Central and Eastern Europe

CENTRAL AND EASTERN EUROPE

Index: Albania - Bulgaria - Croatia - Czech Republic - Hungary
Latvia - Lithuania - Macedonia - Romania - Slovakia

Framework Legislation

In February 1999, the Albanian NGO-government drafting group met with ICNL in Ohrid, Macedonia to discuss final changes to the draft Law on Non-Governmental Organizations. IJNL Regional Coordinating Editor, Dr. Petr Pajas from the Czech Republic, also provided assistance on this draft. Among other things, the final draft creates a third not-for-profit organizational form called "centers." The draft also provides a broad range of public policy activities, expands the ability of NGOs to engage in economic activities, liberalizes registration procedures, and gives NGOs broad discretion to establish internal governance rules. The draft also contains provisions on foreign organizations operating in Albania.

The draft law was finalized in March. However, the drafting group decided that it would not be appropriate to submit the final draft law to the Council of Ministers at this time, since the government is pre-occupied with the emergency conditions created by the crisis in Kosova.

For a complete list of Albanian Documents available in ICNL's documentation center, Click Here!

BULGARIA

Three draft laws designed to govern the not-for-profit (NGO) sector have been introduced into Parliament – the draft Law on Organizations with Non-Profit Purposes; the draft Law on Legal Persons with Non-Economic Goal; and the Draft Law on Non-Profit Organizations. First reading of all three laws is expected in April. Thereafter, a working group, comprised of the sponsors of the three drafts and other experts will seek to consolidate the three into a single law. Sponsors hope that Parliament will enact the new law during the current parliamentary session. The NGO sector in Bulgaria has been actively advocating sound legal reform for several years and has undertaken an effective organized effort to achieve results in 1999.

If a new status law is enacted this session, legislative efforts will begin with respect to reform of tax laws affecting NGOs. In particular, benefits will be sought for individuals who make contributions to organizations serving the public interest, as well as special tax treatment for economic activities of NGOs. The objective of these initiatives will be to promote NGO economic self-sustainability at a time that support from abroad is declining.

For a complete list of Bulgarian Documents available in ICNL's documentation center, Click Here!

CROATIA

The Draft Law on Public Assembly and Peaceful Protest, which was previously withdrawn, has gone through a second reading before the Parliament.

The current Law on Associations is expected to be amended. A working group is in the process of being formed, with the purpose of proposing amendments to the law.

ICNL continues to be engaged in the process of improving the legislative framework for NGO activity in Croatia. We are preparing for publication a "Question & Answer" brochure on tax law issues affecting NGOs. ICNL is also organizing a seminar on Croatian tax law in April, in collaboration with the Government Office for NGO Cooperation and CERANEO. The seminar will target mainly NGO financial managers. Government officials will also be invited to participate in the seminar. The Question & Answer brochure will be available in English and Croatian, and the Croatian version will be distributed at the seminar.

ICNL will work with the Government Office for NGO Cooperation to organize a seminar on NGO/Government cooperation in May 1999.

For a complete list of Croatian Documents available in ICNL's documentation center, Click Here!

CZECH REPUBLIC

1. Framework Legislation

The lower house of the Czech Parliament has approved the government's proposed amendments to the Income Tax Act. The proposed changes include an increase in the maximum limit on allowable donations by legal entities where the total donations include gifts to social, health, ecological, humanitarian and charity purposes in connection with a natural disaster; in such cases the maximum allowable deduction is to be increased from 2% to 4% of the donor's taxable income. The amendments will enter into force when they have been approved by the Senate and published in the official Collection of Laws. (Section 20 (8) Income Tax Act, as amended by Law No.)

2. Is there New Attitude to the Civil Society in the Czech Republic?
By Petr Pajas, First Consulting p.b.c., Prague - ICNL Senior Consultant

In 1999, the Czech Republic is no more conceived, nor proudly claiming to be an economic tiger of the post-communist world. The economic stagnation, some say a crisis, has occurred. For some, it came as a lightning from the blue sky, for others it seems to be a consequence of a politics similar to that applied a century ago by a Russian gentleman, whose name was Potemkin.

More than that happened. The Czech politicians lost the ability to communicate. As a result, the right wing coalition government was found unable to govern and Prime Minister Mr. Klaus, the charismatic self-confident liberal economist, was forced to step down. One year after, the Czech Republic has a minority government of Social Democrats secured in its balancing on the edge position by the so-called "stability" or "opposition" agreement with the Civil Democratic Party of Mr. Klaus, now in opposition.

