Changes from report parliamentary committee draft to plenary report

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

▸7 unchanged paragraphs

on the proposal for a directive of the European Parliament and of the Council on European cross-border associations

(COM(2023)0516 – C90326/2023 – 2023/0315(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

– having regard to the Commission proposal to Parliament and the Council (COM(2023)0516),

– having regard to Article 294(2) and Articles 50 and 114 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C90326/2023),

– having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

Changed– having regard to the opinion of the European Economic and Social Committee of ...,17 January 2024,

– having regard to Rule 59 of its Rules of Procedure,

– having regard to the letter from the Committee on the Internal Market and Consumer Protection,

Changed– having regard to the report of the Committee on Legal Affairs (A90000/2023),(A9-0062/2024),

1. Adopts its position at first reading hereinafter set out;

Change 1

Removed2. Suggests that the act be cited as 'the Sergey Lagodinsky-... Directive on European cross-border associations';

2. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

3. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Change 2

RemovedRecital 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 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 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. 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 TFEU together with Articles 7, 8 and 12 of the Charter of Fundamental Rights of the European Union enshrine the freedom of association at all levels and protect non-profit organisations against discriminatory, unnecessary and unjustified restrictions regarding the financing of their activities. 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*. / * Judgement of the Court of Justice of 10 June 2020, C…

AddedRecital 2: (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.

RemovedRecital 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.

AddedRecital 6: (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.

RemovedRecital 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 Council39 .

AddedRecital 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.

RemovedRecital 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, should also not be allowed to establish an ECBA, due to the lack of Union competence to regulate their status, and due to them having a particular status in national law. This however should not exclude such entities from becoming a non-founding member of an ECBA. It should also not preclude organisations whose values and aims are informed by a religious, philosophical or non-confessional belief, such as faith-based, charitable non-profit organisations, from establishing an ECBA under this Directive.

AddedRecital 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.

RemovedRecital 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 among members, 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. 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 same purpose.

AddedRecital 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…

RemovedRecital 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. This does not exclude the possibility for persons with no links to a Member State to establish an ECBA together with at least two persons who have links to at least two Member States.

AddedRecital 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.

RemovedRecital 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. The aspects of ECBAs’ activities that are not harmonised by this Directive should be governed by the national rules that apply to the 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, have a non-profit purpose, and have legal personality. To ensure transparency and legal certainty, Member States should notify the Commission and the ECBA committee of the legal form of non-profit association that is most similar or most commonly used in national law and of the rules applicable to such legal form.

AddedRecital 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.

AddedRecital 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.

AddedRecital 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.

AddedRecital 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.

AddedRecital 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.

AddedRecital 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.

AddedRecital 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.

AddedRecital 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.

AddedRecital 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 .

AddedRecital 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.

AddedRecital 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.

AddedRecital 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.

AddedRecital 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.

AddedRecital 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.

AddedRecital 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…

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.

Change 3

ChangedRecital 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, asin partthe context of the fight against terrorism financing,financing and money laundering, when required by Union law, or national law in compliance with Union law.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.

Change 4

ChangedRecital 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 appropriateforappropriate ensuringand thelimited attainmentto ofwhat theis objectivestrictly pursuednecessary, and not going beyond what isthe necessaryimpact forof itthe tomeasure beon attained,the andECBA should be interpreted strictlyproportionate byto thatthe Memberobjective State.pursued.

Change 5

ChangedRecital 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 duly justified, to be appropriatefor ensuring the attainmentprescribed ofby thelaw, objectiveappropriate inand question,limited to bewhat interpretedis strictly bynecessary, theand Memberthe Stateimpact implementingof them,the andmeasure toon notthe goECBA beyondneeds whatto isbe necessaryproportionate to attainthe theirobjective objective.pursued. This is particularly relevant as many associations are active in the …public interest areas m…

Change 6

ChangedRecital 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. / (This amendment applies throughout the text. Adopting it will necessitate corresponding changes throughout.)

Change 7

RemovedRecital 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’). The Commission should publish the list of competent authorities. 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 most similar or most commonly used legal form of non-profit association in national law, if applicable.

AddedRecital 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.

Change 8

ChangedRecital 3331: –(31) paragraphTo 1:facilitate Inthe viewcooperation ofamong theirMember non-profitStates purpose,and ECBAsbetween shouldMember beStates ableand tothe applyCommission, forMember fundingStates fromshould designate a publiccompetent orauthority privateresponsible sourcefor inthe application of the Memberrule State(s)transposing inthis whichDirective they(‘competent operateauthority’) onand ainform non-discriminatorythe basis.Commission Therefore,and the sameECBA rulescommittee thereof. The competent authorities should applykeep toin close contact with the Commission and the ECBA ascommittee. thoseThe applicableCommission toshould publish the mostlist similarof orcompetent mostauthorities commonlyon useda legalpublic form.website Thereand shouldupdate beit nowithout restrictionundue ondelay when changes occur. To have a comprehensive overview of the ECBA’slegal righttreatment toof receiveECBAs andin provideMember funding,States, exceptMember whereStates ashould restrictionnotify isthe prescribedCommission byof law,the justifiednames byand antasks overridingof reasonrelevant inauthorities, other than the publiccompetent interest,authorities, isestablished appropriateor fordesignated ensuringfor the attainmentpurposes of the objectivenational pursuedrules andapplicable doesto notthe gosingle beyondmost whatsimilar isor necessarymost forcommonly itused tolegal beform attainedof andnon-profit isassociation compliantin withnational Unionlaw, law.if applicable.

Change 9

RemovedRecital 35: (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. In line with the right to freedom of expression, Member States should not impose any restrictions or additional requirements with regard to participation in matters of public or political debate, including, inter alia, the organisation of or participation in public interest advocacy, activism, demonstrations, whether carried out on a regular basis or on occasion, as part of the objectives of the ECBA or through its activities, irrespective of whether such part…

AddedRecital 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.

RemovedRecital 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 for ensuring the attainment of the objective pursued, interpreted strictly by the Member State concerned, and do not go beyond what is necessary in order for the objective 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 order to ensure that an ECBA is able to comply with these requirements.

AddedRecital 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.

AddedRecital 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.

AddedRecital 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.

AddedRecital 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.

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.