Russian Bill targets foreign-funded NGOs
2 July 2012
On June 29, a group of seven deputies submitted to the Russian Duma the draft law Introducing Amendments to Legislative Acts of the Russian Federation in Part Regulating Activities of Non-commercial Organizations, which Carry Functions of Foreign Agents (hereinafter referred to as “the draft law”).The seven deputies who submitted the draft to the Duma are all representatives of the ruling United Russia party.
It is expected that the draft law will pass through the first reading in Russian Duma on July 6 and will be adopted by the Russian parliament soon after. According to the current text of the draft law, the law will come into effect 90 days after its official publication, which is usually on the date it is signed by the President.
There are no transitional provisions in the text of the draft law that would allow non-commercial organizations (NCOs) to bring their activities into compliance. The law states that the procedures will be developed by authorized government agencies, but does not specify when the procedures will be available or how NCOs are expected to comply in the interim. Further, if the draft remains as is, the government can start penalizing NCOs the day after the new law comes into effect.
The draft law introduces amendments to six federal laws, including Laws on Public Associations, On Non-commercial Organizations, On Counteracting Legalization (Money Laundering) of Incomes received in a Criminal Way, and Financing Terrorism, and the Code of Administrative Penalties, Criminal and Criminal Procedural Codes.
A brief overview of key provisions restricting foreign aid and activities of NCOs is provided below:
- The draft law requires all NCOs to register with a specially authorized governmental body (which will be the Ministry of Justice) prior to receipt of funding from any foreign sources if they intend to conduct political activities. Such NCOs are to be called “NCOs carrying functions of a foreign agent.” The Russian translation of the foreign agent (иностранный агент) carries a negative connotation and is usually interpreted as a synonym of “foreign spy.”
- Details for registration procedure for NCOs/ foreign agents are to be determined by the authorized government agency, but they are not defined in the draft law. Overly complex requirements might create an additional burden for NCOs.
- A primary problem with the draft law is its expansive definition of political activities as those dedicated to changing state policy as well as to influencing public opinion relating to changing public policy. In other words, any advocacy activity could be considered a “political activity.” One can reasonably assume that the law will have a disproportionate effect on democracy, governance, and human rights activities.
- All materials published by NCOs/foreign agents must identify the publishing entity as a foreign agent, regardless of whether the particular material was sponsored by foreign funding.
- The authorized government agency will exert strict control over all NCO/foreign agent activities. NCO/foreign agents will be required to pass through annual independent audit; maintain separate accounting of assets generated through local and foreign sources; and submit reports on activities on a biannual basis and reports on expenditures of assets on a quarterly basis. Reporting forms are to be determined by the authorized government agency and could be burdensome if overly complex.
- Under the draft law, foreign organizations operating in Russia through registered offices will be subject to the following new requirements:
- They must undergo an annual independent audit by a Russian auditing company and submit the resulting audit report to an authorized government agency (Ministry of Justice);
- The authorized government agency will post all such reports as well as reports on the finances and activities of foreign organizations operating in Russia on its website and provide them to the media;
- In addition to the independent audit, the authorized government agency will also have the authority to conduct its own audits of the registered offices of foreign organizations.
- The government will have the authority to suspend the activities of an NCO/foreign agent for up to 6 months if the NCO fails to register as a foreign agent but was receiving foreign funding and conducting political activities.
- Special control will be imposed on all transfers received by NCOs from foreign sources valued above 200,000 rubles.
- The draft law introduces harsh penalties for non-compliance:
- For failure to submit information required by law, the penalty is up to 50,000 rubles for individuals and up to 1,000,000 rubles for NCOs.
- For conducting activities without registration as a foreign agent when such registration is required, the penalty is up to 500,000 rubles for individuals and up to 1,000,000 rubles for organizations.
- The draft law amends the Criminal Code to introduce a penalty of up to 2 years of corrective work for those individuals who do not fulfill their responsibilities under law while performing as foreign agents in an aggravated manner.
The new law, if adopted, will undoubtedly have a negative effect on Russian civil society.