COMMISSION STAFF WORKING DOCUMENT Subsidiarity Grid Accompanying the document Proposal for a Directive of the European Parliament and of the Council on European cross-border associations
Date: 2023-09-05
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: European association, cross-border dimension, free movement of capital, free movement of goods, freedom to provide services, non-profit organisation, right of establishment, single market

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  EN 

   EUROPEAN COMMISSION  Brussels, 5.9.2023  SWD(2023) 292 final  COMMISSION STAFF WORKING DOCUMENT Subsidiarity Grid Accompanying the document Proposal for a Directive of the European Parliament and of the Council on European cross-border associations {COM(2023) 516 final} - {SEC(2023) 306 final} - {SWD(2023) 293 final} - {SWD(2023) 294 final}  
 
 
Subsidiarity Grid 

1.  Can the Union act? What is the legal basis and competence of the Unions’ intended action? 

1.1 Which article(s) of the Treaty are used to support the legislative proposal or policy initiative? 

The legislative basis for this proposal is Article 114 of the Treaty on the Functioning of the European 
Union  (‘TFEU’)  which  provides  for  the  adoption  of  measures  to  ensure  the  establishment  and 
functioning  of  the  internal  market,  in  combination  with  Article  50  TFEU  which  empowers  the 
European  Parliament  and  the  Council  to  adopt  provisions 
in  order  to  attain  freedom  of 
establishment. 

1.2 Is the Union competence represented by this Treaty article exclusive, shared or supporting in 
nature? 

In the case of internal market policy, the Union’s competence is shared according to Article 4 TFEU. 

2.  Subsidiarity Principle: Why should the EU act? 

2.1 Does the proposal fulfil the procedural requirements of Protocol No. 21: 

-  Has there been a wide consultation before proposing the act? 
- 

Is  there  a  detailed  statement  with  qualitative  and,  where  possible,  quantitative  indicators 
allowing an appraisal of whether the action can best be achieved at Union level? 

The  Impact  Assessment  accompanying  the  proposal  for  a  Directive  on  European  Cross-Border 
Associations  was  subjected  to  a  comprehensive  consultation  process  (between  August  and 
November 2022) to gather the views of different stakeholders (including, among others, associations 
and  other  non-profit organisations,  service  providers  and  competent  authorities).  The  consultation 
activities carried out were: 

– 

– 

– 

A call for evidence, which received 50 replies; 

A public consultation, which received 64 replies;  

A  targeted  consultation  through  an  online  survey,  with  responses  from  domestic  and  cross-
border  associations  (88  in  total,  including  umbrella  organisations),  service  providers  (in  total 
12),  academia/research  institutes  (in  total  14),  competent  authorities  (in  total  11);  and  64 
interviews with associations and 29 umbrella organizations regrouping national associations. 

Additionally,  the  Commission  informed  and  discussed  regularly  with  the  members  of  the  GECES 
(Expert group on social economy and social enterprises (2018-2024) on the initiative on cross-border 
activities of associations. 

A  synopsis  report  summarising  all  the  stakeholders’  positions  and  contributions  to  the  legislative 
initiative is attached as Annex 2 to the  Staff Working Document on the  Impact Assessment report. 
Section 3 of the Impact Assessment report and section 2 of the proposal’s explanatory memorandum 
contain a section on the principle of subsidiarity as presented in question 2.2 below. 

2.2 Does  the  explanatory  memorandum  (and  any 

impact  assessment)  accompanying  the 
Commission’s  proposal  contain  an  adequate  justification  regarding  the  conformity  with  the 
principle of subsidiarity? 

1 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12016E/PRO/02&from=EN  

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The explanatory memorandum contains the following text:  

“The  overall  objective  of  the  proposal  is  to  remove  identified  barriers  to  the  cross-border  activities 
and cross-border mobility of associations in the EU single market.  

There  is  a  strong  value  added  by  acting  at  EU  level  because  the  problems  that  the  Commission’s 
proposal  tackles  are  of  cross-border  nature.  Currently,  there  is  little  coordination  by  individual 
Member States to facilitate cross-border activities, mobility and capital transfers of associations. Such 
coordination,  although  theoretically  possible,  appears  unlikely  in  the  near  future.  For  instance, 
following the withdrawal in 2005 of the Commission proposal for a Council regulation on the statute 
for  a  European  association,  only  three  Member  States  have  legislated  in  ways  to  facilitate  cross-
border activities of associations as to registration duties. In particular, individual action or inaction by 
Member States mainly focuses on regulating associations in their specific national context and does 
not  address  the  cross-border  dimension,  with  exception  of  existing  legislation  in  a  few  Member 
States. Relying on Member State action alone, it is likely that the legal, administrative, and economic 
barriers for associations would therefore persist, resulting in the continuation of legal uncertainty and 
red tape and not allowing a level playing field for associations operating or wishing to operate in the 
single market.  

