Protocol No. 3 to the European Outline Conventionon Transfrontier Co-operation between Territorial Communities or Authorities concerning Euroregional Co-operation Groupings (ECGs)

Part I

Article 1

Euroregional co-operation groupings (ECGs)

1. Territorial communities or authorities and other bodies referred to under Article 3, paragraph 1, may set up a transfrontier co-operation body in the form of a "Euroregional co-operation grouping” (ECG) on the territory of the member States of the Council of Europe, Parties to this Protocol, under the conditions provided by it.

2. The objective of the ECG shall be to promote, support and develop, for the benefit of populations, transfrontier and interterritorial co-operation between its members in their common areas of competence and in keeping with the competences established under the national law of the States concerned.

Article 2

Legal personality, legal capacity and applicable law

1. The ECG shall be a legal person. […]

2. The ECG shall have the most extensive legal capacity accorded to legal persons under that State’s national law.

[3…]

5. The ECG may enter into contracts, hire staff, acquire movable and immovable property and bring legal proceedings.

1 (continuation). It (=the ECG) is governed by the law of the Party, Council of Europe member State, in which it has its headquarters.

4. The ECG shall have the right to its own budget and the power to implement it.

Article 3

Membership

1. Members of the ECG shall be territorial communities or authorities of a Party and may also include the respective member State concerned of the Council of Europe.

N.B. Therefore, for a State to become a member of an ECG, at least one of its territorial communities or authorities must also be a member.

All legal persons established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character may be members if:

     –     their activity is financed mainly by the State, a territorial community or authority or similar body; or

     –     their management is subject to the control of these entities; or

     –     half the members of their administrative, managerial or supervisory organ are appointed by the State, a territorial community or authority or similar body.

Individuals may not be members of an ECG.

2. Territorial communities or authorities of a State non-Party to this Protocol, which shares a border with a Party which is or will become the State in which the ECG has its headquarters, may take part in the establishment of, or join, this ECG if an agreement between these two States so allows, without prejudice to the provisions of this Protocol.

3. Territorial communities or authorities of the Parties shall have the majority of voting rights in the ECG.

Article 16

Scope of Application

1   Each State shall, in a declaration deposited with the Secretary General of the Council of Europe at the time of ratification, acceptance, approval or accession, designate the categories of territorial communities or authorities and legal persons mentioned under Article 3, paragraph 1, which it excludes from the scope of this Protocol.

2     For the purpose of applying this Protocol, autonomous public communities or authorities vested with their own legislative power under the national law of the Party in whose jurisdiction they are situated shall be considered as "territorial communities or authorities", without prejudice to the provisions of paragraph 1.

3     Any declaration made under paragraph 1 may be altered by a notification addressed to the Secretary General. Such notification shall become effective on the day of its receipt.

Article 4

Establishment of the ECG (partim)

1. The ECG shall be established by a written agreement between its founding members.

2. […]

3. The agreement shall specify, in addition to the list of members, the name of the ECG, the address of its headquarters, the duration, object and tasks of the ECG, as well as its geographical scope. The name of an ECG whose members have limited liability shall include the word “limited.” 

4. […]

Article 2

Legal personality, legal capacity and applicable law (end)

3. The law applicable to the type of corporate entity chosen for the ECG by the members shall be stipulated in the agreement establishing the ECG, without prejudice to the provisions of this Protocol or to any other specific provision adopted by the party in accordance with Article 13.

Article 4

Establishment of the ECG (continuation)

2. The prospective members shall submit all appropriate documentation to prove that the necessary procedures or formalities required by the national law applicable to them have been respected. This documentation shall be appended to the agreement.

[…]

4. Before concluding an agreement to found an ECG or before joining an ECG, the territorial communities or authorities shall, as appropriate, inform, notify or obtain authorisation from their national authorities regarding this intention.

5. Authorisation may be refused if membership of the ECG would violate this Protocol or provisions of national law, including the powers and responsibilities of prospective members, or if membership is not justified for reasons of public interest or of public policy of the Party concerned. In such a case, the Party shall give a statement of its reasons for withholding approval.

6. Each State may, in a declaration deposited with the instrument of ratification or at any subsequent time, waive the requirement of information, notification or authorisation referred to in paragraph 4, in general, or for specific categories of territorial communities or authorities or for specific types of co-operation.

7. The agreement shall be registered or published in the State where the ECG has its headquarters, as well as in all States to which its members belong, in accordance with the national law applicable.

8. The territorial communities or authorities, members of the ECG, shall inform their national authorities that the ECG has been lawfully established.

9. The agreement shall be written in the language(s) of the State where the ECG has its headquarters and in the language(s) of the member(s), all versions being equally authentic. 

Article 5

Statutes

1   The statutes of the ECG shall be an integral part of the agreement establishing it.

2   The statutes shall be written in the language(s) of the State where the ECG has its headquarters and in the language(s) of the member(s), all versions being equally authentic. They may specify which language or language(s) is(are) to be considered the working language(s).

