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The International Journal
of Not-for-Profit Law

Volume 13, Issues 1-2, April 2011

A publication of the International Center for Not-for-Profit Law

Table of Contents

Letter from the Editor

Global Philanthropy

Legal Framework for Global Philanthropy: Barriers and Opportunities
David Moore and Douglas Rutzen
International Center for Not-for-Profit Law

Articles

Legal Framework of NGOs in Cambodia
Ke Bunthoeurn

Case Note: AID/WATCH Inc. v. Commissioner of Taxation
Myles McGregor-Lowndes

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Editorial Board

Legal Framework of NGOs in Cambodia

By Ke Bunthoeurn*

Introduction

Cambodian civil society is a new phenomenon, a result of the Paris Peace Accord of 1991 and the arrival of international peacekeeping forces. During the Transitional Authority in Cambodia (UNTAC) period between 1992 and 1993, many local groups, including political parties, Non-Governmental Organizations (NGOs), and single-interest groups were established, most of them concentrating on human rights, democracy, gender equality, election, and relief work. Since then the Cambodian civil society has proliferated and consolidated, creating a new political sector. Whereas the main civil society “actors” are the Cambodian NGOs, there are also other important civil society contributors, including labor unions, community-based organizations (CBOs), professional associations, and student groups. They aim to represent through strengthening and channeling the voice of the people or advocating for the people’s demands and needs.

The important contribution of NGOs in the rehabilitation, reconstruction, and development efforts of Cambodia in the past two decades is well recognized by the Royal Government of Cambodia (RGC) and International Donor Agencies. NGOs continue to play a major role in supporting the provision of basic social services, often in remote areas and communities, and are present in every province in Cambodia. More importantly, NGOs bring alternative models and approaches to development, emphasizing participation, equity, gender sensitivity, and environmental sustainability. NGOs have been instrumental in advocating for national reforms that pave the way for improvements in health, education, human rights, the legal system, social services, the environment, and women and children’s rights.

The number of International NGOs in Cambodia has remained at around 200 over the past few years, up from 25 in the early 1980s. The number of local NGOs and associations, however, continues to rise. In 2002, there were almost 400 local NGOs and nearly 600 associations registered with the Royal Government of Cambodia, which is a dramatic increase from 1991 when the first local NGO was established. An estimated 13,000 Cambodians were working for and with the NGO sector throughout Cambodia. In addition, more than 40 NGO sectoral and issue working groups, both formal and informal in nature, come together on issues of common interest in support of the development of Cambodia. Informal NGO networks exist in almost every province and play an increasingly important role in contributing to an informed dialogue on development processes and policies.[1] Currently registered with the Ministry of Interior are approximately 2,465 local NGOs and associations, and around 300 international NGOs.

NGOs have been popular in Cambodia because they help and support people without discriminating. Some NGOs, particularly human rights NGOs, give recommendations and may criticize government officials who abuse the human rights by violating the constitution or international treaties. This criticism has caused the government to suggest that the NGOs are simply supporting an opposition party. The relationship also creates tensions when the RGC grants lands to business people without following the existing regulations and thereby affects people’s living conditions without paying appropriate compensation. Sometimes the RGC evicts and moves poor people from one place to another without providing adequate support.[2] These kinds of illegal activities have been criticized by NGOs.

In 2008, the Prime Minister said that NGOs are out of control and that they insult the government just to ensure their financial survival. In order to control NGO activities and track the funding sources of NGOs, under the expressed concern that terrorists might settle in the kingdom under the guise of NGOs, he announced that the government would legally limit the ways in which NGOs can work.[3] He also said the law is one of three high-priority pieces of legislation for the government’s current five-year term, along with a new penal code and a much-anticipated anti-corruption law delayed since the 1990s.

However, a criminal code was adopted in 2008 which covered punishment against NGOs as well. The anti-corruption law treated NGO directors as public servants, requiring them to report owned property every two years (Articles 17 and 18 of the anti-corruption law).[4]

Executive Summary

Background

NGOs are playing an important role for Cambodian society. They are working directly with people in remote areas to provide legal services, capacity building, and other important activities. RGC recognized NGOs’ development role in Cambodia and also put its strategy to work with NGOs as a partnership. However, the relationship between RGC and NGOs (particularly human rights NGOs) started bitterly when the Cambodian People Party (CCP) won an election majority in 2008. Because of the stated fear that those NGOs could obtain funds or donations from terrorist groups during his term, the Prime Minister sought enactment of a draft NGO Law by the National Assembly in order to control or manage NGO activities. Currently, the draft is under consideration at the Ministry of Interior (MoI) and the Ministry of Foreign Affairs. On August 10, 2010, MoI issued a letter seeking funding for public consultations, but the Ministry did not publicly disclose the contents of the draft. Most NGOs, including development and human right NGOs, do not favor this law because they perceive it as a tool to control their activities.

