In 1949 the working party on Road Transport of the Inland Transport Committee of the Economic Commission for Europe of the United Nations sent to Governments of Member States a Recomendation inviting them to ask insurance covering third party liability risks in respect of the use of vehicles to conclude agreements for the establishment of uniform and practical provisions to enable motorists to be satisfactorily insured when entering countries where insurance against such risks is compulsory.
This recommendation concluded that the introduction of a uniform insurance document would be the best way to achieve that end and set out the basic principles of agreements to be concluded between insurers in the different countries.
The inter-Bureaux Agreement , the text of which was adopted in November 1951 by representatives of the insurers in States which ,at the time, had responded favourably to the recomendation, formed the basis of the relationship between these insurers.
In each of the European countries a central organization called Bureau is to be founded that is recognized by the government of that country. This organization is competent to implement the tasks of the Green Card Bureau.These Bureaux are united by a Head Organization the Council of Bureaux (CoB) residing in London(today Brussels).
They have a double function:
*As Paying Bureau they issue International Insurance Certificates (of green colour) so-called Green Cards to their member companies and at the same time in their function as Paying Bureau they guarantee to reimburse the outlays of the so-called Handling Bureau.
*In its function as Handling Bureau the Bureau has the task to handle claims caused by a foreign motor vehicle provided with a Green Card which is valid for the corresponding visited country. The settlement is done in accordance with the laws and provisions of the visited country.
The Bureaux participating in this system agree on the aforementioned principles in bilateral contracts concluded further to a binding model agreement being the Uniform Agreement (UA) also called London Agreement according to the Place of Signature.
The bilateral character thus makes it possible to decide with which Bureau an Agreement is to be concluded.
Lateron the system was improved by the so-called "Addendum to the UA" providing that the guarantee was not documented by means of the Green Card but by the Vehicle registration plates.
The Uniform Agreement was amended at several occasions and at last fundamentally renewed with effect from 1.1.1991. A further improvement was due to the foundation of the Multilateral Guarantee Agreement of 15th March 1991. Consequently in case of foreign motor vehicles adhering to the signatory countries of the Multilateral Guarantee Agreement the vehicle registration plate is replacing the Green Card. Therefore the Agreement is also called Vehicle Registration Agreement. This means that the Paying Bureau shall also be liable for damages if the registered user of the vehicle does not possess a valid Green Card. Insurance cover thus is faked. (Turkey is not a signatory to the Multilateral Guarantee Agreement)