3   In addition to the mandatory provisions of the agreement, the statutes shall contain rules on membership, withdrawal and dissolution of the ECG, including the legal consequences, as well as on operations, organs and their tasks, staffing, budgets and financing, liability, accountability and transparency of the ECG, without prejudice to the provisions of this Protocol and in conformity with the applicable law.

Article 6

Amendments to the agreement and the statutes

Any amendment to the agreement referred to in Article 4 and any substantial amendment to the statutes referred to in Article 5 shall follow the same procedures and form of those articles respectively. Substantial amendments to the statutes shall be those entailing, directly or indirectly, an amendment to the agreement. The majority required for the adoption of any such amendment shall be determined in the statutes

Article 7

Tasks and scope of action

1     The ECG shall perform the tasks that its members entrust to it. These tasks shall be in accordance with the competences of the members under their respective national law and shall be listed in the agreement and in the statutes.

2     The ECG shall adopt decisions and ensure their implementation, in respect and for the benefit of individual persons or legal entities subject to the jurisdiction of the States to which its members belong. Members shall adopt or facilitate all necessary measures falling within their competences in order to ensure that the ECG’s decisions are implemented.

3     The tasks given to an ECG shall not concern the exercise of regulatory powers. The ECG shall not be empowered to take measures which might affect the rights and freedoms of individuals, or to impose levies of a fiscal nature.

4       The ECG may not exercise competences that territorial communities or authorities exercise as agents of the State to which they belong, except where duly authorised. It may exercise competences that States members of the ECG confer upon it. 

Article 8

Duration

1     The ECG shall be established for a limited or unlimited period of time, to be specified in the agreement and the statutes.

2     The ECG shall be wound up ipso facto when the period for which it was established has expired or if the territorial communities or authorities cease to control the majority of voting rights. It may also be wound up by a unanimous decision of its members.

Article 9

Liabilities

1    The ECG – or, if its assets are not sufficient, its members jointly − shall be liable with regard to third parties for its acts, including debts of whatever nature, even if those acts do not fall within its tasks.

2    The ECG shall be liable to its members for any breach of the law to which it may be subject.

3    The organs of the ECG shall be liable with regard to the ECG for any breach of law they have committed in the exercise of their functions.

4    If a member of the ECG has only limited liability in accordance with the national law to which it is subject, the other members may also limit their liability in the statutes.

5   A State on whose territory it is intended to set up the headquarters of an ECG may prohibit the registration or publication of notice of an ECG if one or more of its prospective members has limited liability.

Article 10

Dispute settlement

1. In the event of a dispute between the ECG and its members, the competent courts shall be those of the State in which the ECG has its headquarters.

2. In the event of a dispute between the ECG and a third party, the competent courts shall be those of the State in which the third party effectively resides or, in the case of a legal person, the State in which its seat or headquarters is located, as long as these States are member States of the Council of Europe. 

3   Notwithstanding the provisions of paragraph 2, the ECG, the territorial communities or authorities, other public or private law entities concerned and third parties may conclude an arbitration agreement. If a third party´s residence, seat or headquarters is not located in the territory of a member State of the Council of Europe, the ECG shall conclude an arbitration agreement for all activities with this party.

4. Third parties shall retain, vis-à-vis territorial communities or authorities on behalf of which the ECG performs certain tasks, all the rights they would enjoy if those tasks were not performed by the ECG. 

5. In any case the rights of individuals and legal persons shall include the right to appeal before all competent organs and courts, including the right of access to services in their own language and the right of access to information. 

Article 11

Supervision, administrative and judicial review

1     Decisions and acts of the ECG shall be subject to the same supervision and administrative and judicial review of the legality of acts of territorial communities or authorities as those required in the State in which the ECG has its headquarters.

2     The ECG shall comply with information requests made by the authorities of the States to which the territorial communities or authorities belong. The supervisory authorities of the Parties shall endeavour to establish means of appropriate co-ordination and information.

3     Decisions and acts of territorial communities or authorities and other public and private law entities shall be subject to the supervision and administrative and judicial review of the legality of acts of territorial communities or authorities and of other public law entities in the forms required in the States under whose jurisdiction the said authorities fall.

4       Where the ECG carries out any activity in contravention of the provisions on public policy, public security, public health or public morality of the States to which its members belong, or in contravention of the public interest of the said States, the competent authority or body of these States may prohibit that activity on its territory or require those members that fall under its jurisdiction to withdraw from the ECG unless the latter ceases the activity in question. Such prohibitions shall not constitute a means of arbitrary or disguised restriction on co-operation between the members. Review of the competent authority’s or body’s decision by a judicial authority shall be possible.

5       Notwithstanding the rules on dissolution of the ECG under the present Protocol and the statutes, at the request of a competent authority with a legitimate interest, a competent court or the competent authority of a Party where the ECG has its headquarters may order the ECG to be wound up if it finds that the ECG is acting outside the tasks entrusted to it. 

The competent court or authority may allow the ECG time to rectify the situation. If the ECG fails to do so within the time allowed, it may be declared wound up.