The objective of this initiative, therefore, cannot be achieved sufficiently by the Member States alone 
and  can  be  better  achieved  at  Union  level.  Only  EU  action  will  enable  the  adoption  of  common  or 
mutually recognised rules that would ease the cross-border activities and mobility of associations. By 
acting,  the  EU  will  provide  a  clear  and  predictable  framework  enabling  associations  to  fully  benefit 
from  their  single  market  freedoms.  Indirectly,  EU  intervention  may  potentially  help  to  promote  the 
diversity and strengthen the potential of the non-profit organisations, of which associations are the 
dominant legal entities, thereby contributing to unleashing the full potential of the non-profit sector 
in the European Union. 

Furthermore, the proposal is targeted at those associations interested in operating in more than one 
Member States to benefit from recognition of their legal personality across the Union, as well as to 
have improved clarity on administrative procedures applying when operating cross-border, including 
providing  goods  and  services,  receiving  capital,  welcoming  members,  merging  with  associations 
cross-border and converting cross-border This could not be achieved without a EU intervention.” 

The  impact  assessment  (sections  2  and  3)  provides  a  justification  regarding  conformity  with  the 
principle  of  subsidiarity,  and  addresses  the  issue  in  the  context  of  the  options  analysed,  where 
relevant. 

2.3 Based  on  the  answers  to  the  questions  below,  can  the  objectives  of  the  proposed  action  be 

achieved sufficiently by the Member States acting alone (necessity for EU action)? 

Reducing  uncertainty  and  administrative  burden  faced  by  associations  operating  or  whishing  to 
operate  cross-border  cannot  be  achieved  sufficiently  by  Member  States  acting  alone.  Indeed,  the 
study and the  stakeholders’  consultations performed to support the proposal showed that  barriers 
and  legal  loopholes  between  Member  States  legal  regimes  exist,  thereby  hampering  associations 
from expanding cross-border and from conducting cross-border activities (including economic ones) 
in the single market, moving freely and receiving capital. It is therefore necessary for the EU to take 
action.  

These barriers and legal loopholes are the result of a regulatory fragmentation impacting on cross-
border  activities  of  associations.  In  particular,  the  legal  comparative  analysis conducted  during  the 

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Impact  Assessment  supporting  this  proposal,  as  well  as  the  overall  stakeholders’  consultation, 
demonstrated the need for associations to easily operate cross-border in the single market in order 
to reach their objectives. An EU-level intervention is necessary to lower the barriers as identified in 
the  following  areas:  1)  the  cross-border  activities  of  associations  in  relation  to  their  right  to 
establishment,  thereby  hampering  associations’  capabilities  to    provide  services  and  goods  in  the 
single market; 2) the movement of capital in the single market; 3) the possibilities for cross-border 
membership  and  participation  in  governance  bodies;  and  4)  associations’  possibilities  for  cross-
border  mobility.  This,  in  turn,  would  promote  a  level  playing  field  for  associations  throughout  the 
single  market  and  would  enable  them  to  unleash  their  full  potential  to  generate  economic  and 
societal value in the EU. An intervention at EU level is necessary to address this issue. 

(a)  Are  there  significant/appreciable  transnational/cross-border  aspects  to  the  problems  being 

tackled? Have these been quantified? 

As  indicated  in  the  European  Parliament’s  resolution  of  February  2022  and  as  emerged  from  the 
Public  consultation  and  the  consultation  activities  conducted  in  the  framework  of  the  impact 
assessment  supporting  the  Commission’s  proposal  ,  the  intensity  of  cross-border  activity  of 
associations  does  not  reach  its  full  potential  in  the  EU.  The  identified  problem  has  therefore  a 
transnational  dimension:  an  estimated  310  000  associations  appear  to  already  perform  their 
activities  in  several  Member  States  and  an  estimated  theoretical  maximum  potential  of  350  000 
associations could be engaged in cross-border activities, should the identified barriers be removed. 
Only  EU  action  will  enable  the  adoption  of  common  or  mutually  recognised  rules  that  would 
ultimately ease the cross-border activities and mobility of associations in the single market, including 
through reduction of excess costs. 

(b)  Would national action or the absence of the EU level action conflict with core objectives of 

the Treaty2 or significantly damage the interests of other Member States? 

