On September 15, 2021, a draft report with recommendations to the Commission on a statute for European cross-border associations and non-profit organisations was presented in the European Parliament’s Legal Affairs Committee (JURI) by German rapporteur Sergey Lagodinsky (Greens/EFA). The draft report includes a proposal for a decision on a statute for a European association and for a directive on common minimum standards for non-profit organisations in the Union (minimum standards directive). The initiative aims to simplify the work of cross-border associations and non-profit organisations with the help of a European legal basis. As there are currently different conditions in the EU for the work of non-profit organisations, a uniform standard is also to be set with regard to the level of protection and competition regulations.

In the explanatory memorandum to the draft report, it is pointed out that the Union will not regulate the status of churches, religious organisations or communities, and philosophical or non-confessional organisations under national law. This is a not a complete reference to Article 17(1) of the Treaty on the Functioning of the European Union (TFEU) (The Union respects and does not prejudice the status under national law of churches and religious associations or communities in the Member States). At the same time, it is emphasized that this does not preclude organisations based solely on religious, philosophical or ideological inspiration, such as non-profit faith-based organisations, fall within the scope of these proposals.

European Association

In essence, the proposal for a decision on a statute for a European association sets out the conditions and procedures for the establishment, governance, registration and regulation of legal entities in the form of a European association. This is to be an independent and self-governing cross-border body established in perpetuity in the territory of the Union by voluntary agreement between natural or legal persons. A European association should be able to be granted non-profit status if various elements are cumulatively present. For example, the purpose and the actual activities of the organisation would have to pursue a non-profit objective that is for the benefit of society or a section thereof and thus conducive to the common good, including charitable purposes. Exemplary, though not exhaustive, are the following areas: Arts/Culture/Historic Heritage Protection, Environmental Protection and Climate Change, Advocacy for Equality, Social Justice, Humanitarian Aid and Disaster Relief, as well as Development Aid, and Protection of Vulnerable Populations (e.g., Children, Elderly, Persons with Disabilities, Homeless), Animal Welfare, Education and Training.

The direct supervision of the European association should be carried out by the respective competent authority of the member state of the headquarters of the association. In addition, an independent European association authority shall be established. In particular, it shall be responsible for the registration procedure, the keeping of the register and the receipt of complaints regarding the application of the regulation by the national competent authorities.

Minimum standards for non-profit organizations

The proposal for a Directive on common minimum standards for non-profit organizations aims to harmonize Member States’ legislation on certain aspects of the objectives and activities, registration, operations, funding and cross-border activities of non-profit organizations. Organizations with a primarily religious and non-confessional objective are to be excluded from the scope of the Directive. However, this exclusion should not apply to organizations motivated solely by religious or philosophical beliefs.

Member States are to ensure that non-profit organizations established in the Union are granted the following minimum guarantees, among others: No discrimination on the grounds of nationality, no discrimination against groups or individuals on grounds such as age, birth, etc., simplification of administrative rules, application of the principles of sound administration, right to an effective judicial remedy. Fundraising and the use of assets shall also be simplified for organisations.

At first glance, the proposals for a statute for European cross-border associations and non-profit organizations seem reasonable. The planned new regulations open up new opportunities for non-profit organizations to work in the EU member states. Especially in the exemplarily listed areas, church organizations and charities are also involved, be it in helping marginalized groups or in maintaining cultural assets. The new initiative could simplify cooperation with European partners in a low-threshold manner and reduce previous hurdles as well as additional cost factors. However, the non-profit law in the EU varies greatly from one member state to another in its legal form and especially in its tax consequences. Accordingly, the elaboration of a European non-profit law is very demanding and raises a number of questions, among others with regard to the principle of subsidiarity. An attempt by the EU Commission to establish a European foundation has already failed in the past due to resistance from the member states.

In the JURI Committee, MEP Lagodinsky’s initiative met with a positive response from the other parliamentary groups. In the new coalition agreement, the coalition partners from the SPD, Bündnis 90/Die Grünen and FDP also advocate the establishment of EU legal forms for associations and foundations. These are intended to simplify equivalence checks for non-profit organisations from other member states (recognition of foreign non-profit institutions under charitable law) and thus facilitate cross-border donations and cooperation in accordance with the requirements of the European Court of Justice (ECJ).

The link to the draft report can be found here: https://bit.ly/ekd-NL-167_Jul-3

This article was originally written in German by Nils Hanne, intern at the EKD Brussels office, and published in EKD-Informationen, No. 167, pp. 25-27, and then translated into English by Bianca Kappelhoff, Comenius-Institute.

Foto: © European Communities, 2006. Photographer: Alain Schroeder

Addendum:

On 17th February 2022, the European Parliament adopted a corresponding report with recommendations to the Commission.

Link to the draft report of MEP Lagodinsky https://www.europarl.europa.eu/doceo/document/A-9-2022-0007_EN.html

Link to the text adopted by the European Parliament: https://www.europarl.europa.eu/doceo/document/TA-9-2022-0044_EN.html

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