Article 12

Financial audit

1     The management and budget implementation of the ECG shall be subject to financial audit in accordance with the national law of the Party in which it has its headquarters. This State shall inform the other States whose territorial communities or authorities are members of the ECG without delay of the results of the audit and of the measures taken concerning the ECG.

2     Any other State implicated either by its direct participation in the ECG or through the participation of its territorial communities or authorities or other legal persons listed in Article 3, paragraph 1, may, only on its territory and in accordance with the national law applicable, carry out a financial audit of the ECG. The ECG and the States of the members shall be informed in advance.

Part II

Article 13

Implementation of the Protocol

1     The Parties shall take such legislative, administrative or other measures as are appropriate to ensure that the provisions of Part I of this Protocol are implemented within 12 months of its ratification. They shall inform their territorial communities or authorities and the Secretary General of the Council of Europe.

2     In order to facilitate implementation of this Protocol, an appendix will provide the more detailed, but optional provisions for the establishment and operation of ECGs. The Parties wishing to introduce into their national law all or part of the provisions of the appendix may do so in accordance with the relevant constitutional and legislative procedures.

3     The provisions of the appendix may be reproduced as they appear or may be adapted to meet the needs of the Parties concerned.

4     The Parties may declare that the provisions of the appendix, once introduced into their national legal system, constitute the implementing provisions referred to in paragraph 1.

5     The provisions of the appendix do not constitute an authoritative interpretation of the provisions included in Part I.

6     The provisions of the appendix shall be drafted by the Council of Europe and appended to this Protocol as soon as they are approved by the Committee of Ministers.

Article 14

Information

1. The Parties shall inform their territorial communities or authorities of the measures taken to implement this Protocol. 

2. The Parties shall notify the Secretary General of the Council of Europe of measures taken to implement this Protocol. 

3. The Parties shall forward to the Secretary General of the Council of Europe all appropriate information on ECGs set up pursuant to this Protocol.

Article 15

1     This Protocol shall not affect the applicability of treaties existing between the Parties in matters of transfrontier or interterritorial co-operation or the ability of the Parties to conclude new treaties on the subject if they so wish.  

2     In relations between Parties which are members of the European Union, this Protocol shall apply without prejudice to the applicable Community law.

Article 17

Reservations

No reservations in respect of this Protocol shall be permitted.

Article 18

Terms and definitions

The terms and definitions used in this Protocol have the same meaning and purpose as the same terms and definitions given in the European Outline Convention on Transfrontier Co-operation between Territorial Communities or Authorities, its Additional Protocol and Protocol No. 2.

Part III

Article 19

Signature and entry into force of the Protocol

1     This Protocol shall be open for signature by the States signatory to the European Outline Convention on Transfrontier Co-operation between Territorial Communities or Authorities. It shall be subject to ratification, acceptance or approval. A Signatory to this Protocol may not ratify, accept or approve it unless it has previously or simultaneously ratified, accepted or approved the European Outline Convention. Instruments of ratification, acceptance or approval shall be deposited with the Secretary General of the Council of Europe.

2     This Protocol shall enter into force on the first day of the month following the expiration of a period of three months after the date of deposit of the fourth instrument of ratification, acceptance or approval.

3      In respect of any signatory State which subsequently expresses its agreement to be bound by it, the Protocol shall enter into force on the first day of the month following the expiration of a period of three months after the date of deposit of the instrument of ratification, acceptance or approval.

Article 20

Accession

1     After the entry into force of this Protocol, any State which has acceded to the European Outline Convention may also accede to this Protocol.

2      Accession shall be effected by the deposit with the Secretary General of the Council of Europe of an instrument of accession, which shall take effect on the first day of the month following the expiration of a period of three months after the date of its deposit.

Article 21

Denunciation

1 Any Party may, at any time, denounce this Protocol by means of a notification addressed to the Secretary General of the Council of Europe. Such denunciation shall become effective on the first day of the month following the expiration of a period of six months after the date of receipt of such notification by the Secretary General.

2 If this Protocol is denounced, the legal personality and capacity of the ECGs established prior to the denunciation shall be unaffected.

Article 22

Notifications

The Secretary General of the Council of Europe shall notify the member States of the Council of Europe and any other State which has acceded to this Protocol of:

- any signature;

- the deposit of any instrument of ratification, acceptance, approval or accession;

- any date of entry into force of this Protocol in accordance with Articles 19 and 20;

- any domestic legislation implementing the provisions of this Protocol pursuant to Article 13, paragraph 1;

- any declaration received in application of the provisions of Article 4, paragraph 6, of Article 13, paragraph 4, and Article 16, paragraphs 1 and 3, or any notification of modification of such declarations;

- any other act, notification or communication relating to this Protocol.

In witness thereof the undersigned, being duly authorised thereto, have signed this Protocol.

Regulation (EC) No 1082/2006 of the European Parliament and of the Council of 5 July 2006 on a European grouping of territorial cooperation (EGTC)

Article 1

Nature of an EGTC

1. A European grouping of territorial cooperation, hereinafter referred to as ‘EGTC’, may be established on Community territory under the conditions and subject to the arrangements provided for by this Regulation.

