What changed between the plenary report and the adopted text

Removed:Recital 6 a (new): (6a) Although the majority of the activities of non-profit organisations are currently carried out at national level, an increasing number of them are operating across borders, thereby strengthening the social cohesion between Member States and deepening the internal market. In order to ensure that the socio-economic potential of non-profit associations and related entities and their contribution to the European integration is fully exploited, all barriers, hindering the cross-border operation of their activities should be removed.

Removed:Recital 7: (7) A fully functioning internal market for the activities of non-profit associations is essential in order to promote economic and social growth across Member States. At present, barriers within the internal market and the lack of harmonisation prevent non-profit associations from extending their operations beyond their national borders, as they often encounter unjustifiable restrictions, thereby hindering the effective operation of the internal market. Working towards a fully effective and functioning internal market requires full freedom of establishment for all activities which contribute to the objectives of the Union thereby bolstering cohesion and cooperation throughout the Union.

Added:THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Removed:Recital 8: (8) In order to establish a genuine internal market for the economic activities of non-profit associations, it is necessary to abolish any unjustified restrictions and barriers on the freedom of establishment, the free movement of services, the free movement of goods and the free movement of capital that still apply in the laws of certain Member States. These restrictions create legal uncertainty, discourage and hinder non-profit associations from operating cross-border, not least because they impose on them a specific need to allocate resources to unnecessary administrative or compliance activities, which has a particularly deterrent effect in view of their non-profit nature. Therefore, Member States should not apply restrictive or disruptive measures which can amount to excessive or costly burden on non-profit organisations. The freedom of association does not only include the ability to create or dissolve an association but also the ability for that association to operate without unjustified interference by a Member State. It also includes the ability to seek, secure and use resources, which is essential to the operation of any association. In particular, Article 63 and 65 TFEU together with Articles 7, 8 and 12 of the Charter of Fundamental Rights of the European Union (the 'Charter') enshrine the freedom of association at all levels and protect non-profit organisations against discriminatory, unnecessary and unjustified restrictions regarding the free movement of capital…

Added:Having regard to the Treaty on the Functioning of the European Union, and in particular Article 50 and Article 114 thereof,

Removed:Recital 9: (9) These barriers arise due to inconsistencies in the national legal frameworks of Member States. The legal framework in which non-profit associations carry out their activities in the Union is based on national law, without harmonisation at Union level. Presently, non-profit associations do not receive uniform recognition of their legal personality and capacity throughout the Union and often need to follow different administrative procedures in multiple Member States, for example, to register for a second time in another Member State or even form a new legal entity in order to engage in activities in a Member State other than the one in which they are established. The fundamental elements concerning the mobility of non-profit associations within the Union remain inadequately regulated, resulting in legal ambiguity for all non-profit associations with cross-border activities. For instance, when non-profit associations intend to relocate their registered office to a new Member State, uncertainties persist regarding relocation. In particular, the lack of a possibility of transferring the registered office without going through a liquidation hinders non-profit associations from acting, moving, and restructuring across borders within the Union. National rules diverge and often fail to provide clear solutions and procedures for the exercise of cross-border mobility and economic activities of non-profit associations.

Added:Having regard to the proposal from the European Commission,

Removed:Recital 9 a (new): (9a) The heterogeneity of national laws and the lack of approximation of practices also leads to an uneven playing field due to the different market conditions and the diverse obstacles that non-profit organisations face in different Member States, for example when opening bank accounts, raising and accounting funds, including foreign funds, benefitting from public support measures and schemes and verifying and complying with requirements with regard to transparency duties.

Added:After transmission of the draft legislative act to the national parliaments,

Removed:Recital 10: (10) The ability to access and channel funds and capital efficiently across borders is necessary in order to facilitate non-profit associations’ activities in the internal market. Cooperation and the exchange of best practices between non-profit associations from different States can help to increase the efficiency and impact of their actions at European level. By promoting common standards and a cohesive approach, red tape can be reduced and cross-border financial support encouraged in a more fluid and efficient way. This includes remuneration for economic activities, but also donations, inheritance, or other forms of funding. Different regulatory frameworks and existing restrictions in the Member States regarding receiving, soliciting donations, and similar contributions in whatever form result in fragmentation in the internal market and constitute a barrier to the functioning of the internal market.

Added:Having regard to the opinion of the European Economic and Social Committee,

Removed:Recital 11: (11) Moreover, laws of certain Member States impose requirements regarding nationality or legal residence on members of non-profit associations or on members of the executive body of such non-profit associations. Such requirements should be eliminated in order to protect the exercise of freedom of establishment and freedom of association of EU citizens, which would encourage the active participation of Union citizens in various non-profit organisations, irrespective of their country of nationality or residence.

Added:Acting in accordance with the ordinary legislative procedure,

Removed:Recital 11 a (new): (11a) Taking into account their particular nature and their non-profit purpose, a large part of the activities of non-profit associations may be organised in a non-commercial way and thus be non-economic in nature.

Added:Whereas:

Removed:Recital 12: (12) The freedom of association is crucial for the functioning of democracy, as it constitutes an essential condition for the exercise of other fundamental rights by individuals, including the right to freedom of expression and information. As recognised in the Charter of Fundamental Rights of the European Union and in the Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR), freedom of association is a fundamental right. Furthermore, the essential role of civil society and representative organisations in contributing to democracy at all levels is considered a fundamental value of the Union, as recognised, in particular by Article 11 of the Treaty on European Union (TEU), and requires the existence of an open, transparent and regular dialogue. This implies therefore also that frameworks for such dialogue should be used for the implementation and application of this Directive.

Added:(1) In accordance with Article 26(2) of the Treaty on the Functioning of the European Union (TFEU), the internal market comprises an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured. To achieve this objective, Article 50 TFEU provides for the European Parliament and the Council to act by means of directives in order to attain freedom of establishment as regards a particular activity. In addition, Article 114 TFEU provides for the European Parliament and the Council to adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States, which have as their object the establishment and functioning of the internal market.

Removed:Recital 13: (13) It is important to ensure convergence at Union level and avoid any unnecessary fragmentation. Thus, it is necessary to put in place harmonised rules facilitating the pursuit of non-profit associations’ cross-border activities. Existing national rules on cross-border associations should be harmonised so that they allow those non-profit associations to take a legal form specifically designed to facilitate operations on a cross border basis. That legal form should be provided in Member State’s domestic legal orders through the adaptation of their respective rules on non-profit associations. This legal form, which is to be designated as the ‘European cross-border association’, (‘ECBA’), should be automatically recognised by all Member States and will allow non-profit associations to overcome the obstacles they face in the internal market, while respecting Member States’ traditions regarding non-profit associations. These are important steps towards the deepening and ultimately the completion of the internal market.

Added:(2) The elimination of barriers to the development of activities of non-profit associations across Member States is essential in order to attain their freedom of establishment, as well as other fundamental freedoms such as the freedom to provide and receive capital and the freedom to provide and receive services within the internal market. By approximating the provisions of national law which affect the exercise of these freedoms, this Directive serves the objective of improving the functioning of the internal market. In so doing, this Directive will further serve the objectives of strengthening European integration, ensuring equal treatment, by promoting social fairness and prosperity for EU citizens and facilitating the effective exercise of the freedom of assembly and of association throughout the Union. [Am. 1]

Removed:Recital 13 a (new): (13a) Non-profit associations are currently not automatically recognised when they operate in a country other than the one in which they are established, and often have to set up a new entity, concerning around 310,000 associations in the EU, with 185,000 more entities likely to engage in cross-border activities within a simplified framework. The ECBA statute should facilitate the cross-border activities of non-profit associations and their mobility. The accompanying certificate should provide them with this automatic recognition and enable them to develop their activities in other Member States, thus fully enjoy the benefits of the internal market.

Added:(3) The European Parliament adopted a resolution on 17 February 2022 with recommendations to the Commission on a statute for European cross-border associations and non-profit organisations.

Removed:Recital 15: (15) Trade unions and associations of trade unions should not be allowed to establish ECBAs, since they have a particular status in national law. It should however be possible for such organisations to become a non-founding member of an ECBA, if they choose to do so.

Added:(4) On 9 December 2021, the European Commission adopted an action plan for the social economy. In the action plan, the Commission put forward specific measures to create opportunities for social economy entities to start up and scale up, and to ensure that the social economy and its potential are more visible. The European Parliament welcomed the action plan in its resolution issued on 6 July 2022.

Removed:Recital 16: (16) Nor political parties and associations of political parties should be allowed to establish ECBAs, as they enjoy a particular status within national law and Union law as laid down in Regulation (EU, Euratom) 1141/2014 of the European Parliament and of the Council 39 .

Added:(5) Following up on the action plan for the social economy, the Commission recommended concrete measures to support the social economy, which prioritises people, social and environmental causes over profit. The proposal for a Council Recommendation on developing social economy framework conditions of 13 June 2023 includes recommendations for Member States to design and implement social economy strategies. On the same day, the Commission also published two Staff Working Documents to improve the understanding of relevant tax rules for social economy entities and cross-border public-benefit donations.