National action  is, in principle, adequate for the development of associations operating at  national 
level.  However,  rules  on  cross-border  aspects  of  associations  are  generally  not  provided  for  in 
national  legislations  or,  when  provided,  they  differ  or  they  may  be  effectively  constraining 
associations operating in more than one Member State. This results in regulatory fragmentation legal 
uncertainty  about  the  applicable  rules  and  unjustified  administrative  practices  and  costs  for 
associations,  creating  barriers  for  those  associations  engaged  or  wishing  to  engage  in  activities  in 
more than one Member State.  

Therefore,  national  action  or  the  absence  of  EU  level  action  would  not  conflict  with  the  Treaty 
objectives  of  establishing  the  single  market,  but  it  might  undermine  the  proper  functioning  of  the 
single market  as differing legal frameworks in Member States in the area lead to legal uncertainty, 
fragmentation of the single market, additional costs and administrative burden for associations when 
operating across borders. 

(c)  To  what  extent  do  Member  States  have  the  ability  or  possibility  to  enact  appropriate 

measures? 

The  Commission  proposal  aims  to  reduce  legal  and  administrative  barriers  for  cross-border 
associations and enable a level playing field for them to pursue their economic and societal roles. In 
doing  so,  Member  States  remain  the  solely  competent  authorities  in  terms  of  permitting  the 

2 https://europa.eu/european-union/about-eu/eu-in-brief_en  

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deployment of administrative practices such as the registration procedure of associations at national, 
regional  or  local  level  and  remain  responsible  for  designation  of  a  register  for  the  purpose  of 
registration (allowing the use of already existing registers and promoting online solutions). 

(d)  How  does  the  problem  and  its  causes  (e.g.  negative  externalities,  spill-over  effects)  vary 

across the national, regional and local levels of the EU? 

The identified problems do not significantly vary across national, regional and local levels across the 
EU. Associations that want to operate across border in the single market are faced with uncertainty 
and administrative burden and costs in the whole EU. 

(e)  Is the problem widespread across the EU or limited to a few Member States? 

The problem that the proposal aims to address is widespread across the EU and is not limited to a 
few  Member  States  and  is  present  in  four  main  areas:  cross-border  activities  of  associations  in 
relation to their right to establishment and provision of services and goods; the movement of capital; 
cross-border  membership  and  participation  in  governance  bodies;  and  cross-border  mobility.  As 
previously  underlined,  the  regulatory  landscape  in  the  single  market  for  cross-border  activities 
associations is fragmented and will remain so in the absence of an EU intervention. 

(f)  Are Member States overstretched in achieving the objectives of the planned measure? 

The consultations and the study performed in the preparation of this proposal revealed that Member 
States  responding  to  the  consultation  could  support  the  initiative.  It  could  also  be  concluded  that 
facilitating  and  enhancing  the  cooperation  between  Member  States  could  be  beneficial  to  achieve 
the objectives of this proposal. This need is addressed in the proposal through the use of the Internal 
Market  Information  system  (IMI).  Furthermore,  a  dedicated  network  of  national  competent 
authorities will be set-up in order to ensure the proper implementation of the Directive.  

(g)  How  do  the  views/preferred  courses  of  action  of  national,  regional  and  local  authorities 

differ across the EU? 

The  overall  stakeholders’  consultation  indicated  that  views  and  preferred  courses  of  action  are 
mostly similar across the EU, and do not differ between national, regional and local authorities. 

2.4 Based  on  the  answer  to  the  questions  below,  can  the  objectives  of  the  proposed  action  be 
better achieved at Union level by reason of scale or effects of that action (EU added value)? 

The objectives of the proposed action can be better achieved at Union level by reason of scale and 
the added value that the change will bring. 

(a)  Are there clear benefits from EU level action?  

There is a clear added value from acting at the EU level. In particular, when it comes to the freedom 
of  establishment,  the  freedom  to  provide  and  receive  services  and  goods,  as  well  as  the  free 
movement of capital, the absence of harmonised rules  hampers  associations  from  unleashing their 
full  potential  to  generate  economic  and  societal  value  in  the  EU.  Differing  requirements  for 
associations to operate across borders, create legal uncertainty, fragmentation of the single market 
and result in additional costs for associations. An EU level action will prevent this and therefore has 
added value.  

(b)  Are there economies of scale? Can the objectives be met more efficiently at EU level (larger 

benefits per unit cost)? Will the functioning of the internal market be improved? 

Overall,  Member  State-level  measures  are  of  limited  benefit,  in  the  absence  of  a  simple  way  to 
obtain  recognition  of  the  legal  personality  of  associations,  facilitating  mobility  as  well  as  the  free 

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movement of capital, and the provision of goods and services cross-border.  