2. The objective of an EGTC shall be to facilitate and promote cross-border, transnational and/or interregional cooperation, hereinafter referred to as ‘territorial cooperation’, between its members as set out in Article 3(1), with the exclusive aim of strengthening economic and social cohesion.

3. An EGTC shall have legal personality.

4. An EGTC shall have in each Member State the most extensive legal capacity accorded to legal persons under that Member State's national law. It may, in particular, acquire or

dispose of movable and immovable property and employ staff and may be a party to legal proceedings.

Article 2

Applicable law

1. An EGTC shall be governed by the following:

a) this Regulation;

b) where expressly authorised by this Regulation, the provisions of the convention and the statutes referred to in Articles 8 and 9;

c) in the case of matters not, or only partly, regulated by this Regulation, the laws of the Member State where the EGTC has its registered office.

Where it is necessary under Community or international private law to establish the choice of law which governs an EGTC's acts, an EGTC shall be treated as an entity of the Member State where it has its registered office.

2. Where a Member State comprises several territorial entities which have their own rules of applicable law, the reference to the law applicable under paragraph 1(c) shall include the law of those entities, taking into account the constitutional structure of the Member State concerned.

Article 11

Budget

1. An EGTC shall establish an annual budget which shall be adopted by the assembly, containing, in particular, a component on running costs and, if necessary, an operational component.

2. The preparation of its accounts including, where required, the accompanying annual report, and the auditing and publication of those accounts, shall be governed as provided for by Article 2(1)(c).

Article 3

Composition of an EGTC

1. An EGTC shall be made up of members, within the limits of their competences under national law, belonging to one or more of the following categories:

a) Member States;

b) regional authorities;

c) local authorities;

d) bodies governed by public law within the meaning of the second subparagraph of Article 1(9) of Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts.

N.B. According to the provision cited:

“A "body governed by public law" means any body:

(a) established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character;

(b) having legal personality; and

(c) financed, for the most part, by the State, regional or local authorities, or other bodies governed by public law; or subject to management supervision by those bodies; or having an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities, or by other bodies governed by public law.”

Associations consisting of bodies belonging to one or more of hese categories may also be members.

2. An EGTC shall be made up of members located on the territory of at least two Member States.

Article 4

Establishment of an EGTC (partim)

1.       The decision to establish an EGTC shall be taken at the initiative of its prospective members.

[…]

Article 8

Convention (partim)

1. An EGTC shall be governed by a convention concluded unanimously by its members in accordance with Article 4.

2. The convention shall specify:

a) the name of the EGTC and its registered office, which shall be located in a Member State under whose laws at least one of the members is formed;

b) the extent of the territory in which the EGTC may execute its tasks;

c) the specific objective and tasks of the EGTC, its duration and the conditions governing its dissolution;

d) the list of the EGTC's members;

e) the law applicable to the interpretation and enforcement of the convention, which shall be the law of the Member State where the EGTC has its registered office;

f) the appropriate arrangements for mutual recognition, including for the purposes of financial control; and

g)the procedures for amending the convention, which shall comply with the obligations set out in Articles 4 and 5.

Article 4

Establishment of an EGTC (continuation)

2. Each prospective member shall:

a) notify the Member State under whose law it has been formed of its intention to participate in an EGTC; and

b) send that Member State a copy of the proposed convention and statutes referred to in Articles 8 and 9.

3. Following notification under paragraph 2 by a prospective member, the Member State concerned shall, taking into account its constitutional structure, approve the prospective member's participation in the EGTC, unless it considers that such participation is not in conformity with this Regulation or national law, including the prospective member's powers and duties, or that such participation is not justified for reasons of public interest or of public policy of that Member State.

In such a case, the Member State shall give a statement of its reasons for withholding approval.

4. Member States shall designate the competent authorities to receive the notifications and documents as set out in paragraph 2.

5. The members shall agree on the convention referred to in Article 8 and the statutes referred to in Article 9 ensuring consistency with the approval of the Member States in accordance with paragraph 3 of this Article.

6. […]

Article 5

Acquisition of legal personality and publication in the Official Journal

1. The statutes referred to in Article 9 and any subsequent amendments thereto shall be registered and/or published in accordance with the applicable national law in the Member State where the EGTC concerned has its registered office. The EGTC shall acquire legal personality on the day of registration or publication, whichever occurs first. The members shall inform the Member States concerned and the Committee of the Regions of the convention and the registration and/or publication of the statutes.

2. The EGTC shall ensure that, within 10 working days from registration and/or publication of the statutes, a request is sent to the Office for Official Publications of the European Communities for publication of a notice in the Official Journal of the European Union announcing the establishment of the EGTC, with details of its name, objectives, members and registered office.

