Proposal for a

COUNCIL REGULATION

on a statute for a European Association

THE COUNCIL OF THE EUROPEAN UNION

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 352 thereof,

Whereas:

Cross-border projects and other forms of cooperation, involving civil society in particular, contribute in a decisive way to the achievement of the Union's objectives, including the promotion of its values, and to developing many different activities of transnational relevance which benefit the general interest in numerous fields.

European cooperation across borders between citizens and representative associations is essential for creating an overarching European civil society, which is an important element of European democracy and European integration in line with Articles 11 and 15 of the Treaty on European Union.

In pursuing their objectives, many associations play a significant role in the economy and in the development of the internal market, by engaging on a regular basis in economic activity.

Directive …/… of the European Parliament and of the Council (the ‘Minimum Standards Directive’) is aimed at approximating the laws of the Member States to provide minimum standards and an enabling environment which facilitates non-profit organisations in carrying out their work.

Associations are the glue which holds our society together. They play a key role in helping, encouraging and empowering individuals to actively participate in the democratic and social life of the Union, particularly those that are facing exclusion and discrimination, and they can play a crucial part in the process of developing Union policies.

The Union should provide associations, which are a form of organisation generally recognised in all Member States, with an appropriate legal instrument capable of fostering their transnational and cross-border activities, as well as contributing to civil dialogue at Union level.

The introduction of a form of organisation at Union level would facilitate all associations in the pursuit of their cross-border objectives and activities in the internal market.

Article 63 of the Treaty on the Functioning of the European Union (TFEU) and Articles 7, 8 and 12 of the Charter of Fundamental Rights of the European Union (the ‘Charter’) protect non-profit organisations against discriminatory or unjustified restrictions to access to resources and the free movement of capital within the Union. This also concerns the ability to seek, secure and use resources of both domestic and foreign origin, which is essential to the existence and operation of any legal entity. In line with the judgment of the Court of Justice of the European Union of 18 June 2020 in case C-78/18, Commission v Hungary (1) , restrictions should only be imposed for legitimate aims, such as in the interest of national security, public safety or public order, and should be proportionate to the objective of protecting such interests, and the least intrusive means of achieving the desired objective. This concerns, among other things, restrictions deriving from rules on combating money laundering and terrorist financing, which are applied in accordance with the principles of necessity and proportionality, having regard in particular to risk-assessment obligations under international and Union law. Therefore, Member States cannot apply unreasonable, overly intrusive or disruptive measures, including reporting requirements placing an excessive or costly burden on organisations.

Natural and legal persons can create European companies based on Council Regulation (EC) No 2157/2001 (2) , European Cooperative Societies based on Council Regulation (EC) No 1435/2003 (3) , and European parties based on Regulation (EU, Euratom) No 1141/2014 of the European Parliament and of the Council (4) . However, none of those instruments provides for associations to be able to cooperate across borders.

Regulation (EC) No 1082/2006 of the European Parliament and of the Council (5) provides for the creation of European groupings of territorial cooperation (EGTC). Such groupings are formed mostly by state or local authorities or other entities governed by public law. Thus, non-governmental civil society actors and citizens are not covered.

The European Economic Interest Grouping (EEIG), as provided for in Regulation (EEC) No 2137/85 (6) , does allow certain activities to be carried out in common, while nevertheless preserving the independence of its members. However, the EEIG does not meet the specific needs of civil society associations.

It is therefore necessary to establish at Union level an appropriate harmonised regulatory framework and rules which will permit the creation of European associations with their own legal personality, and govern the cross-border formation and operation of such associations.

Political parties and trade unions, as well as churches and other religious communities and philosophical or non-confessional organisations should be excluded from the scope of this Regulation due to the lack of Union competence to regulate their status, and due to them having a particular status within national law. For these reasons, they should be treated differently from other associations lacking such status, such as faith-based, charitable non-profit organisations or organisations fighting discrimination including within the labour market.

This Regulation should be without prejudice to workers’ and trade union rights, including existing rights and protections in the context of insolvency and restructuring procedures, mergers, transfers of undertakings, and concerning information and wages. Employers should meet their obligations regardless of the form under which they are operating.

It is important to ensure that there is coordination at Union level, to avoid fragmentation and support a harmonised approach across the Union for the application of this Regulation. In this regard, this Regulation should provide for the designation of a European Associations Board, within or linked to the Commission and/or relevant institutions, bodies, offices and agencies of the Union.

The European Associations Board should invite a representative of the Fundamental Rights Agency to its meetings when they touch upon the freedom of association or the freedom of expression, in line with Article 2 of Council Regulation (EC) No 168/2007 (7) .

This Regulation should introduce specific periods for administrative procedures, including with regard to registration and the process of granting public benefit status. When assessing the implementation and application of this Regulation, the Commission should in particular look at how such periods are applied in practice.