Removed:Recital 17: (17) Churches and other religious organisations and philosophical or non-confessional organisations, within the meaning of Article 17 TFEU, as well as associations of these entities, have a particular status in national law, which should not be adversely affected by this Directive. Therefore, these entities should also be allowed to establish or become a member of an ECBA, if they choose to do so.

Added:(6) Among the legal forms available in the non-profit sector and the social economy, the legal form of the non-profit association is the choice for the large majority. In addition to contributing to the Union's objectives and to achieving goals that are in the public interest, non-profit associations make an important contribution to the internal market by engaging on a regular basis in a wide range of non-economic and economic activities, for example by offering services in sectors such as social services and health, communication and information, advocacy, culture, the protection of the environment, education, recreation, sports, and in the promotion of scientific and technological advances. This is true when the pursuit of economic activities is the principal activity or objective of the non-profit association, and in other cases. [Am. 2]

Removed:Recital 18: (18) The establishment of an ECBA should be the result of an agreement between natural persons that are Union citizens or legally resident third-country nationals, or legal entities established in the Union, except persons that have been convicted of offences concerning money laundering, associated predicate offences 40 , or terrorist financing or are subject to measures that prohibit their operations in a Member State on the same grounds. In this regards a proportionate level of accountability, public reporting and the transparency of financing and governance structure should be ensured. In view of the non-profit purpose of the ECBA, where an ECBA is constituted by legal entities, they should also have a non-profit purpose.

Added:(6a) Although the majority of the activities of non-profit organisations are currently carried out at national level, an increasing number of them are operating across borders, thereby strengthening the social cohesion between Member States and deepening the internal market. In order to ensure that the socio-economic potential of non-profit associations and related entities and their contribution to the European integration is fully exploited, all barriers, hindering the cross-border operation of their activities should be removed. [Am. 3]

Removed:Recital 19 – paragraph 1: The non-profit purpose of an ECBA should mean that, when a profit is generated by means of economic activities, it should be used only in pursuit of the objectives of the ECBA, as defined in its statutes, and may not be redistributed directly nor indirectly among its members, including members of its governing bodies, nor among its founders or any other private parties. The direct beneficiaries of organisations aimed at providing care services for individuals with specific social needs or health conditions, should not be considered to be private parties in this regard. Therefore, there should be an asset lock requiring that no distribution of assets to members is to take place, even in the event of dissolution. In the latter case, residual assets should be transferred in a disinterested manner, such as to other non-profit associations or a local authority to be used for a similar purpose.

Added:(7) A fully functioning internal market for the activities of non-profit associations is essential in order to promote economic and social growth across Member States. At present, barriers within the internal market and the lack of harmonisation prevent non-profit associations from extending their operations beyond their national borders, as they often encounter unjustifiable restrictions, thereby hindering the effective operation of the internal market. Working towards a fully effective and functioning internal market requires full freedom of establishment for all activities which contribute to the objectives of the Union thereby bolstering cohesion and cooperation throughout the Union. [Am. 4]

Removed:Recital 20 a (new): (20a) The values of the European Union enshrined in Article 2 of the Treaty on European Union should be respected both in the purpose and in the exercise of the activity of an ECBA, everywhere and at all times. To that end, the statutes of the ECBA should include a declaration that it will respect these values in its objectives and in the pursuit of its activities.

Added:(8) In order to establish a genuine internal market for the economic activities of non-profit associations, it is necessary to abolish any unjustified restrictions and barriers on the freedom of establishment, the free movement of services, the free movement of goods and the free movement of capital that still apply in the laws of certain Member States. These restrictions create legal uncertainty, discourage and hinder non-profit associations from operating cross-border, not least because they impose on them a specific need to allocate resources to unnecessary administrative or compliance activities, which has a particularly deterrent effect in view of their non-profit nature. Therefore, Member States should not apply restrictive or disruptive measures which can amount to excessive or costly burden on non-profit organisations. The freedom of association does not only include the ability to create or dissolve an association but also the ability for that association to operate without unjustified interference by a Member State. It also includes the ability to seek, secure and use resources, which is essential to the operation of any association. In particular, Article 63 and 65 TFEU together with Articles 7, 8 and 12 of the Charter of Fundamental Rights of the European Union (the 'Charter') enshrine the freedom of association at all levels and protect non-profit organisations against discriminatory, unnecessary and unjustified restrictions regarding the free movement of capital. This principle has been further developed by the Court of Justice in its case law, including in its judgement of 10 June 2020 in Case C-78/18, Commission vs Hungary. [Am. 5]

Removed:Recital 21: (21) The cross-border element of an ECBA is central. Therefore, an ECBA should carry out or have in its statutes the objective to carry out at least part of its activities across borders in the Union, in at least two Member States, and have founding members with links to at least two Member States, either based on citizenship or residence in the case of natural persons, or based on the location of their registered office in the case of legal entities. The notion of “cross-border” under the present Directive is without prejudice to this notion in other Union legislation.

Added:(9) These barriers arise due to inconsistencies in the national legal frameworks of Member States. The legal framework in which non-profit associations carry out their activities in the Union is based on national law, without harmonisation at Union level. Presently, non-profit associations do not receive uniform recognition of their legal personality and capacity throughout the Union and often need to follow different administrative procedures in multiple Member States, for example, to register for a second time in another Member State or even form a new legal entity in order to engage in activities in a Member State other than the one in which they are established. The fundamental elements concerning the mobility of non-profit associations within the Union remain inadequately regulated, resulting in legal ambiguity for all non-profit associations with cross-border activities. For instance, when non-profit associations intend to relocate their registered office to a new Member State, uncertainties persist regarding relocation. In particular, the lack of a possibility of transferring the registered office without going through a liquidation hinders non-profit associations from acting, moving, and restructuring across borders within the Union. National rules diverge and often fail to provide clear solutions and procedures for the exercise of cross-border mobility and economic activities of non-profit associations. [Am. 6]

Removed:Recital 23: (23) Harmonisation throughout the Union of the key features of ECBAs’ legal personality and capacity and their automatic recognition across Member States and the registration procedure, without Member States laying down diverging rules on these issues, is an essential condition for ensuring a level-playing field for all ECBAs, required under the single market, and creating legal certainty. That may lead to cost reduction, improved access to the single market for associations, increased offer and quality of services and products, better cooperation and will foster innovation. The aspects of ECBAs’ activities that are not harmonised by this Directive should be governed by the national rules that apply to the single most similar or most commonly used legal form of non-profit association in national law. This applies, for example, with regard to national rules on the potential acquisition of a public benefit status or the application of employment legislation in accordance with the legislation in the Member State in which the relevant activities and operations take place. Such entities, independently of their name in the domestic legal order, should in all cases be membership-based and self-governed, have a non-profit purpose, and have legal personality. Self-governed in this context means 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. To…

Added:(9a) The heterogeneity of national laws and the lack of approximation of practices also leads to an uneven playing field due to the different market conditions and the diverse obstacles that non-profit organisations face in different Member States, for example when opening bank accounts, raising and accounting funds, including foreign funds, benefitting from public support measures and schemes and verifying and complying with requirements with regard to transparency duties. [Am. 7]

Removed:Recital 23 a (new): (23a) Associations are already permitted to acquire a public benefit status in all Member States, though the requirements for and implications of acquiring such a status are very diverse. Such preferential status, regardless of its exact denomination, entails a number of benefits. With regard to recognising or granting a public benefit status, different approaches exist in national rules throughout the Union. In some Member States, such legal status is connected, for example, with fiscal privileges or access to public funding, and associations can decide to acquire such status in addition to their legal form, provided that they satisfy specific requirements and depending on the jurisdiction in which they operate. For example, entities legally established in the form of an association can acquire the legal status and denomination of non-profit organisations, public benefit organisations, non-governmental organisations, civil society organisations, third sector organisations, charities, provided they satisfy the legal requirements for such a status and denomination. This Directive should not affect such preferential status and should promote the activities of associations irrespective of such status under national rules. The Commission should, however, assess in the future whether it is appropriate to further develop legislation to also regulate such status at Union level.

Added:(10) The ability to access and channel funds and capital efficiently across borders is necessary in order to facilitate non-profit associations’ activities in the internal market. Cooperation and the exchange of best practices between non-profit associations from different States can help to increase the efficiency and impact of their actions at European level. By promoting common standards and a cohesive approach, red tape can be reduced and cross-border financial support encouraged in a more fluid and efficient way. This includes remuneration for economic activities, but also donations, inheritance, or other forms of funding. Different regulatory frameworks and existing restrictions in the Member States regarding receiving, soliciting donations, and similar contributions in whatever form result in fragmentation in the internal market and constitute a barrier to the functioning of the internal market. [Am. 8]

Removed:Recital 24: (24) The rules applicable to ECBAs under this Directive should be without prejudice to measures adopted by Member States to prevent the misuse of non-profit associations for public policy and public security reasons and to ensure transparency of certain capital movements, in the context of the fight against terrorism financing and money laundering, when required by Union law, or national law in compliance with Union law . Such measures should be legitimate and appropriate, not go beyond what is strictly necessary and the impact of the measure on the ECBA should be proportionate to the objective pursued. To ensure these safeguards are upheld, an application of these measures should be based on a case-by-case assessment by the Member State's competent authorities.

