Last month, the European Commission adopted a proposal for a Directive on European cross-border associations, which should benefit nonprofits. Our Brussels correspondent Patrick Gibbels takes us through the history of this proposal, why it’s needed, and what we can expect to happen next.
On 5 September 2023, the European Commission adopted a proposal for a Directive on European cross-border associations, which aims to facilitate intra-EU cross-border activities for NPOs by removing some of the legislative and administrative burden. EFA has been in support of the European Parliament’s legislative initiative procedure of a similar name, calling for legislative action by the European Commission in this regard. As such, EFA is pleased to see that the EU Commission has now tabled this proposal.
The history of the proposal
In 2020, led by Rapporteur MEP Sergey Lagodinsky, the European Affairs Committee tabled a report calling on the Commission to put forward a directive on common measures for NPOs and also a Regulation establishing a statute for European cross-border associations and nonprofit organisations. The proposal recognised that NPOs in particular faced multiple legal and administrative challenges when attempting to operate across borders. It argued that minimum EU standards and being able to acquire a legal personality would help NPOs overcome these barriers.
In February 2022, the European Parliament adopted this proposal with an overwhelming majority. On 5 September 2023, the Commission followed through with their proposal for a Directive. Currently, national legal provisions for NPOs are patchy, and insufficient to build a real pan-European civil society. NPOs do not receive uniform acknowledgment of their legal personality and capacity, and often need to register for a second time or even form a new legal entity in that Member State. An estimated 310,000 nonprofit associations are currently affected by those obstacles.
The Commission’s proposal introduces an additional legal form of a European cross-border association (ECBA) in Member States’ national legal systems, “which is specifically designed for cross-border purposes and will reduce legal and administrative burden when it comes to the recognition and establishment of non-profit associations engaging in activities in another Member State”. Once established in one Member State, an ECBA will be recognised automatically and will be able to engage in activities in all Member States, including economic activities, thereby allowing non-profit associations to flourish across the EU with minimal barriers to their operations.
Whilst the European Parliament had asked for Regulation as well, which is arguably a better tool for harmonization, the Commission chose to propose a Directive instead, which offers more flexibility for implementation by the Member States. The likely reason for this will be the difficulty to harmonize what has been described as a patchwork of 24 legal systems.
Since this proposal was born in the European Parliament, it is likely to receive continued support from this institution, which will ultimately enter into negotiations with the EU council. The question is which amendments to the Commission proposal the Parliament might table and whether these will be good for NPOs. It is important for civil society to monitor these developments closely, and to inform decision makers when and where necessary regarding the potential impact their proposals and amendments might have on NPOs’ operations, thereby shepherding the proposal to a positive outcome.
For more on this: read our news story here.
About Patrick Gibbels
Patrick is EFA’s public affairs columnist in Brussels.
He is the director of Gibbels Public Affairs.
Follow Patrick @GPA_Brussels.
Read more from Patrick in our View from Brussels column here.
Picture by Jonas Horsch on Pexels
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