Scope of Research

This limited research focuses on:

Chapter 1: Legal Framework of Nonprofit Organizations

  1. Nonprofit Organizations in United States of America (USA)

The United States has a federal system of government, with power divided between the national government and the individual states that together form the country. As a general matter, the creation and operation of nonprofits and other legal entities (corporations, partnerships, trusts, etc.) is governed by the individual states. States may also have their own rules for exemption from state taxes. While state laws governing nonprofits have broad similarities, they vary considerably in their details (although a growing number of states are adopting model nonprofit corporation acts, thus increasing uniformity across states). Differences among state nonprofit regimes not only increase the overall complexity of the system but also allow nonprofits a certain degree of flexibility by allowing them to incorporate in a state with laws that fit their needs. When a charity is organized in one state but operates in another, conflict-of-law puzzles as to which state’s law applies to a particular question may create complications that a unitary system would not face (although other countries may face parallel difficulties when foreign organizations operate within their borders).

The federal government also exerts substantial influence over nonprofits through its control of federal income tax and the related exemption for charitable nonprofits. Certain kinds of purposes (generally listed in the US Internal Revenue Code Sec. 501(c)(3)) qualify for establishing tax-exempt status for the organization. This means, in effect, that most nonprofits must act with an eye to both federal and state laws, which sometimes impose overlapping but not identical requirements. For instance, a charitable organization selling real estate to a director must make sure not to breach state rules against self-dealing and also federal tax rules, which impose various penalties if the transaction confers an excess benefit on the director.

Despite the complications of its federal regime, the United States benefits from a long history of experience with charitable (tax-exempt) organizations. It is thus common to find detailed regulations or well-developed bodies of case law governing many questions that arise in the course of operating a nonprofit.

Some state constitutions guarantee that certain charitable entities will be tax-free. Others merely permit the legislature to enact such exemptions. For historical reasons, state constitutions also commonly prohibit state legislatures from passing special acts to incorporate particular organizations.

1.1 Types of Nonprofit Organizations

A nonprofit organization is a special type of corporation formed for charitable and other purposes that are not profit seeking. It has many of the features of standard corporations with the major exception being its tax status.

Nonprofit corporations do not issue stock. Tax-exempt status can provide desirable tax advantages to nonprofit corporations that may qualify for government grants to do research, educational experiments, or other qualifying activities.

Since personal contributions to many nonprofit corporations are tax deductible, many tax-exempt corporations utilize this incentive to obtain substantial funds, often running into the millions of dollars for their qualifying operations. There are many fundraising firms that have organized to help nonprofit corporations.[5]

Owners of a nonprofit corporation should contact an Internal Revenue Service (IRS) office and obtain forms to qualify for tax-exempt status.

In the USA, there two basic types of nonprofit organization with legal identity:

  1. Nonprofit corporation
  2. The most common legal vehicle for charitable activities in the United States is the nonprofit corporation. Generally, nonprofit corporations, like their for-profit counterparts, provide legal-entity status, limited liability, and perpetual duration.[6] They are governed by a board of directors, which usually has broad discretion to decide how best to pursue their charitable objectives. The chief difference from for-profit corporations is that nonprofit corporations abide by what has been termed the “non-distribution constraint”: they do not distribute profits to members, shareholders, or other insiders.

  3. Trusts

The chief alternative to the nonprofit corporation is the trust. While corporations are created pursuant to statute, the law of trusts is largely a creation of the common law (though many states have, to varying extents, passed statutes codifying trust law). Fundamentally, a trust is a device by which one or more legal persons hold legal title to property, but do so for the benefit of some other person, class, or purpose. Thus, the conceptual focus of trust law is not on the trust as a separate legal entity, but rather on the duty of the trustees to use the property as the settler (creator) of the trust wished, and not for their own private purposes.[7] Because a trust is not technically a legal person, historically trustees were sometimes held personally liable for contracts and torts associated with the trust. However, the modern trend has been to distinguish between a trustee acting in his personal capacity and a trustee acting in his capacity as trustee, allowing an action directly against the trust for damages to third parties resulting from the trustee’s actions on its behalf. Thus, at least the contractual obligations of the trust do not normally run to the trustee (although if the trustee commits a tort on behalf of the trust, both may be liable). Similarly, the trustee’s personal creditors cannot seek to recover his personal debt from trust property. Thus, in practice trust law provides at least some of the advantages of separate legal personhood.