Article 9

Statutes

1. The statutes of an EGTC shall be adopted on the basis of the convention by its members acting unanimously.

2. The statutes of an EGTC shall contain, as a minimum, all the provisions of the convention together with the following:

a) the operating provisions of the EGTC's organs and their competencies, as well as the number of representatives of the members in the relevant organs;

b) the decision-making procedures of the EGTC;

c) the working language or languages;

d) the arrangements for its functioning, notably concerning personnel management, recruitment procedures and the nature of personnel contracts;

e) the arrangements for the members' financial contributions and the applicable accounting and budgetary rules, including on financial issues, of each of the members of the EGTC with respect to it;

f) the arrangements for members' liability in accordance with Article 12(2);

g)the authorities responsible for the designation of independent external auditors; and

h) the procedures for amending the statutes, which shall comply with the obligations set out in Articles 4 and 5.

Article 10

Organisation of an EGTC (partim)

1. An EGTC shall have at least the following organs:

a) an assembly, which is made up of representatives of its members;

b) a director, who represents the EGTC and acts on its behalf.

2. The statutes may provide for additional organs with clearly defined powers.

[…]

Article 4

Establishment of an EGTC (end)

6. Any amendment to the convention and any substantial amendment to the statutes shall be approved by the Member States according to the procedure set out in this Article. Substantial amendments to the statutes shall be those entailing, directly or indirectly, an amendment to the convention.

Article 7

Tasks

1. An EGTC shall carry out the tasks given to it by its members in accordance with this Regulation. Its tasks shall be defined by the convention agreed by its members, in conformity with Articles 4 and 8.

2. An EGTC shall act within the confines of the tasks given to it, which shall be limited to the facilitation and promotion of territorial cooperation to strengthen economic and social cohesion and be determined by its members on the basis that they all fall within the competence of every member under its national law.

3. Specifically, the tasks of an EGTC shall be limited primarily to the implementation of territorial cooperation programmes or projects co-financed by the Community through the European Regional Development Fund, the European Social Fund and/or the Cohesion Fund.

An EGTC may carry out other specific actions of territorial cooperation between its members in pursuit of the objective referred to in Article 1(2), with or without a financial contribution from the Community.

Member States may limit the tasks that EGTCs may carry out without a Community financial contribution. However, those tasks shall include at least the cooperation actions listed under Article 6 of Regulation (EC) No 1080/2006.

4. The tasks given to an EGTC by its members shall not concern the exercise of powers conferred by public law or of duties whose object is to safeguard the general interests of the State or of other public authorities, such as police and regulatory powers, justice and foreign policy.

5. The members of an EGTC may decide by unanimity to empower one of the members to execute its tasks.

Article 8

Convention (reminder)

2. The convention shall specify:

[.. ]

c) the specific objective and tasks of the EGTC, its duration and the conditions governing its dissolution;

[…]

Article 10

Organisation of an EGTC (end)

3. An EGTC shall be liable for the acts of its organs as regards third parties, even where such acts do not fall within the tasks of the EGTC.

Article 12

Liquidation, insolvency, cessation of payments and liability

1. As regards liquidation, insolvency, cessation of payments and similar procedures, an EGTC shall be governed by the laws of the Member State where it has its registered office, unless otherwise provided in paragraphs 2 and 3.

2. An EGTC shall be liable for its debts whatever their nature.

To the extent that the assets of an EGTC are insufficient to meet its liabilities, its members shall be liable for the EGTC's debts whatever their nature, each member's share being fixed in proportion to its contribution, unless the national law under which a member is formed excludes or limits the liability of that member. The arrangements for contributions shall be fixed in the statutes.

If the liability of at least one member of an EGTC is limited as a result of the national law under which it is formed, the other members may also limit their liability in the statutes.

The members may provide in the statutes that they will be liable, after they have ceased to be members of an EGTC, for obligations arising out of activities of the EGTC during their membership.

The name of an EGTC whose members have limited liability shall include the word ‘limited’.

Publication of the convention, statutes and accounts of an EGTC whose members have limited liability shall be at least equal to that required for other kinds of legal entity whose members have limited liability, formed under the laws of the Member State where that EGTC has its registered office.

A Member State may prohibit the registration on its territory of an EGTC whose members have limited liability.

3. Without prejudice to the financial responsibility of Member States in relation to any funding from the Structural and/or Cohesion Funds provided to an EGTC, no financial liability shall arise for Member States on account of this Regulation in relation to an EGTC of which they are not a member.

Article 15

Jurisdiction

1. Third parties who consider themselves wronged by the acts or omissions of an EGTC shall be entitled to pursue their claims by judicial process.

2. Except where otherwise provided for in this Regulation, Community legislation on jurisdiction shall apply to disputes involving an EGTC. In any case which is not provided for in such Community legislation, the competent courts for the resolution of disputes shall be the courts of the Member State where the EGTC has its registered office.

The competent courts for the resolution of disputes under Article 4(3) or (6) or under Article 13 shall be the courts of the Member State whose decision is challenged.

3. Nothing in this Regulation shall deprive citizens from exercising their national constitutional rights of appeal against public bodies which are members of an EGTC in respect of:

a) administrative decisions in respect of activities which are being carried out by the EGTC;

b) access to services in their own language; and

c) access to information.

In these cases the competent courts shall be those of the Member State under whose constitution the rights of appeal arise.