Added:(11) Moreover, laws of certain Member States impose requirements regarding nationality or legal residence on members of non-profit associations or on members of the executive body of such non-profit associations. Such requirements should be eliminated in order to protect the exercise of freedom of establishment and freedom of association of EU citizens, which would encourage the active participation of Union citizens in various non-profit organisations, irrespective of their country of nationality or residence. [Am. 9]

Removed:Recital 26: (26) ECBAs should be able to decide freely on their rules of operation. Any limitation on this freedom imposed by a Member State should be applied in a general and non-discriminatory way, prescribed by law, justified by an overriding reason in the public interest, be appropriate and limited to what is strictly necessary, and the impact of the measure on the ECBA should proportionate to the objective pursued.

Added:(11a) Taking into account their particular nature and their non-profit purpose, a large part of the activities of non-profit associations may be organised in a non-commercial way and thus be non-economic in nature. [Am. 10]

Removed:Recital 27: (27) Articles 52, 62 and 65 TFEU and relevant case law also apply to ECBAs. These TFEU Articles provide for the justification of measures restricting the freedom of establishment, freedom to provide services and free movement of capital on grounds including public policy, public security and public health. Furthermore, the concept of ‘overriding reasons in the public interest’ to which reference is made in certain provisions of this Directive has been developed by the Court of Justice in its case law. Measures by Member States that are liable to hinder or make less attractive the exercise of those Treaty freedoms should be permitted only where they can be justified by objectives listed in the Treaty or by overriding reasons in the public interest recognised by Union law. While no exhaustive definition exists, the Court of Justice has recognised that justifications are possible on various grounds such as public policy, public security and public health, the maintenance of order in society, social policy objectives, the protection of the recipients of services, consumer protection, the protection of workers, or the protection of creditors, provided that the other conditions are met. Such measures need, in any event, to be prescribed by law, appropriate and limited to what is strictly necessary, and the impact of the measure on the ECBA needs to be proportionate to the objective pursued. This is particularly relevant as many associations are active in the public interest areas m…

Added:(12) The freedom of association is crucial for the functioning of democracy, as it constitutes an essential condition for the exercise of other fundamental rights by individuals, including the right to freedom of expression and information. As recognised in the Charter of Fundamental Rights of the European Union (CFR) and in the Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR), freedom of association is a fundamental right. Furthermore, the essential role of civil society and representative organisations in contributing to democracy at all levels is considered a fundamental value of the Union, as recognised, in particular by Article 11 of the Treaty on European Union (TEU), and requires the existence of an open, transparent and regular dialogue. This implies therefore also that frameworks for such dialogue should be used for the implementation and application of this Directive. [Am. 11]

Removed:Recital 29: (29) In order to ensure that ECBAs are able to effectively perform their activities and ensure equal treatment vis-à-vis non-profit associations in national law, ECBAs should not be treated less favourably than the non-profit association of the single most similar or most commonly used legal form in the domestic legal order of the home Member State where it operates.

Added:(13) It is thereforeimportant to ensure convergence at Union level and avoid any unnecessary fragmentation. Thus, it is necessary to put in place harmonised rules facilitating the pursuit of non-profit associations’ cross-border activities. Existing national rules on cross-border associations should be harmonised so that they allow those non-profit associations to take a legal form specifically designed to facilitate operations on a cross border basis. That legal form should be provided in Member State’s domestic legal orders through the adaptation of their respective rules on non-profit associations. This legal form, which is to be designated as the ‘European cross-border association’, (‘ECBA’), should be automatically recognised by all Member States and will allow non-profit associations to overcome the obstacles they face in the internal market, while respecting Member States’ traditions regarding non-profit associations. These are important steps towards the deepening and ultimately the completion of the internal market. [Am. 12]

Removed:Recital 30: (30) In accordance with the principles of equality and non-discrimination and to ensure the freedom of association, in the implementation and application of this Directive there should be no discrimination against any group or individual on any grounds, such as birth, age, colour, sex and gender, sexual orientation, gender identity, health conditions, immigration or residency status, genetic features, language, national, ethnic or social origin, political or any other opinion, membership of a national minority, physical or mental disability, property, race, religion or belief, or other status.

Added:(13a) Non-profit associations are currently not automatically recognised when they operate in a country other than the one in which they are established, and often have to set up a new entity, concerning around 310,000 associations in the EU, with 185,000 more entities likely to engage in cross-border activities within a simplified framework. The ECBA statute should facilitate the cross-border activities of non-profit associations and their mobility. The accompanying certificate should provide them with this automatic recognition and enable them to develop their activities in other Member States, thus fully enjoy the benefits of the internal market. [Am. 13]

Removed:Recital 31: (31) To facilitate the cooperation among Member States and between Member States and the Commission, Member States should designate a competent authority responsible for the application of the rule transposing this Directive (‘competent authority’) and inform the Commission and the ECBA committee thereof. The competent authorities should keep in close contact with the Commission and the ECBA committee. The Commission should publish the list of competent authorities on a public website and update it without undue delay when changes occur. To have a comprehensive overview of the legal treatment of ECBAs in Member States, Member States should notify the Commission of the names and tasks of relevant authorities, other than the competent authorities, established or designated for the purposes of the national rules applicable to the single most similar or most commonly used legal form of non-profit association in national law, if applicable.

Added:(14) Furthermore, allowing non-profit associations to fully enjoy the freedom of establishment in the Union via a single registration that would be valid throughout the Union and automatic recognition of their legal personality is directly related to, and necessary for, the functioning of the internal market and the possibility to effectively benefit from the rights derived from that freedom.

Removed:Recital 33: (33) In view of their non-profit purpose, ECBAs should be able to apply for funding from a public or private source in the Member State(s) in which they operate on a non-discriminatory basis. Therefore, the same rules should apply to the ECBA as those applicable to the single most similar or most commonly used legal form. There should be no restriction on the ECBA’s right to receive and provide funding, except where a restriction is prescribed by law, justified by an overriding reason in the public interest or where the Member State can prove that the ECBA flagrantly and repeatedly breaches the values of the Union enshrined in Article 2 TEU through its activities, where it is compliant with Union law, appropriate and limited to what is strictly necessary, and where the impact of the restriction on the ECBA is proportionate to the objective pursued.

Added:(15) Trade unions and associations of trade unions should not be allowed to establish ECBAs, since they have a particular status in national law. It should however be possible for such organisations to become a non-founding member of an ECBA, if they choose to do so. [Am. 14]

Removed:Recital 35 a (new): (35a) In line with the right to freedom of expression and freedom of association, it is important to ensure that Member States do not limit the right to participation of associations in public life and public or political debate, which could concern for example the organisation of or participation in public interest advocacy or peaceful assembly. Such participation in the public or political debate should however not be meant to benefit any single particular political party or political candidate.

Added:(16) Nor political parties and associations of political parties should be allowed to establish ECBAs, as they enjoy a particular status within national law and Union law as laid down in Regulation (EU, Euratom) No 1141/2014 of the European Parliament and of the Council. [Am. 15]

Removed:Recital 36 a (new): (36a) The possibilities offered by the digitalization should be fully exploited by Member States in order to facilitate the exercise of the freedom of association and establishment as well as in order to reduce the administrative burdens and compliance costs. To facilitate the registration process, including in the case of mergers and conversions, Member States should ensure that the application for registration may be submitted online. That should also apply to the requests for transfer of the registered office and notification for a change of information part of the ECBA certificate. Digital means should be encouraged also to facilitate and speed up, where possible, administrative procedures and cooperation.

Added:(17) Churches and other religious organisations and philosophical or non-confessional organisations, within the meaning of Article 17 TFEU, as well as associations of these entities, should also not be allowed to establish an ECBA, due to the lack of Union competence to regulate their status, and due to them havinghave a particular status in national law, which should not be adversely affected by this Directive. Therefore, these entities should also be allowed to establish or become a member of an ECBA, if they choose to do so. [Am. 16]

Removed:Recital 38: (38) Member States should be entitled to require a registered ECBA to make a declaration, provide information, request or obtain authorisations for engaging in particular activities only where such requirements are (i) applied in a general and non-discriminatory way, (ii) prescribed by law, (iii) justified by overriding reasons in the public interest, (iv) appropriate and limited to what is strictly necessary, and the impact of the measure on the ECBA should proportionate to the objective pursued. Such requirements may be connected, for example, to the specificities of certain sectors, like healthcare. Where Member States provide for such additional procedures, this information should be made publicly available in a clear, easily accessible and comprehensible way, in order to ensure that an ECBA is able to comply with these requirements.

