WESTERN EUROPE
European Court of Human Rights I European Court of Justice I Ireland
European Court of Human Rights
Nationality-based
Requirements for NGO Registration
By
Karla W. Simon
Case
Note on Commission of the European
Communities v. the Kingdom of Belgium (European Court of Justice 1999).
In the June 29, 1999,
decision of the European Court of Justice (ECJ) in Commission of the European Communities v. the Kingdom of Belgium, the
Court held that the Kingdom of Belgium was not compliant with its obligations
under the Treaty of the European Community (EC Treaty). Specifically, provisions
of Belgian law were held to be in violation of Article 6 (now Article 12) of the
EC Treaty. This article prohibits discrimination against EC nationals on the
basis of nationality. The offending provisions of Belgian law required the
presence of at least one Belgian national in an association registered as a
legal person under Belgian law:
1) under Article 1 of the Law of 25 October 1919, granting legal personality to international associations involved in various philanthropic activities, an "international association" was required to have one Belgian national in its management; and
2)
under Article 26 of the Law of 27 June 1921, granting legal personality
to not-for-profit associations and institutions promoting the public interest,
an organization was required to have Belgian nationals as three-fifths of its
members.
Although
the case involves an interpretation of the EC Treaty and is thus relevant only
to states party to that Treaty as well as to accession states, it raises an
issue that is of more general interest. Is it appropriate for the law to require
that a certain minimum number of
citizens be members of or be present in the governance structure of a
domestically registered NGO? In both the World Bank's draft Handbook
on Good Practices for Law Relating to Nongovernmental Organizations and the
Open Society Institute's Guidelines for
Law Affecting Civic Organizations, the issue of the registration of foreign
organizations is discussed. Both books take a strong position that foreign NGOs
should be allowed to register branches, affiliates, or subsidiaries in any
state, under terms and conditions applicable to domestic NGOs. See, Guidelines Section 10.1 and Handbook
Section 35. But neither book deals with the issue discussed here.
In
the elaboration of the principles behind permitting foreign NGOs to register,
both the Handbook and the Guidelines
stress that a state does have appropriate interests at stake in protecting
its citizens from harm by an entity that has activities or operations within its
borders. There is thus a need for a foreign NGO to be subject to court
jurisdiction in any state in which it has more than a minimum of activities.
This is necessary in case it or its agents breach a contract, or commit
negligent or criminal acts. Similar concerns appear to have been relevant when
the Belgian parliament inserted the provision in the 1919 law requiring the
presence of a Belgian national in the management of an international
association. According to Dirk Longtings, an attorney with the Brussels office
of Hogan & Hartson, this provision was intended to ensure that "the
Belgian authorities would always have jurisdiction over at least one person
connected with the association." See Dirk Longtings, "The
Practice of the Ministry of Justice Regarding International Non-Profit
Associations," in REEKS: NON-PROFIT RECHT & MANAGEMENT 11, 21
(1996). Similar concerns presumably animated the similar provision in the 1921
law.
Belgium
must now amend its laws to remove discrimination against the citizens of other
EU countries. In order to come into compliance with the EC Treaty, it could do
so by eliminating only the discrimination against other citizens of the European
Union. The question that remains, however, is whether amendments that are so
limited would make good policy sense.
Clearly,
any country has a legitimate interest in assuring that it has meaningful
jurisdiction over an entity that is operating on its territory. In order to be
able to enforce its laws and protect its citizens, any state must be able to
assert jurisdiction over entities formed by foreigners. This legitimate state
interest is met, however, if the entity itself is properly formed under the laws
of that country (e.g., Belgium), whether any individual Belgian citizens are
active as managers or members. A well-crafted law on foundations or associations
should require that any entity formed under Belgian law have a locally-resident
agent for acceptance of service of legal process or other binding legal
documents. If service on an organization's designated agent is sufficient to
assert jurisdiction over it, Belgium will be able to enforce its laws against
that entity and assure its citizens that they can bring lawsuits effectively
against that entity in a Belgian court.
Consistent
with the position taken in the Handbook and
the Guidelines, a state should also
not limit the access of foreign NGOs to operations within its borders. The
state's important and legitimate interests in protecting its citizens and
ensuring jurisdiction over the foreign NGOs would seem to be satisfied once
there is assurance that legal process can be served locally upon an authorized
representative of foreign persons. It seems neither necessary nor appropriate
for foreign persons to be excluded from the country, to be forced to register a
domestic entity, or to have any entity that is registered dominated or
controlled by local citizens. In a rapidly globalizing world, the life of civil
society, like all other major human activities, will inevitably become more
internationalized, with activities of NGOs and interactions between them
increasingly flowing across national boundaries.
In
short, it seems both unnecessary and undesirable for laws relating to NGOs to
exclude foreign persons, including foreign NGOs, or to impose strict
nationalistic requirements upon the membership or governance structure of a
locally registered NGO. The anti-discrimination provision of the EC Treaty
represents a form of good practice, one that should be emulated by countries in
their own laws. Any forward-looking nation should embrace the nondiscrimination
principle embodied in the EC Treaty and recently applied vigorously by the
European Court of Justice.
ICNL would like to thank Bart Servaes, an attorney in the Brussels office of JP Morgan, who provided access to materials that were used in writing this note.
Case
98042 - Mr. John Burns of The Sunday Times newspaper and the Office of the
Revenue Commissioners
A
recent case on the freedom of information concerned the right to obtain the
names of organizations in Ireland that had been granted tax exemption on the
basis of their charitable status. The tax authority initially refused the
request by a journalist on the grounds that the information had been supplied to
it in confidence. Subsequently, following negotiations with the Office of the
Information Commissioner, the tax authority agreed to release the names of all
those charities that did not object. The Commissioner then reviewed the cases of
the 127 charities that had refused to consent unconditionally to the release of
the information. On 8 July 1999 the Commissioner annulled the decision of the
tax authority and directed that the names of all but one of the charities that
had refused consent should be disclosed.
In
the case of the single charity whose name was ordered to be withheld from
disclosure, the Commissioner found that the public interest in the disclosure of
the name of the charity did not outweigh the public interest in ensuring that
the charity can meet its objectives. Therefore the Commissioner accepted that
the one of the statutory grounds (section 27 (1) (c) of the Freedom of
Information Act 1997) for refusing to disclose information was satisfied, namely
that disclosure could prejudice the conduct or outcome of contractual or other
negotiations of the charity concerned.
In
the other cases the Commissioner found that the disclosure of the names of the
charities did not involve the disclosure of any other information that was not
publicly available, and that such disclosure would not prejudice the enforcement
or administration of the tax law.