisdiction to give a preliminary ruling on the validity and interpretation of all acts of the institutions of the Community without exception’ (judgment of 13 December 1989, Grimaldi (C‑322/88, EU:C:1989:646, paragraph 8); no emphasis in the original).
   (
         66
      )	Opinion of 12 December 2017, Belgium v Commission (C‑16/16 P, EU:C:2017:959, point 108).
   (
         67
      )	Judgment of 22 October 1987, Foto-Frost (314/85, EU:C:1987:452).
   (
         68
      )	Judgment of 28 July 2016, Tomášová (C‑168/15, EU:C:2016:602, paragraph 25 and the case-law cited).
   (
         69
      )	See the EBA document entitled Report on the Guarantee Scheme Payouts, 2019, pp. 16 and 17.
   (
         70
      )	Judgment in Kantarev, paragraph 99.
   (
         71
      )	Ibidem, paragraphs 36, 88, 97, 100 and 106.
   (
         72
      )	According to those arguments, on the date on which KTB was placed under special supervision, the BNB had not been designated as the competent authority within the meaning of Article 4(2)(iii) of Regulation No 1093/2010, and was not therefore empowered to determine the unavailability of the deposits of a financial institution in accordance with Directive 94/19.
   (
         73
      )	Law on Credit Institutions (DV No 59 of 21 July 2006).
   (
         74
      )	Regulation of the European Parliament and of the Council on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ 2013 L 176, p. 1).
   (
         75
      )	Article 2(8)(a) and (17) of Directive 2014/49.
   (
         76
      )	Judgment in Kantarev, paragraphs 115 and 117.
   (
         77
      )	
   (
         78
      )	Judgment in Kantarev, paragraphs 100, 106 to 108 and 117.
   (
         79
      )	Recitals 25 and 27.
   (
         80
      )	Judgment in Kantarev, paragraph 78.