Added:(18) The establishment of an ECBA should be the result of an agreement between natural persons that are Union citizens or legally resident third-country nationals, or legal entities established in the Union, except persons that have been convicted of offences concerning money laundering, associated predicate offences, or terrorist financing or are subject to measures that prohibit their operations in a Member State on the same grounds. In this regards a proportionate level of accountability, public reporting and the transparency of financing and governance structure should be ensured. In view of the non-profit purpose of the ECBA, where an ECBA is constituted by legal entities, they should also have a non-profit purpose. [Am. 17]

Removed:Recital 39: (39) To prevent fraud and to ensure the reliability of the relevant register, it is important that Member States verify the identity of the legal representatives of the ECBA. The verification of identity is particularly important, especially if the application for registration is conducted electronically. Due to the variety of different practices in Member States, the specific methods of verifying identity should remain in the prerogative of the Member State concerned. This approach provides the necessary flexibility to take account of the specific traditions, specificities and procedures of each Member State, while ensuring that security and authenticity standards are respected at Union level.

Added:(19) The non-profit purpose of an ECBA should mean that, when a profit is generated by means of economic activities, it should be used only in pursuit of the objectives of the ECBA, as defined in its statutes, and may not be redistributed directly nor indirectly among its members, including members of its governing bodies, nor among its founders or any other private parties. The direct beneficiaries of organisations aimed at providing care services for individuals with specific social needs or health conditions, should not be considered to be private parties in this regard. Therefore, there should be an asset lock requiring that no distribution of assets to members is to take place, even in the event of dissolution. In the latter case, residual assets should be transferred in a disinterested manner, such as to other non-profit associations having the sameor a local authority to be used for a similar purpose. [Am. 18]

Removed:Recital 40: (40) While respecting the freedom of establishment and association, the registration of an ECBA should be denied in cases of failure to comply with the formal requirements for the registration, as laid down in this Directive, where the application is not complete or if the objectives described in the statutes contravene Union law or national law compliant with Union law. Furthermore, the registration must be rejected, if the application fails to comply with the basic requirements set out in this Directive to constitute an ECBA, namely the non-profit purpose, the minimum number of founding members and the cross-border element in terms of carrying out or having the objective of carrying out activities in at least two Member States and founding members with links with at least two Member States. Any refusal to register an ECBA should be made in writing and duly reasoned by the competent authority.

Added:(20) In a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail, ECBAs should pursue objectives that are compatible with the values enshrined in Article 2 of the Treaty on European Union (‘TEU’) such as the respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. In addition, it should not be possible to use ECBAs for terrorist financing, tax evasion, tax avoidance, money laundering or any criminal offences or illegal purposes.

Removed:Recital 41: (41) Member States should be required to establish a register or make use of an existing national register for the purposes of the registration and for maintaining and publishing information on ECBAs. This register should contain information about ECBAs and the submitted documents. As the information kept in the register may become outdated, Member States should ensure that the ECBA notifies any changes concerning the information on ECBAs to the competent authority and that the information held in the register is updated. In order to ensure transparency especially for members of an ECBA and its creditors, if applicable, the ECBA certificate, the liquidation and the dissolution of an ECBA are pieces of information that should be made publicly available until the end of the financial year following the dissolution of an ECBA. The interoperability solutions developed as part of the implementation of the Proposal for a Regulation of the European Parliament and of the Council laying down measures for a high level of public sector interoperability across the Union42 can further support Member States to move towards cross-border interoperability of their registers. To ensure that information about the existence of an ECBA is still available even after its dissolution, all data retained and stored in the register should be kept for at least 5 years after dissolution Any national or European requirements concerning the authenticity, reliability and the appropriate legal form of docume…

Added:(20a) The values of the European Union enshrined in Article 2 of the Treaty on European Union should be respected both in the purpose and in the exercise of the activity of an ECBA, everywhere and at all times. To that end, the statutes of the ECBA should include a declaration that it will respect these values in its objectives and in the pursuit of its activities. [Am. 19]

Removed:Recital 44: (44) To harmonise the procedure of transfer of registered office of an ECBA, Member States should ensure that a transfer of registered office is decided by the decision-making body of the ECBA concerned. The ECBA should submit the request with the relevant documents to the competent authority of the Member State to which the transfer is to be made and inform in parallel the competent authority of its home Member State when submitting the request for transfer. One of the relevant documents in the event of a transfer would be a report explaining the safeguards for creditors and employees, if applicable under Union or national law. Member States should ensure that the preparation of such a report does not impose an excessive administrative burden. Where applicable, the proposed statutes of the ECBA should be amended according to the requirements of the national law of the Member State to which the ECBA requests the transfer. Upon transfer of the registered office, the ECBA becomes an ECBA under the national law of the new home Member State. This change of applicable law ensuing from the transfer of the registered office should not lead, in order to avoid duplications, the competent authority of the new home Member State to verify any element already verified during the registration in the previous Member State and harmonised by this Directive. The competent authority of the Member State to which the ECBA intends to transfer the registered office should reject the request of tran…

Added:(21) The cross-border element of an ECBA is central. Therefore, an ECBA should carry out or have in its statutes the objective to carry out at least part of its activities across borders in the Union, in at least two Member States, and have founding members with links to at least two Member States, either based on citizenship or residence in the case of natural persons, or based on the location of their registered office in the case of legal entities. The notion of “cross-border” under the present Directive is without prejudice to this notion in other Union legislation. [Am. 20]

Removed:Recital 45: (45) In compliance with the freedom of assembly and of association, an ECBA should be dissolved only by decision of its members or by a decision of the competent authority of the home Member State. Where the dissolution of an ECBA is the result of a decision of its members, it should be taken by two-thirds of the votes representing at least half of the total of the members. The dissolution of an ECBA may be involuntary by decision of the competent authority of the home Member State of the ECBA, as a last resort. Therefore involuntary dissolution should only happen where an ECBA does not respect its non-profit purpose, or where its activities constitute a threat to public order, or a flagrant and repeated breach of the values of the Union enshrined in Article 2 TEU through its activities has been established under the condition that the dissolution is preceded by a risk assessment, that it is prescribed by law, appropriate and strictly necessary, and that the dissolution of the ECBA is proportionate to the objective pursued. In this case, the competent authority should communicate to the ECBA a formal comprehensively reasoned notice of its concerns and hear the ECBA in order to give the ECBA the opportunity to reply or rectify the situation within a reasonable period of time. Any decision for involuntary dissolution should be duly reasoned and include a comprehensive written justification.

Added:(22) In order to ensure that ECBAs fulfil the objectives underlying their creation, the degree of harmonisation of the features and rights of an ECBA should be proportionate to the scale and scope of the identified problems non-profit associations face when engaging in cross-border activities.

Removed:Recital 46: (46) The dissolution of the ECBA should lead to its liquidation. The liquidation of ECBAs should be compliant with Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (EIR 2105)47 which requires that the law applicable to insolvency proceedings and their effects should be that of the Member State within the territory of which such proceedings are opened. In line with the non-profit purpose of ECBAs, any assets of a dissolved ECBA should be transferred to a non-profit entity carrying out an activity similar to one of the activities carried out by the dissolved ECBA or, transferred to a local authority which should utilise them for an activity or for the pursuit of an objective that is similar to one of the activities or objectives of the dissolved ECBA.

Added:(23) Harmonisation throughout the Union of the key features of ECBAs’ legal personality and capacity and their automatic recognition across Member States and the registration procedure, without Member States laying down diverging rules on these issues, is an essential condition for ensuring a level-playing field for all ECBAs, required under the single market, and creating legal certainty. That may lead to cost reduction, improved access to the single market for associations, increased offer and quality of services and products, better cooperation and will foster innovation. The aspects of ECBAs’ activities that are not harmonised by this Directive should be governed by the national rules that apply to the single most similar typeor most commonly used legal form of non-profit association in national law. This applies, for example, with regard to national rules on the potential acquisition of a public benefit status or the application of employment legislation in accordance with the legislation in the Member State in which the relevant activities and operations take place. Such entities, independently of their name in the domestic legal order, should in all cases be membership-based and self-governed, have a non-profit purpose, and have legal personality. Self-governed in this context means 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. To ensure transparency and legal certainty, Member States should notify the Commission and the ECBA committee of the single legal form of non-profit association that is most similar or most commonly used in national law and of theof those rules applicable to such legal form. [Am. 21]

Removed:Recital 47: (47) To enable an ECBA to prove that it has registered within a Member State and to further facilitate cross-border procedures and simplify and reduce formalities, the competent authorities should, as the final step of the registration process, issue a certificate (’ECBA certificate’) which contains the essential registration information, including the name of the association followed or preceded by the acronym 'ECBA', the address of its registered office, and the names of the legal representatives. To facilitate the use of this certificate in various Member States without additional adaptations or compliance costs, the Commission should establish a standardised template available in all languages of the Union. Therefore, in order to ensure uniform conditions for the implementation of this act, implementing powers should be conferred on the Commission to produce a standardised template including in relation to the technical specifications of the template. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council48. Those implementing acts should be adopted in accordance with the examination procedure referred to in Article 5 of Regulation (EU) No 182/2011 of the European Parliament and of the Council.

