SOME ISSUES CONCERNING UNIFICATION AND HARMONIZATION OF EUROPEAN FOUNDATION LAW

Abstract

The European Union needs unified legislation regulating private juridical relations in the fields of property rights, contracts, torts and status of legal entities (companies and non-profitable organizations) etc. all over Europe.  However it is still complicated to harmonize and unify law of inheritance and family law, as these spheres are not connected with the internal market and Member States have their particular traditions in this field. As we know, according to the Article 95 of the EC Treaty, the approximation of the provisions laid down by law should have as their object the establishment and functioning of internal market.

European Civil Code lacks in sound foundation and sufficient grounds. Therefore the codification appears to be premature whereas the unification of single institutes of private law seems to be reasonable and timely. In particular, must be unified the institute of foundations and rules governing their activities.

The European foundation sector is a major economic force and makes significant contributions to the public good of Europe. If we refer to the foundation law of EU countries, as long as there are no suitable directives or decisions aimed at harmonizing of standards concerning the foundations (a project of European Foundation Statute has not been adopted yet), there are less relevant discrepancies. European Foundation Statute would provide further benefits to the foundation sector. It would help to clarify terms and the concept of foundations as organizations with their own resources and independent governance. It would also help to develop a common definition of “public benefit purpose” foundations, as currently the term “foundation” is much too loosely used. But now within the EU each Member State has a slightly different understanding of what foundations are.

There are legal barriers to cross-border activities of foundations of the Member States both in civil law and in tax law. As in company law, most of the barriers can be overcome, but this leads to compliance costs which will often be higher than they would be in company law, given that the legal and personal environments vary (foundation and tax laws of the Member States seem to have more legal uncertainties inter alia because of much less case law and fewer specialized lawyers, and because board members of foundations may be less experienced in legal issues).

A European Foundation Statute will become a law, which would do much to overcome the barriers which impede foundations’ cross-border activities. The Statute would have the effect of unleashing foundations’ potential economic impact on public-good activities.

DOI: http://dx.doi.org/10.5755/j01.eis.0.5.1082