Based  on  a  combination  of  stakeholder  surveys,  expert  interviews  and  literature,  the  Impact 
Assessment underpinning the  legislative  proposal  concluded  that  the proposal can generate  excess 
cost reductions for associations. For example, the time allocated by associations’ employees for the 
management of the  cross border-related administrative procedures, as well as related direct costs, 
will  be  reduced.  The  proposal  is  also  expected  to  bring  indirect  economic  benefits  by  facilitating 
activities  of  associations  operating  or  with  the  ambition  to  operate  across  borders,  for  example  in 
terms of less burdensome access to new cross-border markets and cross-border provision of goods 
and services. This will allow associations to expand and achieve economies of scale. 

Finally,  for  Member  States  authorities,  an  EU  intervention  will  provide  economies  of  scale  for  the 
performance  of  their  administrative  cooperation  tasks  thanks  to  the  creation  of  a  dedicated 
information  exchange  mechanism  through  the  Internal  Market  Information  System  (IMI),  the 
encouragement for digitalisation of procedures and to the enhanced cooperation through the setting 
of a dedicated network among competent authorities. 

(c)  What  are  the  benefits  in  replacing  different  national  policies  and  rules  with  a  more 

homogenous policy approach? 

As explained in section 2.2, introducing in national legal systems a legal form of association for cross-
border  purposes  which  co-exists  alongside  existing  legal  forms  for  associations  in  national  law  will 
create an enabling regulatory framework for the cross-border activities and mobility of associations. 
In the absence of an EU intervention, current obstacles are expected to continue and increase given 
the overall shrinking civic space trends observed in Europe. A more homogenous policy approach at 
EU level would be necessary to address this fragmentation and face societal trends. 

(d)  Do  the  benefits  of  EU-level  action outweigh  the  loss of  competence  of  the  Member  States 
and  the  local and  regional  authorities  (beyond  the  costs  and  benefits of  acting  at  national, 
regional and local levels)? 

There  is  no  loss  of  competence  for  Member  States  and  local  or  regional  authorities  as  they  retain 
their  regulatory  competences  with  regards  to  the  supervision  and  enforcement  of  the  rules 
prescribed by the Directive, including registration procedures. 

(e)  Will there be improved legal clarity for those having to implement the legislation? 

There will be one set of rules applicable, which aims at improving legal clarity  

3.  Proportionality: How the EU should act 

3.1  Does  the  explanatory  memorandum  (and  any  impact  assessment)  accompanying  the 
Commission’s proposal contain an adequate justification regarding the proportionality of the 
proposal  and  a  statement  allowing  appraisal  of  the  compliance  of  the  proposal  with  the 
principle of proportionality? 

The explanatory memorandum (Chapter 2) contains a section on the principle of proportionality, as 
summarised below.  

“The  proposed  measures  do  not  go  beyond  what  is  necessary  to  achieve  the  objectives  of  the 
initiative.  This  initiative  is  targeted  at  associations  who  wish  to  operate  cross-border  and  will  not 
necessarily  lead  Member  States  to  change  their  existing  association  law  nor  will  it  have  direct 

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implications on associations not interested in cross-border activities, in proportion with the scale of 
the identified problem (8% of all associations in the EU are estimated as currently engaged in cross-
border activities).   

A  new  legal  form  for  cross-border  associations  at  Member  State  level  will  allow  for  flexibility  for 
Member  States  to  adapt  it  to  their  respective  settings.  Moreover,  the  provisions  enshrined  in  this 
Directive will not require changing Member States legislation for all associations.”  

The measures proposed are well targeted as they focus on aspect concerning cross-border activities. 

The summary of impacts on stakeholders of the preferred policy option is presented in Annex 3 of 
the impact assessment. The assessment of all policy options in terms of proportionality is provided in 
sections 7 and 8 of the impact assessment. 

3.2 Based  on  the  answers  to  the  questions  below  and  information  available  from  any  impact 
assessment,  the  explanatory  memorandum  or  other  sources,  is  the  proposed  action  an 
appropriate way to achieve the intended objectives? 

The explanatory memorandum contains the following text:  

“The proposal is targeted at associations which operate or wish to operate cross-border and will not 
necessarily  lead  Member  States  to  change  their  existing  association  law  nor  will  it  have  direct 
implications  on  associations  not  interested  in  cross-border  activities.  The  content  and  form  of  the 
proposal are, therefore in proportion with the scale and scope of the identified problem.  