Added:(23a) Associations are already permitted to acquire a public benefit status in all Member States, though the requirements for and implications of acquiring such a status are very diverse. Such preferential status, regardless of its exact denomination, entails a number of benefits. With regard to recognising or granting a public benefit status, different approaches exist in national rules throughout the Union. In some Member States, such legal status is connected, for example, with fiscal privileges or access to public funding, and associations can decide to acquire such status in addition to their legal form, provided that they satisfy specific requirements and depending on the jurisdiction in which they operate. For example, entities legally established in the form of an association can acquire the legal status and denomination of non-profit organisations, public benefit organisations, non-governmental organisations, civil society organisations, third sector organisations, charities, provided they satisfy the legal requirements for such a status and denomination. This Directive should not affect such preferential status and should promote the activities of associations irrespective of such status under national rules. The Commission should, however, assess in the future whether it is appropriate to further develop legislation to also regulate such status at Union level. [Am. 22]

Removed:Recital 48: deleted

Added:(24) To ensure that Member States have the appropriate tools to combat terrorism financing and ensure transparency of certain capital movements, The rules applicable to ECBAs under this Directive should be without prejudice to measures adopted by Member States to prevent the misuse of non-profit associations for public policy and public security reasons and to ensure transparency of certain capital movements, in the context of the fight against terrorism financing and money laundering, when required by Union law, or national law in compliance with Union law. Such measures should be legitimate and appropriate, not go beyond what is strictly necessary and the impact of the measure on the ECBA should be proportionate to the objective pursued. To ensure these safeguards are upheld, an application of these measures should be based on a case-by-case assessment by the Member State's competent authorities. [Am. 23]

Removed:Recital 49 a (new): (49a) In accordance with the right to good administration and the principles of efficiency and effectiveness of the public administrations, the transposition of this Directive should foster the simplification of administrative rules and the reduction of administrative costs and burdens. Member States should therefore ensure that the administrative procedures and obligations of ECBAs can be submitted online and that such procedures are easily accessible. Member States should make all the necessary information available and provide support for the administrative processes related to ECBAs.

Added:(25) In order to remove legal and administrative barriers for non-profit associations operating in more than one Member State and ensure the functioning of the internal market, all Member States should automatically recognise an ECBA’s legal personality and legal capacity. This legal personality and the legal capacity should be granted upon the ECBA’s registration in a Member State.

Removed:Recital 49 b (new): (49b) In view of monitoring the implementation of this directive, the Commission should be assisted by the ECBA committee composed of representatives of the Member States. In line with the Union principles and article 2 TEU in particular, the composition of the committee should be balanced. The Committee should involve, as appropriate, other relevant Union bodies and committees and stakeholders in its work, such as the European Union Agency for Fundamental Rights and non-profit organisations. Public access to information on committee proceedings should be ensured in accordance with Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents.

Added:(26) ECBAs should be able to decide freely on their rules of operation. Any limitation on this freedom imposed by a Member State should be applied in a general and non-discriminatory way, prescribed by law, justified by an overriding reason in the public interest, and be appropriate for ensuring the attainment ofand limited to what is strictly necessary, and the impact of the measure on the ECBA should proportionate to the objective pursued and not going beyond what is necessary for it to be attained. [Am. 24]

Removed:Recital 49 c (new): (49c) This Directive takes an important step in completing the single market and opening it up further to the non-profit sector. In light of this, the Commission is invited to assess in addition to this Directive the possible benefits and the feasibility of complementing this Directive by measures to support a regular, meaningful and structured dialogue with civil society and representative organisations, of a similar European regulatory framework with regards to foundations.

Added:(27) Articles 52, 62 and 65 TFEU and relevant case law also apply to ECBAs. These TFEU Articles provide for the justification of measures restricting the freedom of establishment, freedom to provide services and free movement of capital on grounds including public policy, public security and public health. Furthermore, the concept of ‘overriding reasons in the public interest’ to which reference is made in certain provisions of this Directive has been developed by the Court of Justice in its case law. Measures by Member States that are liable to hinder or make less attractive the exercise of those Treaty freedoms should be permitted only where they can be justified by objectives listed in the Treaty or by overriding reasons in the public interest recognised by Union law. While no exhaustive definition exists, the Court of Justice has recognised that justifications are possible on various grounds such as public policy, public security and public health, the maintenance of order in society, social policy objectives, the protection of the recipients of services, consumer protection, the protection of workers, or the protection of creditors, provided that the other conditions are met. Such measures need, in any event, to be prescribed by law, appropriate for ensuring the attainment ofand limited to what is strictly necessary, and the impact of the measure on the ECBA needs to be proportionate to the objective in question and not go beyond what is necessary to attain that objectivepursued. This is particularly relevant as many associations are active in the public interest areas mentioned in this recital. [Am. 25]

Removed:Article 2 – paragraph 1 – point c: (c) “non-profit purpose” means that, regardless of whether the association’s activities are of an economic nature or not, any profits generated are used only in pursuit of the objectives of the ECBA as defined in its statutes and not to be distributed among its members, including members of its governing bodies, nor among founders or other private parties, in a direct or indirect manner;

Added:(28) In order to ensure a common and appropriate approach to governance across the Union, ECBAs should comprise a decision-making body meaning the body which gathers all members, which is in some Member States traditionally referred to as the general meeting or general assembly. ECBAs should also comprise an executive body, which is in some Member States traditionally referred to as an executive committee or board of directors; the executive body should be in charge of the administration, management and conduct of the ECBA. It should also ensure compliance with the statutes of an ECBA and legal obligations, as well as represent an ECBA in dealings with third parties and in legal proceedings. The executive body of an ECBA should be composed of a minimum of three persons, be it natural persons or legal entities through their representatives.

Removed:Article 2 – paragraph 1 – point d: (d) “non-profit association” means a legal entity under national law that is membership-based, self-governed, has a non-profit purpose, and has legal personality;

Added:(29) In order to ensure that ECBAs are able to effectively perform their activities and ensure equal treatment vis-à-vis non-profit associations in national law, ECBAs should not be treated less favourably than the most similar non-profit association of the single most similar or most commonly used legal form in the domestic legal order of the home Member State where it operates. [Am. 26]

Removed:Article 2 – paragraph 1 – point e: (e) “ECBA certificate” means a certificate issued by the competent authority of the home Member State, serving as evidence of the registration, legal personality and legal capacity of an ECBA.

Added:(30) In accordance with the principle ofprinciples of equality and non-discrimination and to ensure the freedom of association, in the implementation and application of this Directive there should be no discrimination against any group or individual on any grounds, such as birth, age, colour, sex and gender, sexual orientation, gender identity, health conditions, immigration or residency status, genetic features, language, national, ethnic or social origin, political or any other opinion, membership of a national minority, physical or mental disability, property, race, religion or belief, or other status. [Am. 27]

Removed:Article 2 – paragraph 1 – point e a (new): (ea) ‘particularly serious criminal offence’ means one of the offences listed in Article 2(2) of Council Framework Decision 2002/584/JHA, to be strictly interpreted by Member States and applied in a non-discriminatory way.

Added:(31) To facilitate the cooperation among Member States and between Member States and the Commission, Member States should designate a competent authority responsible for the application of the rule transposing this Directive (‘competent authority’) and inform the Commission and the ECBA committee thereof. The competent authorities should keep in close contact with the Commission and the ECBA committee. The Commission should publish the list of competent authorities on a public website and update it without undue delay when changes occur. To have a comprehensive overview of the legal treatment of ECBAs in Member States, Member States should notify the Commission of the names and tasks of relevant authorities, other than the competent authorities, established or designated for the purposes of the national rules applicable to the single most similar or most commonly used legal form of non-profit association in national law, if applicable. [Am. 28]

Removed:Article 3 – paragraph 1 – point a: (a) trade unions and political parties;

Added:(32) In accordance with the right to an effective remedy and to a fair trial as laid down in Article 47 CFR and Article 13 ECHR, decisions made by competent authorities in applying national provisions implementing this Directive should be subject to judicial review. Such judicial review should be available to ECBAs, as well as any other natural persons or legal persons, in respect of decisions made by competent authorities regarding ECBAs, including in cases of failure to act. The right to judicial review includes the right to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law according to the national law of the relevant Member State in compliance with Article 47 Charter of Fundamental Rights of the Union.

Removed:Article 3 – paragraph 2: 2. Member States shall ensure that an ECBA shall have a non-profit purpose in accordance with Article 2(1), point (c).