For the purpose of verifying the requirements laid down in Article 6, the national associations bodies might ask for the names and addresses of the founding members. The identity of founders and members of non-profit organisations that are natural persons can constitute sensitive information, therefore Member States should ensure that any requirements leading to the processing of such personal data is without prejudice to Regulation (EU) 2016/679 of the European Parliament and of the Council (8) (General Data Protection Regulation), and in particular Article 9 thereof.

A European Association might wish to distinguish between different categories of members, in order to grant voting rights only to full members, while acknowledging associated members that support the cause, without the right to vote, and/or honorary members exempt from the obligation of paying a membership fee, but with voting rights. The categorisation of members should not lead to unjustified discrimination, in particular on the basis of citizenship.

As the scope of this Regulation is limited to non-profit associations, the TFEU does not provide any other legal basis than the one laid down in Article 352.

Since the objectives of this Regulation, namely the establishment of a European Association, cannot be sufficiently achieved by the Member States but can rather, for the reasons set out above, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union (TEU). In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives,

HAS ADOPTED THIS REGULATION:

Chapter I

Subject matter and general provisions

5. A European Association shall be membership-based and free to determine the composition of its membership. This may include the determination of special requirements for members, based on reasonable and objective criteria and subject to the principle of non-discrimination.

4. A European Association's objectives shall be such as to respect and support the promotion of the objectives and values on which the Union is founded, as laid down in Articles 2 and 3 of the Treaty on European Union.

3. A European Association shall be free to determine its objectives as well as the activities necessary to pursue them.

2. A European Association shall be an independent and self-governed cross-border entity established on a permanent basis within the territory of the Union, by voluntary agreement between natural or legal persons, for a common non-profit purpose.

1. This Regulation lays down the conditions and procedures governing the formation, governance, registration and regulation of legal entities in the form of a European Association.

‘member’ means a natural or legal person that voluntarily and intentionally applied to join an association to support its objectives and activities, and that was admitted into the association based on that association's statutes. Where an association is formed as the result of a conversion or merger, the willingness of membership may be conclusively assumed.

‘cross-border’ means, with regards to associations, the pursuit of the objective of transnational cooperation or cooperation across borders within the Union, or that an association's founding members come from at least two Member States, implying they are citizens or residents of a Member State if they are natural persons, or have their registered office in a Member State if they are legal persons;

‘public benefit’ means an improvement in the welfare of society or part of it, thus benefiting the general interest of society;

‘self-governed’ means, with regard to associations, having an institutional structure allowing the exercise of all internal and external organisational functions, and allowing the making of essential decisions to be carried out independently;

‘independent’ means, with regard to associations, being free from any undue State interference and not being part of a government or administrative structure. In this respect, neither receiving governmental funding nor participating in a consultative body to the government shall preclude an association from being deemed independent, as long as the autonomy of the association's functioning and decision making is not affected by such funding or participation;

‘non-profit’ means not having as a primary aim the generation of a profit, even though economic activities might be carried out. Where a profit is generated by a non-profit organisation, it is invested in the organisation for the pursuit of its objectives, and not distributed among members, founders or any other private parties. The granting of public benefit status pursuant to Article 21 is not a necessary condition for considering an organisation to have a non-profit nature. However, where public benefit status is granted, the purpose of the organisation shall be regarded as non-profit;

2. Member States shall identify the legal entity or the category of legal entities to which a European Association shall be deemed comparable for the purpose of the identification of the applicable law pursuant to paragraph 1, in a manner consistent with the provisions and the objectives of this Regulation.

1. European Associations shall be governed by this Regulation and by their statutes. For matters not dealt with by this Regulation, a European Association shall be governed by the law of the Member State in which the European Association has its registered office.

2. Each national associations body shall contribute to the consistent application of this Regulation throughout the Union. For such purpose, the national associations bodies shall cooperate with each other, including within the framework of the European Associations Board in accordance with Articles 5 and 22.

1. Member States shall designate an independent public authority (the ‘national associations body’) and shall inform the European Associations Board referred to in Article 5 and the Commission thereof. The national associations body shall be responsible for the registration of European Associations, in accordance with Article 10 and for monitoring the application of this Regulation in full compliance with the fundamental rights and freedoms of European Associations as provided for in the Treaties and under the Charter.

9. The European Associations Board may invite representatives of relevant European Agencies and independent experts, in particular from academia and civil society, to its meetings and consult with them on a regular basis.

8. The European Associations Board shall adopt its own rules of procedure and organise its own operational arrangements.

7. The discussions of the European Associations Board and its members shall be governed by Regulation (EC) No 1049/2001 of the European Parliament and of the Council (9) .