But there is also another consequence. Those politicians, for whom the Third Sector was just a fuzzy term without any content, are nowadays organizing the meetings with civil sector representatives. They ask for a sincere discussion about possible way out of the crisis.

Several events of the last three or four months may serve as evidence to this obvious change in the attitude.

As an initiative of three senators representing three minor political parties, there has been organized "The Forum for the Civil Society" at the Senate - the upper chamber of the Czech Parliament. At this conference, many representatives of Civil Organizations (COs) presented their activities in four sections devoted to advocacy, public benefit services, promotion of spiritual values and education. The senators promised to form a specific task group, which should study the recommendations of the conference participants. Eventually, the group should prepare amendments of the existing laws or even initiate drafting of new laws concerning COs, be it registration, governance, economic, activities, reporting and liquidation on one side or tax and fees exempts and other benefits on the other side.
The Lower Chamber of the Czech Parliament also organized a special session devoted to the civil sector. The Vice-President of the Chamber, Ms. Buzkova, opened the session by saying that the session is to be understood as "a first installment to the long-term depth of the Parliament towards the civil sector". Mr. Basta, minister of the Government, who is responsible also for the NGOs of the Czech Republic, came with a summary of the problems the civil sector still has to face and promised to do all possible to remedy the situation. He also promised to bring to successful end the case of distributing about 15,000,000 US dollars to the endowments of selected Czech foundations. At the same meeting, representatives of individual line ministries reported on how they support the civil sector, while the representatives of the sector spoke about their achievements and needs.
The Senate continued in the series of events by a seminar devoted to actual legislative issues concerning the civil sector [See also the article by L. Deverova, P. Pajas: Recent Experience with Re-Registering of Foundations in the Czech Republic]. At this seminar, it was reported also about the implementation of the new laws on public benefit corporations, foundations and funds. The uncompromising, incoherent, and in some cases even subjective decisions of courts in cases of registration of existing foundations according to the new laws may cause a serious damage to the sector. Again, senators called for a summary of these cases to be used for further legislative actions.
The Information Center for NGOs (known as ICN), together with several other COs, has organized a public relations campaign under the logo "30 Days for the Civil Sector." During February 1999, there were more than 140 regional events organized and more than 200 television and radio broadcasts dealing with issues concerning the sector, and hundreds of articles were published in the regional and national press.
A round-table of politicians, academicians and CO representatives, organized by the Donors Forum as a part of the above mentioned campaign, have come to the conclusion that the civil sector must be involved in the search for the solution of the economic and social crisis of the Czech Republic.
The biggest event of the above mentioned campaign was the Discussion Forum on Citizens Initiatives Cooperation with the State. In their speeches, several VIPs* called for close cooperation of the Government with the civil sector.
Recently, the Council for Non-Governmental Not-for-Profit Organizations, which is a permanent advisory body to the Czech Government, finished its work on evaluating the tender for an endowment to be distributed to selected foundations as a portion of the money set aside during the voucher privatization of Czech industry.
The same Council decided in these days on establishment of a special task group, which should study how to distinguish between public benefit and mutual benefit activities of civic organizations. The aim of the study is to prepare the argumentation for amendment of tax and public procurement laws.

As it follows from the above list of events, the civil sector of the Czech Republic has come into focus of the political development. Let us hope that this new situation will bring about the continuing improvement in the relations of the sector with the state to the benefit of the traumatized Czech society.

* The key speakers of the Forum were Mr. Vaclav Havel, President of the Czech Republic, Mr. Richard von Weizsäcker, former President of the Federal Republic Germany, Mr. John Shattuck, Ambassador of the United States of America, Mr. Michel van Hulten, President of the European Forum from Netherlands and Mr. Kumi Naidoo, General Secretary of CIVICUS.

For a complete list of Czech documents available in ICNL's documentation center, Click Here!

HUNGARY

On March 23 1999, the Hungarian NGO community successfully completed a publicity campaign for the Hungarian 1% law. The law, which provides the possibility for tax payers to designate 1% of their tax due to NGOs and an additional 1% to religious organizations, is unique in the region. ICNL is providing assistance to legislators and NGOs in other countries who are interested in introducing a similar law.

For a complete list of Hungarian documents available in ICNL's documentation center, Click Here!