Added:(33) In view of their non-profit purpose, ECBAs should be able to apply for funding from a public or private source in the Member State(s) in which they operate on a non-discriminatory basis. Therefore, the same rules should apply to the ECBA as those applicable to the single most similar or most commonly used legal form. There should be no restriction on the ECBA’s right to receive and provide funding, except where a restriction is prescribed by law, justified by an overriding reason in the public interest, is appropriate for ensuring the attainment or where the Member State can prove that the ECBA flagrantly and repeatedly breaches the values of the objective pursued and does not go beyond what is necessary for it to be attained andUnion enshrined in Article 2 TEU through its activities, where it is compliant with Union law, appropriate and limited to what is strictly necessary, and where the impact of the restriction on the ECBA is proportionate to the objective pursued. [Am. 29]

Removed:Article 3 – paragraph 3: 3. Member States shall ensure that an ECBA shall carry out or have in its statute the objective to carry out activities in at least two Member States and have founding members with links to at least two Member States, either:

Added:(34) To ensure that ECBAs fully benefit from the internal market, ECBAs should be able to provide and receive services, as well as to engage in trade in goods without interference from Member States. Restrictions should be permitted only if they are prescribed by law, justified by overriding reasons in the public interest, and are appropriate for ensuring the attainment of the objective pursued and do not go beyond what is necessary in order for it to be attained. This should not affect provisions of other Union acts. This should include the provisions of Union acts that reinforce the fundamental freedoms, such as those laid down in Directive 2006/123/EC of the European Parliament and of the Council which guarantee the freedom of establishment and the freedom to provide services as well as the provisions of other Union acts which regulate specific economic activities ECBAs engage in.

Removed:Article 3 – paragraph 3 – point a (new): (a) based on citizenship or legal residence in the case of natural persons; or

Added:(35) In order to establish a genuine internal market for non-profit associations, it is necessary to abolish certain restrictions on the freedom of establishment, the free movement of services and the free movement of capital that still apply in the laws of certain Member States. Therefore, Member States should not impose any discriminatory requirements based on the nationality of members of an ECBA or its executive body, except as provided for by this Directive. Nor should Member States provide for any requirement on physical presence of members for the validity of a meeting. To enable ECBAs to enjoy the full benefits of the internal market, Member States should not require the registered office of an ECBA to be in the same Member State as its central administration or the principal place of operations. Member States should also not impose general prohibitions on ECBAs carrying out economic activities, nor only allow them to engage in economic activities if they are linked to an objective set out in an ECBA’s statutes.

Removed:Article 3 – paragraph 3 – point b (new): (b) based on the location of their registered office in the case of legal entities.

Added:(35a) In line with the right to freedom of expression and freedom of association, it is important to ensure that Member States do not limit the right to participation of associations in public life and public or political debate, which could concern for example the organisation of or participation in public interest advocacy or peaceful assembly. Such participation in the public or political debate should however not be meant to benefit any single particular political party or political candidate. [Am. 30]

Removed:Article 4 – paragraph 2: 2. For further matters that concern the establishment or operation of ECBAs, each Member State shall ensure that the national rules applicable to the most similar or most commonly used legal form of non-profit association in national law apply to ECBAs.

Added:(36) The registration of an ECBA should be constitutive of the ECBA. In order to register, an ECBA should have a minimum of three founding members. Both legal entities with a non-profit purpose established in the Union and natural persons who are Union citizens or legally residing in the territory of the Union should be able to be founding members of an ECBA. It should also be possible for non-profit associations to convert into an ECBA within the same Member State.

Removed:Article 4 – paragraph 3: 3. The rules applicable to ECBAs under this Directive shall not affect the measures adopted by Member States on grounds of public policy and public security to prevent the risk of misuse of non-profit associations and to ensure transparency of certain capital movements when required by Union law or national law in compliance with Union law, where such measures are prescribed by law, are appropriate for the attainment of the objective pursued, do not go beyond what is strictly necessary and the impact of the measure on the ECBA is proportionate to the objective pursued. The application of these measures shall be based on a case-by-case assessment by the Member State's competent authorities.

Added:(36a) The possibilities offered by the digitalization should be fully exploited by Member States in order to facilitate the exercise of the freedom of association and establishment as well as in order to reduce the administrative burdens and compliance costs. To facilitate the registration process, including in the case of mergers and conversions, Member States should ensure that the application for registration may be submitted online. That should also apply to the requests for transfer of the registered office and notification for a change of information part of the ECBA certificate. Digital means should be encouraged also to facilitate and speed up, where possible, administrative procedures and cooperation. [Am. 31]

Removed:Article 4 – paragraph 4: 4. By ... [one year after the entry into force of this Directive] and following consultation of stakeholders, including non-profit associations, each Member State shall identify the single most similar or most commonly used legal form of non-profit association in its domestic legal order as referred to in paragraph 2 and notify the Commission and the ECBA Committee referred to in Article 30, thereof and of the national rules that apply to that legal form. Member States shall notify the Commission and ECBA Committee without delay of any changes regarding the legal forms identified and of any changes to the rules applicable to them. Member States and the Commission shall make the notified information referred to in this paragraph publicly available.

Added:(37) To ensure that ECBAs are able to operate across borders and in compliance with the principle of proportionality, they should be required to register only once, in the home Member State, in order to acquire their legal personality and legal capacity. To ensure automatic recognition of this registration throughout the Union, it is necessary to harmonise the registration procedure. This concerns in particular the documents and information required for an application to register an ECBA, as well as the checks to be carried out.

Removed:Article 4 – paragraph 4 a (new): 4a. The constitution of an ECBA, including through conversions or mergers, as well as the transfer of an office shall not be used to undermine workers’ or trade union rights, representation, consultation or working conditions nor creditors rights, in accordance with applicable Union and national law as well as collective agreements.

Added:(38) Member States should be entitled to require a registered ECBA to make a declaration, provide information, request or obtain authorisations for engaging in particular activities only where such requirements are (i) applied in a general and non-discriminatory way, (ii) prescribed by law, (iii) justified by overriding reasons in the public interest, (iv) appropriate for ensuring the attainment ofand limited to what is strictly necessary, and the impact of the measure on the ECBA should proportionate to the objective pursued and do not go beyond what is necessary in order for it to be attained. Such requirements may be connected, for example, to the specificities of certain sectors, like healthcare. Where Member States provide for such additional procedures, this information should be made publicly available in a clear, easily accessible and comprehensible way, in order to ensure that an ECBA is able to comply with these requirements. [Am. 32]

Removed:Article 5 – paragraph 1: 1. Member States shall ensure that an ECBA acquires legal personality and legal capacity upon registration in accordance with Article 19. Member States shall recognise the legal personality and legal capacity of ECBAs registered in another Member State, without any further procedures or assessment or requiring any further registration.

Added:(39) To prevent fraud and to ensure the reliability of the relevant register, it is important that Member States verify the identity of the founding members and the legal representatives of the ECBA. The verification of identity is particularly important, especially if the application for registration is conducted electronically. Due to the variety of different practices in Member States, the specific methods of verifying identity should remain in the prerogative of the Member State concerned. This approach provides the necessary flexibility to take account of the specific traditions, specificities and procedures of each Member State, while ensuring that security and authenticity standards are respected at Union level. [Am. 33]

Removed:Article 5 – paragraph 2: 2. Member States shall ensure that an ECBA has the right to at least conclude contracts and perform legal acts, be a party to legal proceedings, own movable and immovable property, carry out economic activities, employ staff, receive, solicit and dispose of donations and other funds in line with Article 13, participate in public tenders, and apply for public funding. The ECBA shall be allowed to do so in accordance with this Directive and without the need to register in any Member State other than the home Member State or to fulfil additional administrative requirements other than those required of the legal form identified in accordance with Article 4(4).

Added:(40) While respecting the freedom of establishment and association, the registration of an ECBA should be denied in cases of failure to comply with the formal requirements for the registration, as laid down in this Directive, where the application is not complete or if the objectives described in the statutes contravene Union law or national law compliant with Union law. Furthermore, the registration must be rejected, if the application fails to comply with the basic requirements set out in this Directive to constitute an ECBA, namely the non-profit purpose, the minimum number of founding members and the cross-border element in terms of carrying out or having the objective of carrying out activities in at least two Member States and founding members with links with at least two Member States. Any refusal to register an ECBA should be made in writing and duly reasoned by the competent authority. [Am. 34]

Removed:Article 6 – paragraph 1 – point b: (b) justified by overriding reasons in the public interest; and

Added:(41) Member States should be required to establish a register or make use of an existing national register for the purposes of the registration and for maintaining and publishing information on ECBAs. This register should contain information about ECBAs and the submitted documents. As the information kept in the register may become outdated, Member States should ensure that the ECBA notifies any changes concerning the information on ECBAs to the competent authority and that the information held in the register is updated. Member States should be allowed to make use of their existing national registers for the purpose of this Directive. In order to ensure transparency especially for members of an ECBA and its creditors, if applicable, the ECBA certificate, the liquidation and the dissolution of an ECBA are pieces of information that should be made publicly available for a maximum of 6 months afteruntil the end of the financial year following the dissolution of an ECBA. The interoperability solutions developed as part of the implementation of the Proposal for a Regulation of the European Parliament and of the Council laying down measures for a high level of public sector interoperability across the Union can further support Member States to move towards cross-border interoperability of their registers. To ensure that information about the existence of an ECBA is still available even after its dissolution, all data retained and stored in the register should be kept for 2at least 5 years after dissolution Any national or European requirements concerning the authenticity, reliability and the appropriate legal form of documents or information that are to be submitted in case of online registration of the single most similar or most commonly used legal form, should also apply to the ECBA. [Am. 35]

Removed:Article 6 – paragraph 1 – point c: (c) appropriate for the attainment of the objective pursued, do not go beyond what is strictly necessary and the impact of the restricting rules on an ECBA is proportionate to the objective pursued.