6. The European Associations Board shall be accountable to the European Parliament and to the Council, and shall report annually about its activities to the European Parliament, the Council and the Commission.

promote cooperation, and the effective bilateral and multilateral exchange of information and best practices, with and between national associations bodies;

provide opinions and recommendations to the Commission regarding structural and operational funds aimed at financing civil society, the organisation of civil dialogue, as well as protecting and promoting Union rights and values as enshrined in the TEU, the TFEU and the Charter, with a view to sustaining and furthering the development of open, rights-based, democratic, equal and inclusive societies based on the rule of law;

provide opinions and recommendations to the Commission, on its own initiative, or at the request of one of its members or of the Commission, and after consulting relevant parties, stakeholders and experts, on any issue related to European Associations or to measures resulting from the Minimum Standards Directive;

issue guidelines and recommendations, and identify best practices for national associations bodies and European Associations in order to ensure that this Regulation is applied in a consistent manner;

examine any question relating to the application of this Regulation and consult with the parties concerned and relevant stakeholders and experts, on its own initiative or at the request of one of its members or of the Commission,

decide on appeals, where relevant through its appeals committee in accordance with Articles 10 and 11;

receive, examine and follow up on complaints concerning the application of this Regulation, without prejudice to the tasks of the national associations bodies;

assess the adequacy of the identification of the comparable legal entities by the Member States pursuant to Article 3(2);

process notices of registration, dissolution and other relevant decisions concerning European Associations for the purpose of publication in the Official Journal of the European Union, as provided for in this Regulation;

set up and manage the digital database of European Associations at Union level as a tool for information and for statistical purposes, as well as for supporting structured civil dialogue on Union matters;

develop, in cooperation with the Commission and the national associations bodies, common forms or other tools to support the electronic registration of European Associations in accordance with Article 10;

5. In order to ensure that this Regulation is applied in a consistent manner, the European Associations Board shall:

3. The European Associations Board shall be composed of a representative of each national associations body and three representatives of the Commission.

Chapter II

Formation and registration

5. The formation of a European Association or any restructuring processes shall not be used to undermine workers’ or trade union rights or working conditions. In line with applicable collective agreements and national and Union law, the obligations regarding employees and creditors shall continue to be fulfilled and employees, volunteers, trade unions and workers’ representatives shall be duly informed and consulted. Collective agreements and workers’ board-level representation rights shall be respected and maintained, where applicable.

4. The departure of a founding member from a European Association shall not automatically lead to the European Association being terminated or dissolved, provided that it continues to carry out its activities based on the agreement of at least the number of persons referred to in paragraph 1, point (a).

3. The formation of a European Association shall be executed by a written agreement between all of the founding members or by written minutes documenting the constitutive meeting signed by all founding members and duly verified if such verification is required by national law for the formation of associations.

2. A Member State may provide that an entity among those identified pursuant to Article 3(2) and whose registered office is not in the Union may participate in the formation of a European Association, provided that such entity is formed in accordance with the law of a Member State, has a registered office in that Member State and has a demonstrable and continuous economic, social or cultural link with that Member State.

as the result of a merger between at least two entities identified pursuant to Article 3(2), formed under the law of Member States and which have their registered office within the Union, provided that together these entities have at least three members and that those members come from at least two different Member States.

as the result of a merger between at least one existing European Association and at least one entity belonging to the categories identified pursuant to Article 3(2); or

as the result of a merger between at least two existing European Associations; or

as the result of a conversion into a European Association of an existing entity formed under the law of a Member State, which meets the same conditions as in point (a) and which has its registered office within the Union; or

by agreement of at least three founding members; the founding members shall come from at least two Member States, implying they are citizens or residents of a Member State if they are natural persons, or have their registered office in a Member State if they are legal persons; or

European Associations shall be free to distinguish between full members and other categories of members. The statutes of a European Association shall determine the rights and obligations of each category of members, in particular as regards their right to vote.

the date of adoption of the statutes and the procedure for amending them.

the frequency with which its General Assembly shall be called; and

whether or not it disposes of founding capital and, if so, the amount of such capital;

its explicit commitment to respect the values of the Union as enshrined in Article 2 TEU;

the provisions concerning the rights and obligations of members, including voting rights and rights to submit motions;

the provisions governing the functioning, powers and responsibilities of its General Assembly, as referred to in Article 16, including majority and quorum requirements;

the provisions governing the number of members of its Board of Directors, the composition, appointment and dismissal of the Board of Directors, the conditions for the initiation, on the association's behalf, of proceedings against members of the Board of Directors, as well as the provisions governing the functioning of the Board of Directors, its powers and its responsibilities, including the powers of representation in dealings with third parties;

the rights and obligations of its members, and the different categories of members, if any, and the rights and obligations of the members in each category;

the conditions and procedures for the admission, expulsion and resignation of its members;

the name and the address of the registered offices of its founding members, where these are legal persons;

a precise statement of its objectives, its non-profit nature and, where applicable, a description of its public benefit purposes;

2. The statutes shall contain at least the following information concerning the European Association:

1. The founding members shall draw up and sign the statutes of the European Association at the time of its formation or at its constitutive meeting.