LATVIA

On 10 September 1998, the Parliament passed a law amending certain corporate income tax provisions with effect from 1 January 1998. As from this date, donations to approved charitable, cultural, religious, sporting, etc. organizations that have been so certified by regulations of the Cabinet of Ministers qualify for an increased deduction of 90% (previously 85%) of the amount of the donation. The previous rule allowing a 90% deduction for donations to certain organizations such as the Latvian Olympic Committee, the Latvian Children's Fund and the Latvian Culture Fund was abolished. (BNA Eastern Europe Reporter December 1998)

For a complete list of Latvian documents available in ICNL's documentation center, Click Here!

LITHUANIA

The Law on Charity and Sponsorship

At the time of the Open Hearing on this law last December 9, the Council of Ministers was debating the law at virtually the same time as the Seimas Committees on Budget & Finance and Social Affairs & Labor. As it turned out, the law was returned to the Ministry of Finance (MoF), with instructions to give formal approval, based upon plans for establishing a system to regulate charitable giving and prevent abuse. The time for the MoF to respond has just come to an end, and we believe that they are going to send the Law to the Seimas, but it is not yet certain.

The issue here is how to regulate PBOs. Because of the decentralized nature of NGO registration, there is nothing approaching a central data base that could be used to supervise charitable giving. And because public benefit status (and benefits such as a reduced rate of taxation) generally results automatically from the granting of legal personality, there is really no way to determine whether PBOs de facto are PBOs de jure. There is much interest in the Estonian model, but the two factors mentioned above make it a challenge.

The distinction between charity, which can only be given to natural persons (healing, feeding, etc.) and sponsorship, which can be given to legal persons (culture, science, education, etc.) is described as being in accordance with Lithuanian traditions. However, this dichotomy complicates both the concept of public benefit, as there are really two categories, and administration, since the rules are different. By making it possible to give to the NGO itself (eliminating the requirement that donations be made to a "program" run by the NGO, a term which is undefined) and setting forth the categories of public benefit more clearly, and defining terms, the
amended version of the Law is a definite step in the right direction. The NGO sector is supportive. As you know from your work in the region though, those who seek models of legislative clarity should always carry an
accurate compass.

By Mark Segal msegal@usaid.gov

For a complete list of Lithuanian documents available in ICNL's documentation center, Click Here!

MACEDONIA

Framework Legislation

Since the enactment of the Law on Citizen Associations and Foundations in June 1998, the primary drafters of the law, Dr. Natasha Gaber and Professor Borce Davitkovski, have been actively working on implementation, education and training projects. For example, they have just drafted an official commentary, which provides interpretations of the new law. The official commentary will be published and distributed to judges, government officials, lawyers, and NGOs. The drafters have also provided consultations on re-registration procedures and trained judges on implementing the new law. The drafters will organize another training for judges as well as a training of trainers program in order to expand the base of lawyers, NGO representatives and government officials knowledgeable about the NGO law.

For a complete list of Macedonian documents available in ICNL's documentation center, Click Here!

ROMANIA

Framework Legislation

The draft Law on Associations and Foundations is still "stuck" with the Government and has not yet been introduced in the Parliament. The Ministry of Justice will apparently try to have the law passed as an emergency government ordinance during the next Parliamentary recess.

ICNL commissioned a study on the Legal Framework for NGO/Government Cooperation. The study will soon be available both in Romanian and in English from ICNL.

ICNL is also preparing a comparative assessment of NGO/Government cooperation on the basis of the above study, using international examples of successful partnerships between NGOs and the Government.

The study and the comparative assessment will be published and distributed at a one-day seminar ICNL is organizing at the beginning of June on NGO/Government cooperation. ICNL is working closely with Centras, World Learning and FDSC in Romania in preparing the seminar. It will target Parliamentarians, Government officials and NGO representatives.

ICNL is working on the preparation of a country report on Romanian NGO legislation.

For a complete list of Romanian documents available in ICNL's documentation center, Click Here!

SLOVAKIA

The Ministry of Justice of Slovakia formed a drafting committee tasked with preparing amendments to the Law on Public Benefit Organizations and a new Law on Foundations. The committee includes representatives of the Ministry of Justice, Ministry of Finance, Ministry of Interior and NGO representatives. ICNL was asked by Minister of Justice Jan Carnogursky to serve as a member of the committee. The drafting committee is expected to submit its proposal by April 30, 1999.

ICNL commissioned a report on tax and fiscal laws impacting on NGOs in Slovakia and another on the legislative framework for cooperation between NGOs and public administration. Copies of both reports in English and Slovak are available from ICNL.

For a complete list of Slovak documents available in ICNL's documentation center, Click Here!

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All contents Copyright (c) 1999, International Center for Not-for-Profit Law. All rights reserved.
Revised: July 22, 2004.