Article 13

                        Public interest

Member State's provisions on public policy, public security, public health or public morality, or in contravention of the public interest of a Member State, a competent body of that Member State may prohibit that activity on its territory or require those members which have been formed under its law to withdraw from the EGTC unless the EGTC ceases the activity in question.

Such prohibitions shall not constitute a means of arbitrary or disguised restriction on territorial cooperation between the EGTC's members. Review of the competent body's decision by a judicial authority shall be possible.

Article 14

Dissolution

1. Notwithstanding the provisions on dissolution contained in the convention, on an application by any competent authority with a legitimate interest, the competent court or authority of the Member State where an EGTC has its registered office shall order the EGTC to be wound up if it finds that the EGTC no longer complies with the requirements laid down in Articles 1(2) or 7 or, in particular, that the EGTC is acting outside the confines of the tasks laid down in Article 7. The competent court or authority shall inform all the Member States under whose law the members have been formed of any application to dissolve an EGTC.

2. The competent court or authority may allow the EGTC time to rectify the situation. If the EGTC fails to do so within the time allowed, the competent court or authority shall order it to be wound up.

Article 6

Control of management of public funds

1. Control of an EGTC's management of public funds shall be organised by the competent authorities of the Member State where the EGTC has its registered office. The Member State where the EGTC has its registered office shall designate the

competent authority for this task before giving its approval to participation in the EGTC under Article 4.

2. Where required under the national legislation of the other Member States concerned, the authorities of the Member State where an EGTC has its registered office shall make arrangements for the appropriate authorities in the other Member States concerned to carry out controls on their territory for those acts of the EGTC which are performed in those Member States and to exchange all appropriate information.

3. All controls shall be carried out according to internationally accepted audit standards.

4. Notwithstanding paragraphs 1, 2 and 3, where the tasks of an EGTC mentioned under the first or second subparagraph of Article 7(3) include actions which are co-financed by the Community, the relevant legislation concerning the control of funds provided by the Community shall apply.

5. The Member State where an EGTC has its registered office shall inform the other Member States concerned of any difficulties encountered during the controls.

Article 16

Final provisions

1. Member States shall make such provisions as are appropriate to ensure the effective application of this Regulation. Where required under the terms of that Member State's national law, a Member State may establish a comprehensive list of the tasks which the members of an EGTC within the meaning of Article 3(1) formed under its laws already have, as far as territorial cooperation within that Member State is concerned.

The Member State shall inform the Commission and the other Member States accordingly of any provisions adopted under this Article.

2. Member States may provide for the payment of fees in connection with the registration of the convention and statutes. Those fees may not, however, exceed the administrative cost thereof.

Preamble (exerpt)

(5) The Council of Europe acquis provides different opportunities and frameworks within which regional and local authorities can cooperate across borders. This instrument is not intended to circumvent those frameworks or provide a set of specific common rules which would uniformly govern all such arrangements throughout the Community.

Article 18

Entry into force

This Regulation shall enter into force on the day following its publication in the Official Journal of the European Union.

It shall apply by 1 August 2007, with the exception of Article 16, which shall apply from 1 August 2006.

Article 17

Report and review clause

By 1 August 2011, the Commission shall forward to the European Parliament and the Council a report on the application of this Regulation and proposals for amendments, where appropriate.

Observations

Territorial co-operation within the meaning of Regulation No 1082/2006 comprises transfrontier co-operation and interterritorial co-operation within the meaning of Protocol No 3.

An ECG may only be set up on the territory of a Council of Europe member State bound by Protocol No 3.

The bodies/organes referred to in Article 1, § 1, of the Protocol are in fact “legal persons” (Art. 3, § 1, 2^nd sentence, and Art. 16). The corresponding terms in the French version are “établissement[s] doté[s] de la personnalité morale” and “personnes morales”, respectively.

The objective assigned to ECGs is not confined to strengthening economic and social cohesion.

Unlike the legal capacity of an EGTC, that of an ECG is not automatically recognised in the other States Parties.

The contractual capacity of an EGTC is implicit.

In certain situations, the law of the headquarters State is overridden by or combined with the rules of the Protocol or with the law of other States (see commentary on Article 2 in the explanatory report).

The Regulation specifies that the founding agreement (convention)  and statutes may derogate from its provisions where it expressly authorises such a derogation. The corresponding provision of the Protocol is in Article 2.3 (see below, first part of Article 4).

Under Article 16.2 of the Protocol, autonomous public communities or authorities vested with their own legislative power are included in its scope, which implies that the legislation of these entities should be taken into consideration in determining the law applicable to an ECG.

In legal terms, an ECG is a grouping of regional and/or local public entities which may also be joined by the States concerned and by other legal persons providing a public service or controlled by the public authorities, whereas an EGTC is a mixed grouping in which regional and/or local authorities do not hold a predominant position.

The French version of the Protocol should be read as  “tout organisme doté de la personnalité morale”, as in Article 3 of the Regulation.

Here too, “tels établissements” should be read as ”tels organismes” in the French version of the Protocol.

Associations of regional or local authorities cannot be members of an ECG.