Added:(42) Regulations (EU) 2016/679 and (EU) 2018/1725 of the European Parliament and of the Council apply to the processing of personal data carried out in the context of this Directive, including the processing of personal data to maintain the national register or registers on ECBAs and their legal representatives, to access personal data in such registers and to exchange personal data in the context of administrative cooperation and mutual assistance between Member States under this Directive, where applicable via the Internal Market Information System (IMI) established by Regulation (EU) No 1024/2012 of the European Parliament and of the Council, and the keeping of records in accordance with this Directive..

Removed:Article 6 – paragraph 2 – introductory part: 2. Member States shall ensure that the statutes of an ECBA are provided in writing, submitted in compliance with formal requirements applicable to the legal entity identified in accordance with Article 4(4), and include the following information:

Added:(43) In order to enable ECBAs to reap the full benefits of the internal market and given that mobility rights are directly related and necessary to the functioning of the internal market, ECBAs should be able to transfer their registered office from one Member State to another. Such a transfer of registered office should not result in the dissolution of an ECBA in the home Member State or the creation of a new legal entity in the new home Member State, or affect any of the assets or liabilities, including any terms contained in contracts, or credits, rights or obligations of an ECBA existing before the transfer. In the case of mobility, Member States should ensure the protection of the interests of the ECBA’s creditors if any. To ensure protection of employees of ECBAs, ECBAs should be required to inform them of any proposed transfer in good time and allow them to examine the draft terms of such transfer. Other provisions of Union and national law concerning the protection of employees, such as Directive 2002/14/EC of the European Parliament and of the Council, may also be applicable.

Removed:Article 6 – paragraph 2 – point b: (b) a detailed description of its objectives, a statement of its non-profit purpose and a description of its cross-border dimension;

Added:(44) To harmonise the procedure of transfer of registered office of an ECBA, Member States should ensure that a transfer of registered office is decided by the decision-making body of the ECBA concerned. The ECBA should submit the request with the relevant documents to the competent authority of the Member State to which the transfer is to be made and inform in parallel the competent authority of its home Member State when submitting the request for transfer. One of the relevant documents in the event of a transfer would be a report explaining the safeguards for creditors and employees, if applicable under Union or national law. Member States should ensure that the preparation of such a report does not impose an excessive administrative burden. Where applicable, the proposed statutes of the ECBA should be amended according to the requirements of the national law of the Member State to which the ECBA requests the transfer. Upon transfer of the registered office, the ECBA becomes an ECBA under the national law of the new home Member State. This change of applicable law ensuing from the transfer of the registered office should not lead, in order to avoid duplications, the competent authority of the new home Member State to verify any element already verified during the registration in the previous Member State and harmonised by this Directive. The competent authority of the Member State to which the ECBA intends to transfer the registered office should reject the request of transfer only where the requirements laid down in national law transposing this Directive are not met and should not refuse it on other grounds. In particular, the competent authority should not reject the request on the ground of non-compliance with requirements under its national law that could not have been a ground to reject the registration in accordance with Article 19. In order to facilitate the transfer of registered office of an ECBA in the internal market, the competent authority of the new home Member State should issue an updated certificate in accordance with paragraph 2 of Article 21, adapting the unique registration number and the two-letter country code of the Member State where the ECBA’s office is transferred and the postal address of the registered office, as well as any other elements, if applicable.. [Am. 36]

Removed:Article 6 – paragraph 2 – point b a (new): (ba) a declaration that the ECBA will respect the values of the Union enshrined in Article 2 TEU in its objectives and in the pursuit of its activities.

Added:(45) In compliance with the freedom of assembly and of association, an ECBA should be dissolved only by decision of its members or by a decision of the competent authority of the home Member State. Where the dissolution of an ECBA is the result of a decision of its members, it should be taken by two-thirds of the votes representing at least half of the total of the members during an extraordinary meeting. The dissolution of an ECBA may be involuntary by decision of the competent authority of the home Member State of the ECBA, as a last resort, only. Therefore involuntary dissolution should only happen where an ECBA does not respect its non-profit purpose, or where its activities constitute a threat to public order, or where the membersa flagrant and repeated breach of the executive body of an ECBA have been convicted of a particularly serious criminal offence or the ECBA itselfvalues of the Union enshrined in Article 2 TEU through its activities has been convicted of a criminal offence, if national law allows for this possibilityestablished under the condition that the dissolution is preceded by a risk assessment, that it is prescribed by law, appropriate and strictly necessary, and that the dissolution of the ECBA is proportionate to the objective pursued. In this case, the competent authority should communicate to the ECBA a formal comprehensively reasoned notice of its concerns and hear the ECBA in order to give the ECBA the opportunity to reply or rectify the situation within a reasonable period of time. Any decision for involuntary dissolution should be duly reasoned and include a comprehensive written justification. [Am. 37]

Removed:Article 6 – paragraph 2 – point d: (d) where a founding member is a legal entity, a detailed description or copy of its statutes and a detailed description of its non-profit purpose;

Added:(46) The dissolution of the ECBA should lead to its liquidation. The liquidation of ECBAs should be compliant with Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (EIR 2105) which requires that the law applicable to insolvency proceedings and their effects shallshould be that of the Member State within the territory of which such proceedings are opened. In line with the non-profit purpose of ECBAs, any assets of a dissolved ECBA should be transferred to a non-profit entity carrying out a similaran activity as the onesimilar to one of the activities carried out by the dissolved ECBA or, transferred to a local authority which should utilise them for an activity like that pursued byor for the pursuit of an objective that is similar to one of the activities or objectives of the dissolved ECBA. [Am. 38]

Removed:Article 6 – paragraph 2 – point j: (j) provisions governing the number, appointment, removal, powers and responsibilities of the members of the executive body;

Added:(47) To enable an ECBA to prove that it has registered within a Member State and to further facilitate cross-border procedures and simplify and reduce formalities, the competent authorities should, as the final step of the registration process, issue a certificate (’ECBA certificate’) which contains the essential registration information, including the name of an ECBAthe association followed or preceded by the acronym 'ECBA', the address of its registered office, and the names of the legal representatives. To facilitate the use of this certificate in various Member States without additional adaptations or compliance costs, the Commission should establish a standardised template available in all languages of the Union. Therefore, in order to ensure uniform conditions for the implementation of this act, implementing powers should be conferred on the Commission to produce a standardised template including in relation to the technical specifications of the template. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council. Those implementing acts should be adopted in accordance with the examination procedure referred to in Article 5 of Regulation (EU) No 182/2011 of the European Parliament and of the Council. [Am. 39]

Removed:Article 6 – paragraph 2 – point n: (n) the method of disposition of the ECBA’s assets in the event of dissolution; and

Added:(48) The notion of ‘particularly serious crime’ should be defined by Member States and may include terrorism, trafficking in human beings and sexual exploitation of women and children, illicit drug trafficking, illicit arms trafficking, money laundering, corruption, counterfeiting of means of payment, computer crime and organised crime. [Am. 40]

Removed:Article 6 – paragraph 2 – point n a (new): (na) the date of adoption of the statutes.

Added:(49) In order to allow Member States to efficiently implement legal provisions of this Directive on administrative cooperation and facilitate cooperation, Member States should use the Internal Market Information System (IMI). In particular, the competent authorities should use IMI to notify the competent authorities of the other Member States when a new ECBA is constituted, including when a non-profit association converts into an ECBA. Where a competent authority receives an application for registration, it should communicate through IMI with the competent authorities of the Member State(s) in which these documents have been issued to verify, for instance, their lawfulness. In the case of a transfer of the registered office of an ECBA, the competent authority of the new home Member State should notify the competent authorities of the other Member States of this transfer and update IMI with the relevant information. In the case of a dissolution, both voluntary or involuntary, the competent authority should also notify the competent authorities of the other Member States to inform them about the dissolution and to update IMI with the relevant information.

Removed:Article 7 – paragraph 2: 2. The executive body of an ECBA shall be composed of a minimum of three persons, of which at least two persons are natural persons that are Union citizens or legally resident in the Union, or legal entities with a non-profit purpose established in the Union, through their representatives.

Added:(49a) In accordance with the right to good administration and the principles of efficiency and effectiveness of the public administrations, the transposition of this Directive should foster the simplification of administrative rules and the reduction of administrative costs and burdens. Member States should therefore ensure that the administrative procedures and obligations of ECBAs can be submitted online and that such procedures are easily accessible. Member States should make all the necessary information available and provide support for the administrative processes related to ECBAs. [Am. 41]

Removed:Article 7 – paragraph 3: 3. Member States shall ensure that natural persons who have been convicted of a particularly serious criminal offence are not to be members of the executive body or representatives of a legal entity that is a member of the executive body, in case participation in the executive body by this person would constitute a threat to the public order.