3. In the event of formation of a European Association by merger pursuant to Article 6(1), points (c), (d) or (e), its members shall decide in which of the Member States in which the merging entities are registered the registered office of the European Association is to be located.

2. In the event of the formation of a European Association by conversion pursuant to Article 6(1), point (b), its members shall decide whether the European Association's registered office is to remain in the Member State where the original entity was registered, or is to be moved to another Member State.

1. The registered office of a European Association shall be located within the territory of the Union, at the place specified in its statutes. The registered office shall be located at the place where the European Association has its central administration or the principal place of activity in the Union.

Article 10

Registration

1. The founding members of a European Association shall, within 30 days of the date of the European Association's formation as provided for in Article 6(3), submit an application for registration to the national associations body.

2. The national associations body shall, after verifying the applicants’ compliance with the requirements laid down in this Regulation, take a decision on the registration of the European Association, within 30 days of receiving the application.

3. Member State shall not impose further requirements for registration than those laid down in this Regulation.

4. If the application is accepted by the national associations body, it shall register the European Association in the appropriate national registry and communicate its decision within 15 days to the European Associations Board, which shall proceed to include the European Association in the digital database of European Associations established pursuant to Article 5(5), point (b). Within the same timeframe, the national associations body shall also communicate its decision to the Publications Office of the European Union, which shall then ensure that the information is published without delay in the Official Journal of the European Union.

5. If, within 30 days of the submission of the application for registration, the application has been rejected or has not been decided upon, the applicant may, within 15 days of receipt of the rejection decision or upon the expiry of the 30-day period for taking a decision, appeal to the Appeals Committee established under Article 11. The Appeals Committee shall take a decision on the application for registration within 30 days of the appeal. If the Appeals Committee approves the application for registration or fails to deliver a decision within 30 days, the national associations body shall proceed with the registration within 15 days of such decision or failure to act. Any decision to reject an application for registration shall be communicated to the applicants, and shall include duly substantiated grounds for the rejection.

6. Upon inclusion in the appropriate national registry pursuant to paragraph 4, the registration of a European Association shall take effect throughout the Union.

7. Registration shall occur via the common registration forms or other tools referred to in Article 5. The registration procedure shall be electronic and accessible and shall allow applicants to use the official language or one of the official languages of the Member State where the European Association has its registered office. Registration fees shall not be higher than those applicable to the entities referred to in Article 3(2) and shall not exceed the administrative costs or constitute an undue financial burden, subject to the principle of proportionality. The national associations bodies shall make it possible to register by non-electronic means.

8. Upon receipt of an application by a European Association for the granting of public benefit status, the national associations body shall assess the application in relation to the requirements laid down in this Regulation. The national associations body shall not impose any requirements other than those laid down in this Regulation.

9. The national associations body shall, within 15 days of receipt of the application for public benefit status, adopt a binding decision on the application. That period may be extended by 15 days in duly motivated cases, where the assessment of the application requires further examination or the opinion of the European Associations Board is requested. The national associations body shall inform the European Association immediately of the duration of, and the grounds for, any extension of the initial 15-day period.

10. If the application for public benefit status is accepted by the national associations body, it shall register that decision in the appropriate national registry and communicate its decision within 15 days to the European Associations Board, which shall proceed to include the public benefit status of the European Association in the digital database of European Associations established pursuant to Article 5(5), point (b). Within the same timeframe, the national associations body shall also communicate its decision to the Publications Office of the European Union, which shall then ensure that the information is published without delay in the Official Journal of the European Union.

11. Upon inclusion in the appropriate national registry pursuant to paragraph 10, the decision adopted regarding the public benefit status shall take effect throughout the Union.

12. Where the application for public benefit status has been rejected or has not been decided upon within the period referred to in paragraph 9, the applicant may, within 15 days of receipt of the rejection decision, appeal to the Appeals Committee, or, at the expiry of the period for taking a decision, refer the application to the Appeals Committee established under Article 11. The Appeals Committee shall take a decision within 15 days of the appeal or of referral of the application, or within 30 days in duly motivated cases. If the Appeals Committee approves the application for public benefit status or fails to deliver a decision within the period provided for in the first subparagraph, the national associations body shall proceed to grant the public benefit status within 15 days of such decision or failure to act. Any decision to reject an application for registration shall be communicated to the applicants, and shall include duly substantiated grounds for the rejection.