Individuals may not be members of an ECG either.

This provision of the Regulation is essential to establish the “transfrontier” nature of an EGTC, whereas the use of the terms “transfrontier and interterritorial co-operation” is sufficient to make this point in the Protocol.

Under Article 3.2 of the Protocol, its scope may be extended beyond the territory of the States Parties, but the headquarters of the ECG must be in a State Party sharing a border with the State non-Party to the Protocol.

This provision stresses the predominant position of territorial communities or authorities within ECGs.

Article 16, § 1, obliges States Parties to designate the categories of prospective members they intend to exclude from the scope of the Protocol. This rule enables States so wishing to establish an incompatibility between membership of an ECG and membership of an EGTC.

The initiative to establish an EGTC can therefore be taken by the States concerned, and not only by regional or local authorities.

The requirement to add the word “limited” to the name of an EGTC whose members have limited liability is set out in Article 12.2, para. 5, of the Regulation.

The rules on dissolution of an ECG are contained in its statutes (Protocol, Art. 5.3), which form an integral part of the agreement establishing it (Protocol, Art. 5.1).

Under Article 2.3 of the Protocol, the type of corporate entity chosen for an ECG by its founders is determined in accordance with the law of the headquarters State.

The “mutual recognition” referred to in Article 8.2.f of the Regulation is an obscure concept. Is this a reference to the legal capacity of an EGTC in States others than that in which the registered office is situated?

The Protocol affords additional protection by requiring prospective members of an ECG to prove to one another that they have respected the “necessary procedures or formalities required by the national law applicable to them”.

Whereas the Regulation requires the approval of each member State concerned, the Protocol provides only for authorisation to be obtained from each State “as appropriate/le cas échéant”, ie if  the national legislation of the State concerned so provides.

The wording used in the Regulation and the Protocol (“justified for reasons of public interest or of public policy”) is unfortunate. It actually amounts simply to a negative obligation: the participation of a prospective member of an ECG may not be contrary to public order or the public interest.

The States referred to in Article 4.6 of the Protocol are in principle those whose national legislation does not provide for, or does not provide in all cases for, certain of the procedures mentioned in this provision. Paragraph 6 thus gives the Protocol greater flexibility, enabling regional and local self-government to be respected more fully.

The Protocol is more demanding than the Regulation: it requires publication of the founding agreement in each State whose territorial communities or authorities are members of the ECG.

Article 4.9 of the Protocol, like Article 5.2, is inspired by Article 7 of the European Charter for Regional or Minority Languages.

As the agreement establishing an ECG is signed by all the founder members and the statutes of the ECG are part of that agreement, the statutes must also be unanimously adopted.

The Protocol also simplifies the procedure for setting up an ECG as compared with an EGTC by including the statutes in the agreement establishing the grouping. 

g: there is no comparable provision in the Protocol. Its usefulness seems questionable in the light of Article 6 of the Regulation and Article 12 of the Protocol.

The Protocol has no equivalent provisions: it does not require the director of an ECG to be an organ – and not an administrative officer – of the grouping, but it does not exclude that possibility. 

Because any amendment to the statutes of an ECG is an amendment to the agreement establishing it (by reason of Article 5.1 of the Protocol), any amendment – even non-substantive – to the statutes of an ECG must be adopted by the same procedure as the initial agreement.

The wording of the Protocol is broader than that of the Regulation.

The rule in the Regulation to the effect that the tasks of an EGTC must “all fall within the competence of every member under its national law” in principle rules out the participation of a prospective member lacking competence for any of the grouping’s tasks. This precludes the setting up of an EGTC on an “à la carte” basis, grouping together members with specific competences around the same general objective.

According to paragraph 11 of the preamble to the Regulation:

An EGTC should be able to act, either for the purpose of implementing territorial co-operation programmes or projects co-financed by the Community, notably under the Structural Funds in conformity with Regulation (EC) No 1083/2006 and Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the European Regional Development Fund (5), or for the purpose of carrying out actions of territorial cooperation which are at the sole initiative of the

Member States and their regional and local authorities with or without a financial contribution from the Community.

The Regulation has no provision comparable to Article 7.2 of the Protocol. This is a useful point to make.

The wording of Article 7.3 of the Protocol is narrower than that of the Regulation. It is inspired by Article 4.2 of the 1^st Additional Protocol and refers implicitly to administrative measures (which limit the exercise of freedoms proportionally to public order requirements). It will be noted that, by excluding “the exercise of powers conferred by public law”, the Regulation precludes the setting up of true public-law EGTCs. The same does not apply to the Protocol where ECGs are concerned.

The possibility of granting an ECG powers to be

exercised on behalf of the State has no equivalent in the Regulation, in view of the limited scope of the tasks that may be assigned to an EGTC.

There is no provision in the Protocol comparable to Article 7.5 of the Regulation.

In purely theoretical terms, Article 8.2 of the Protocol gives an ECG less statutory autonomy than that enjoyed by an EGTC because it specifies the cases in which the grouping may be dissolved. Furthermore, it affords greater protection to the interests of territorial communities and authorities when they no longer hold a majority within the organs of an ECG.

