Confusion Over Non-Profit Status in EU Services Directive

In an an interview published by EurActive.com in August, Patrick de Bucquois of CEDAG, a European umbrella group for non-profit organizations, expressed concern regarding the EU Services Directive that is due to be implemented across Europe by the end of the year.  Mr. de Bucquois's concerns focus on the failure of the Directive to clearly define who is a non-profit service provider; and to allow cross-border providers of services to have the provision of such services governed by the laws of their home country.

 

With respect to the definition of a non-profit service provider, the original goal was to pass a European Statute of Non-Profits.  A lack of consensus, however, produced, instead, the European Statute for Co-operatives which was not quite on point.  As a result, there is no clear recognition at the European level of what it means to be a non-profit service provider.   This lack of clarity gives rise to concerns about implementation.  European countries are not implementing the statute uniformly across, or even within, countries. 

 

Mr. de Bucquois’s other major concern is the removal of the “country of origin” principle from the Directive.  A service provider from one country is free to provide services in other countries.  The inclusion of the "country of origin" provision in the Directive, however, was designed to allow a service provider providing cross-border services to be governed by the laws of its home country for a limited period.  For instance, a French service provider providing services in the UK would generally be governed by French law.  The removal of this principle undercuts one of the initial purposes of the Directive which was to create a unified service provider system for Europe.

 

SS