The  envisaged  new  legal  form  for  cross-border  associations  introduced  at  national  level  in  the 
Member States,  will  allow  flexibility  for  Member States  to  adapt  it  to their  respective  settings.  The 
provisions  prescribed  in  the  proposed  Directive will  not  require  changing  Member States  legislation 
governing existing forms of associations established in their territory.  

The analysis carried out for all policy options, which took into account their effectiveness, efficiency, 
coherence  and  proportionality,  showed  that  all  options  could  have  a  positive  impact  and  that  the 
preferred measure ranked highest in the analysis in relation to efficiency, coherence, proportionality 
and subsidiarity, as indicated in Section 7 of the Impact Assessment.” 

Furthermore, the Impact Assessment accompanying the legislative proposal analysed the impacts of 
the  policy  options  through  a  quantitative  and  qualitative  assessment  that  proves  the  proposal  is 
proportionate and does not exceed what is necessary to achieve the intended objectives. 

(a)  Is the initiative limited to those aspects that Member States cannot achieve satisfactorily on 

their own, and where the Union can do better? 

The proposal only covers those aspects where actions at the Union level represent an added value. 

(b)  Is  the  form  of  Union  action  (choice  of  instrument)  justified,  as  simple  as  possible,  and 
coherent with the satisfactory achievement of, and ensuring compliance with the objectives 
pursued  (e.g.  choice  between  regulation,  (framework)  directive,  recommendation,  or 
alternative regulatory methods such as co-legislation, etc.)? 

The proposed instrument is a Directive, since Article 50 TFEU requires the European Parliament and 
the Council to act by means of directives. Consequently, Member States will be able – by transposing 
the  EU  rules  into  their  national  laws  –  to  take  account  of  the  need  for  consistency  and  coherence 

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within their national legal systems.  

In addition, a Directive is considered the most appropriate legal instrument as it allows to adapt the 
prescribed  rules  to  national  settings.  Moreover,  the  overall  level  of  precision  of  the  proposed 
instrument  will  help  mitigate  the  potential  risk  of  fragmentation  that  may  arise  from  divergent 
interpretations among the Member States 

(c)  Does the Union action leave as much scope for national decision as possible while achieving 
satisfactorily the objectives set? (e.g. is it possible to limit the European action to minimum 
standards or use a less stringent policy instrument and approach?) 

The overall level of precision of the proposed instrument will mitigate possible risk of fragmentation 
resulting  from  divergent  interpretations  among  the  Member  States,  while  leaving  them  the 
possibility  to  adapt  the  prescribed  rules  to  their  national  settings.  This  is  particularly  relevant  for 
Member States having traditionally strong cross-border civil society ties. 

As  emerged  from  the  impact  assessment,  limiting  the  European  action  to  e.g.  non-legally  binding 
options would not solve the problems identified. 

(d)  Does  the 

initiative  create  financial  or  administrative  cost  for  the  Union,  national 
governments,  regional or local authorities, economic operators or citizens? Are these costs 
commensurate with the objective to be achieved? 

The  proposed  directive  does  not  entail  unnecessary  costs  for  the  Union,  national  governments, 
regional or local authorities. Nor it does impose new administrative obligations on associations, while 
it  is  expected  to  lower  launch  costs  as  well  as the  recurrent  costs  of  associations  operating  across 
borders. Member States may face some adaptation costs, which, however, have not emerged to be 
significant. The Impact Assessment has shown that on average up to EUR 100 000 per Member State 
additional  one-off  adaptation  costs  could  be  expected.  Once  this  adjustment  is  implemented,  the 
public authority is expected to return to its business as usual. Hence, no significant additional annual 
running costs can be expected. 

This  proposal  will  have  limited  implications  in  terms  of  costs  for  the  Commission  relating  to  two 
expenditure  categories  for the  necessary extension of the  Internal Market Information System  and 
the Digital Single Gateway, which would be covered under the Single Market Programme. 
As  explained  in  the  impact  assessment  (sections  6  and  7),  the  proposal  will  not  imply  costs  for 
associations, but it will lead to savings in administrative burden. The financial and budgetary impacts 
are explained in detail in the legislative financial statement accompanying this proposal. 

(e)  While  respecting  the  Union  law,  have  special  circumstances  applying  in  individual  Member 

States been taken into account? 

The  proposal  is  framed  around  commonalities  found  across  existing  national  regimes,  while  also 
making room for Member States to adapt to their national settings and traditions. The Commission 
also conducted a comparative legal analysis of associations laws and regimes in the EU as well as a 
comparative  legal  analysis  of  mergers  rules  in  Member  States  which  have  informed  the  Impact 
Assessment  accompanying  the  legislative  proposal  on  those  aspects  relevant  to  the  identified 
problem.  

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