There is some confusion in Article 9 of the Protocol between liability generally and liability for debts. Under the Regulation, an EGTC is always liable for the acts of its organs. Article 9.1 of the Protocol sets forth the principle of liability of an ECG by reason of its legal personality; it may be assumed that such liability is triggered only by the acts of its organs. Where debts are concerned, see the observations on Article 12.2 of the Regulation.

According to the Protocol’s explanatory report, “the

law to which [an ECG] may be subject” does not refer solely to the law of the headquarters State.

There is no provision comparable to Article 9.3 of the Protocol in the Regulation.

The fact that every ECG is subject to the law of the headquarters State in these matters stems from Article 2.1 of the Protocol.

Under Article 9.1 of the Protocol, the members of an ECG are jointly liable for the grouping’s debts in the event of its failure to pay. The “joint” nature of the obligation means that each member of the grouping is liable only for its share, which is probably limited to the amount of the member’s contribution, as in  the Regulation on the EGTC (Art. 12.2).

The Protocol has no provision comparable to Article

12.2, para. 4, of the Regulation.

The Protocol has no provision comparable to Article 12.2, para. 6, of the Regulation.

Article 1.2 of the 1^st Additional Protocol excludes any liability on the part of a State for acts of an ECG whose members come within its jurisdiction.

This provision is implied by Article 10.2 of the Protocol where ECGs are concerned.

“Community legislation on jurisdiction” (Regulation, Art. 15.2) probably refers to Chapter 2 of Council Regulation 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. 

There is a gap in Article 10.2 of the Protocol  insofar as it provides no means of determining what the competent courts will be when the third party is resident or carries on activities in a non-member State of the Council of Europe. Furthermore, it is incompatible with Article 15.2 of the Regulation: the fact of the third party being effectively resident or having a seat of activity outside the State in which the ECG has its headquarters automatically precludes the courts of that State from having jurisdiction, although that is the rule for the settlement of disputes to which an EGTC is party.

To make paragraph 2 compatible with the system of Regulation No 1082/2006, provision would need to be made for a cumulative or alternative jurisdiction clause, conferring jurisdiction both on the courts of the State in which the grouping has its headquarters and on those of the State in which the third party effectively resides or has a seat of activity.

The Protocol has no provision equivalent to Article 15.2, para. 2, of the Regulation. The substance of this rule can however be found in Article 11.1 of the Protocol.

There are no provisions comparable to Article 10.3 of the Protocol in the Regulation.

In requiring the conclusion of an arbitration agreement where the third party’s residence or seat is not located in a Council of Europe member State, the second sentence of Article 10.3 of the Protocol is intended to complement Article 10.2, which confers jurisdiction on the courts of the State of residence or headquarters State only if that State is a member of the Council of Europe.

Article 10.4 of the Protocol deals with a possibility not mentioned in the Regulation, namely the delegation of tasks to an ECG by one or more territorial communities or authorities which are members of it. In the event of a dispute arising out of those activities, aggrieved third parties can apply to the courts of the State having jurisdiction over the communities or authorities on behalf of which the grouping acted.

Article 10.5 of the Protocol paraphrases Article 15.3 of the Regulation, but does not specify against whom the right of appeal may be exercised and does not designate the competent courts.

In Article 15.3.(a) of the Regulation, the “administrative decisions in respect of activities” are not those of the EGTC, but those of each of its public-law members responsible for implementing the decisions of its organs. Article 15.3 implies that, however the EGTC is organised, each public-law

member of the grouping retains full responsibility vis-à-vis members of the public in respect of the three points mentioned.

Article 11.1 of the Protocol does not specify the rules of supervision and review applicable where an ECG comprises different categories of territorial communities or authorities (eg municipalities, départements and groupings of municipalities, which may be subject to different rules of supervision and review in the same State Party).

Furthermore, the Regulation has no provisions comparable to Article 11.1 and 2 of the Protocol. To ensure full conformity as between supervision systems, each State Party should be required to appoint one or more administrative authorities to verify not only the competence of every ECG but also the conformity of its action with the public interest (by analogy with Articles 13 and 14 of the Regulation).

In Article 11.3 of the Protocol, the words “and other legal persons members of the ECG” should be read in place of the words “and other public and private law entities” / “and of other private law entities”.— It should be noted that it is possible that such a review might not be provided for by law in respect of some private-law entities which are members of the ECG.

Unlike Article 6.1 of the Regulation, Article 12.1 of the Protocol requires the other States concerned to be informed of the results of the financial audit.

In the French version of the Protocol, Article 12.1 should be read as follows: “les autres Etats dont relèvent les collectivités ou autorités territoriales […]”.

The procedure described in Article 12.2 of the Protocol is less complex than that referred to in Article 6.2 of the Regulation.

The Protocol has no provision comparable to Article 6.3 of the Regulation, but all Member States of the European Union are subject to a similar rule under EU derived law.

The French text of Article 20.1 of the Protocol should read: “adhérer également à ce Protocole.”