Added:(49b) In view of monitoring the implementation of this directive, the Commission should be assisted by the ECBA committee composed of representatives of the Member States. In line with the Union principles and article 2 TEU in particular, the composition of the committee should be balanced. The Committee should involve, as appropriate, other relevant Union bodies and committees and stakeholders in its work, such as the European Union Agency for Fundamental Rights and non-profit organisations. Public access to information on committee proceedings should be ensured in accordance with Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents. [Am. 42]

Removed:Article 8 – paragraph -1 (new): -1. Notwithstanding the criteria for the constitution of an ECBA laid down in Article 3(1), the membership criteria of an ECBA shall be regulated by its statutes.

Added:(49c) This Directive takes an important step in completing the single market and opening it up further to the non-profit sector. In light of this, the Commission is invited to assess in addition to this Directive the possible benefits and the feasibility of complementing this Directive by measures to support a regular, meaningful and structured dialogue with civil society and representative organisations, of a similar European regulatory framework with regards to foundations. [Am. 43]

Removed:Article 8 – paragraph 1: 1. Member States shall ensure that each member of an ECBA has one vote, unless the ECBA decides to allow a differentiation including by making a distinction between full members who can vote and associate members who cannot vote. In all cases, any differentiation in voting rights shall be set out in the statutes.

Added:(50) Since the objectives of this Directive, namely improving the functioning of the internal market by removing legal and administrative barriers for non-profit associations operating in more than one Member State, cannot be sufficiently achieved by the Member States alone and can rather be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 TEU. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve those objectives.

Removed:Article 10 – paragraph 1: Member States shall ensure that, within the ambit of application of this Directive, ECBAs are not discriminated nor that national laws, regulations or administrative acts regulating ECBAs discriminate against any group or individual on any grounds, such as birth, age, colour, sex and gender, sexual orientation, gender identity, health conditions, immigration or residency status, genetic features, language, national, ethnic or social origin, political or any other opinion, physical or mental disability, membership of a national minority, property, race, religion or belief, or other status.

Added:(51) The European Data Protection Supervisor was consulted in accordance with Article 42(1) of Regulation (EU) 2018/1725 and delivered an opinion on 27 June 2023,

Removed:Article 11 – paragraph 1: Member States shall ensure access to effective complaint mechanisms in accordance with national law and shall ensure that all decisions of competent authorities on their territory affecting the rights and obligations of ECBAs, or the rights and obligations of other persons in connection to the operations of ECBAs, are subject to effective remedies, in compliance with Article 47 of the Charter.

Added:HAVE ADOPTED THIS DIRECTIVE:

Removed:Article 12 – paragraph 2 – introductory part: 2. Without prejudice to Articles 9 to 11, Member States shall not require registered ECBAs to make a declaration, provide information, or request or obtain authorisations for engaging in particular activities, unless such requirements are:

Added:Chapter 1 General provisions

Removed:Article 12 – paragraph 2 – point b: (b) justified by overriding reasons in the public interest; and

Added:Article 1 Subject matter

Removed:Article 12 – paragraph 2 – point c: (c) appropriate for the attainment of the objective pursued, do not go beyond what is strictly necessary and the impact of the requirements on an ECBA is proportionate to the objective pursued.

Added:This Directive lays down measures coordinating the conditions for establishing and operating ‘European cross-border associations’ (ECBAs), in order to facilitate the effective exercise by non-profit associations of their rights related to the freedom of establishment, free movement of capital, freedom to provide and receive services and free movement of goods in the internal market.

Removed:Article 13 – paragraph 2 – introductory part: 2. Without prejudice to Articles 9 to 11, Member States shall not impose any restrictions on an ECBA’s ability to provide or receive funding, including donations, from any source, except to the extent that such restrictions are:

Added:Article 2 Definitions

Removed:Article 13 – paragraph 2 – point b: (b) justified by overriding reasons in the public interest or where the Member State can prove that the ECBA flagrantly and repeatedly breaches the values of the Union enshrined in Article 2 TEU through its activities; and

Added:For the purpose of this Directive, the following definitions apply:

Removed:Article 13 – paragraph 2 – point c: (c) appropriate for the attainment of the objective pursued, do not go beyond what is strictly necessary and the impact of the restriction on an ECBA is proportionate to the objective pursued.

Added:(a) “home Member State” means the Member State in which the ECBA establishes or transfers its registered office;

Removed:Article 14 – paragraph 2 – introductory part: 2. Without prejudice to provisions of other acts of Union law as well as Articles 9 to 11 of this Directive, Member States shall not impose any restrictions on the activities referred to in paragraph 1, unless such restrictions are:

Added:(b) “host Member State” means a Member State other than the home Member State in which the ECBA operates;

Removed:Article 14 – paragraph 2 – point b: (b) justified by overriding reasons of public interest; and

Added:(c) “non-profit purpose” means that, regardless of whether the association’s activities are of an economic nature or not, any profits generated are used only in pursuit of the objectives of the ECBA as defined in its statutes and not to be distributed among its members, including members of its governing bodies, nor among founders or other private parties, in a direct or indirect manner; [Am. 44]

Removed:Article 14 – paragraph 2 – point c: (c) appropriate for the attainment of the objective pursued, do not go beyond what is strictly necessary and the impact of the restriction on an ECBA is proportionate to the objective pursued.

Added:(d) “non-profit association” means a legal entity under national law that is membership-based, self-governed, has a non-profit purpose, and has legal personality; [Am. 45]

Removed:Article 15 – paragraph 1 – point g – introductory part: (g) the following restrictions on the exercise of economic activities, whether carried out on a regular or on an occasional basis, unless such prohibition would allow the ECBA to access a different preferential status:

Added:(e) “ECBA certificate” means a certificate issued by the competent authority of the home Member State, serving as evidence of the registration, legal personality and legal capacity of an ECBA. [Am. 46]

Removed:Article 15 – paragraph 1 – point g a (new): (ga) restrictions or additional requirements regarding the participation in matters of public debate, whether carried out on a regular or on an occasional basis.

Added:(ea) ‘particularly serious criminal offence’ means one of the offences listed in Article 2(2) of Council Framework Decision 2002/584/JHA, to be strictly interpreted by Member States and applied in a non-discriminatory way. [Am. 47]

Removed:Article 16 – paragraph 3: 3. Member States shall ensure that the formation of an ECBA 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 the applicable national law requires so for the legal entity identified in accordance with Article 4(4).

Added:Article 3 European Cross-Border Association (ECBA)

Removed:Article 17 – title: Conversion of non-profit entities into an ECBA

Added:1. Each Member State shall establish in its legal system the legal form of the European cross-border association (ECBA). Member States shall ensure that an ECBA is a membership-based legal entity, constituted by means of voluntary agreement by natural persons that are Union citizens or legally resident in the EU or legal entities with a non-profit purpose legally established in the Union, with the exception of:

Removed:Article 17 – paragraph 1: 1. Member States shall ensure that existing non-profit entities that are legally established in a Member State and which fulfil the requirements set out in this Directive, can convert into an ECBA within the same Member State.

Added:(a) trade unions, and political parties, religious organisations and associations of such entities; [Am. 48]

Removed:Article 17 – paragraph 3: 3. Member States shall ensure the conversion shall not result in the dissolution of the non-profit association that is converting or in any loss or interruption of its legal personality.

Added:(b) persons who have been convicted of offences of money laundering, associated predicate offences, or terrorist financing;

Removed:Article 17 a (new): Article 17a / Merger of existing non-profit entities into an ECBAs / 1. Member States shall ensure that two or more existing non-profit entities that are legally established in on or more Member States, can merge into an ECBA where: / (a) one or more non-profit entity, on being dissolved without going into liquidation, transfers all its assets and liabilities to another existing ECBA, being the acquiring ECBA; or / (b) one or more non-profit entity, on being dissolved without going into liquidation, transfers all its or their assets and liabilities to an ECBA that it or they form, being the newly established ECBA. / 2. Member States shall ensure that any merger is approved by the decision-making bodies of the merging non-profit entities. / 3. Member States shall ensure that mergers do not result in the dissolution or any loss or interruption of the legal personality of the acquiring ECBA and that legal continuity is unaffected in the event of a merger that results in a newly established ECBA. / 4. Member States shall ensure that all assets and liabilities are transferred to the acquiring or newly constituted ECBA, as applicable. / 5. Member States shall ensure that the merger shall take effect, as applicable, upon registration of the newly established ECBA in accordance with Article 19 or from the date from which the transactions of the acquired ECBAs are to be treated for accounting purposes as being those of the acquiring ECBA. / 6. Member States shall ensure that the entry…

Added:(c) persons who are subject to measures that prohibit their activity in a Member State in connection with money laundering, associated predicate offences, or terrorist financing.

Removed:Article 18 – paragraph 3: 3. By way of derogation from the second subparagraph of paragraph 1, Member States may adopt rules allowing the competent authority to request documents or information additional to those referred to in paragraph 1 by written decision addressed to the person authorised to represent the ECBA referred to in Article 18(1), point (d), setting out a duly substantiated concern that the objectives described in the statutes of the ECBA would contravene Union law, including the values of the Union as enshrined in Article 2 TEU, or provisions of national law compliant with Union law, where those documents or information are necessary.

Added:(b) based on the location of their registered office in the case of legal entities. [Am. 52]