1.2 Unincorporated Associations

Besides the nonprofit corporation and the trust, one other form of organization deserves mention. Groups of individuals can form unincorporated associations governed only by their mutual agreement, and requiring no registration with the state. These membership associations are extremely flexible but possess the drawback of having no legal personality. Thus, unincorporated associations have traditionally been able neither to sue nor be sued in their own name nor to own property (any property they hold is actually owned collectively by their members). In addition, because of the ease and familiarity of forming nonprofit corporations and trusts, the law governing unincorporated associations is relatively undeveloped and uncertain.

1.3 Registration Regimes

Regulation of NGOs in the USA differs from one state to another. For this paper, research was limited to a state which has easy requirements for registration, Maryland. Other states, such as New York and California, provide more complex regulation of nonprofits.

In Maryland the primary method to register to acquire legal entity is online. Many, if not all, states have their own websites which provide model registration forms. In Maryland a person may simply complete the model form and then file it together with required documentation electronically. For certification as a “tax-exempt non-stock corporation,” the nonprofit organization must complete articles of incorporation designed especially for such a corporation. The official responsible for NGO registration responds within 30 days with a determination of whether the application qualifies or not. In the event an applicant has failed to file sufficient documentation, its representative must respond and provide the needed information within 30 days after receiving the government’s notice. If the NGO’s representative fails to respond within the set date, all the documents that s/he has filed will not be considered and the representative must resubmit the application.

Tax-exempt status: If the founders of an NGO believe that their organization qualifies, they may apply to the federal Internal Revenue Service for certification as “tax-exempt,” demonstrating their qualifications for this status. This certification applies to most Federal as well as state and local taxes, when it has been presented to the state and local governments.

In conclusion, in order to form a nonprofit organization, the applicant goes through nine phases:

Phase 1 - Organize: The applicant shall create a mission statement about the organization; develop a fundraising plan; draft bylaws (Maryland does not require a copy of an organization’s bylaws, but they must be attached to the federal tax-exemption application); select a board of directors and elect officers; file articles of incorporation with the State Department of Assessment and Taxation (SDAT); file a trade name registration form with SDAT (if the organization is using a name other than the one contained in the article of incorporation); obtain a federal Employer Identification Number (EIN) from the IRS; and hold an organizational meeting.

Phase 2 - Obtain Federal Tax-Exemption Determination: The applicant must complete and file form 1023 if seeking 501(c)(3) status.

Phase 3 - Registration for Charitable Solicitation: The applicant files the charitable solicitation form (COR-92).

Phase 4 - State Filing After Organization Receives 501(c)(3) Determination: The applicant submits a combined registration application (this is required to obtain a sale tax exemption).

Phase 5 – Maintain status: The organization files MD form No. 1, personal property return; form 990-N, form 990-EZ, or form 990 to the IRS based on annual gross receipts; and MD Form COR-85 if not filing IRS Form 990.

Phase 6 - State Tax Exemption: The organization applies for property tax exemptions.

Phase 7 - For Employees or Independent Contractors: The organization pays state employment and unemployment taxes, federal employment taxes, and workers’ compensation insurance, and displays required posters.

Phase 8 - Obtain Proper Insurance for Organization, Board Members, and Officers: The organization assesses property and liability insurance needs for the organization; Maryland Nonprofits can help an organization determine its insurance needs.

Phase 9 - Final IRS Determination: The organization responds to the IRS letter five years after obtaining the advance ruling by filing form 8734 (support schedule for advanced ruling period for publicly supported entities).

2- Regulations That Affect NGO Activities in Cambodia

2.1 Domestic Laws

 

2.1.1 The Constitution

The constitution is the supreme law of the land. It may be amended only by a designated process involving legislative approval, a popular referendum, or both. All executive, legislative, and judicial structures are created by the terms of the constitution. Since it was first written in 1993, the constitution has been amended several times by politicians who considered amendments to be in the nation’s interest. However, despite all amendments, the constitution must not alter the liberal and pluralistic democracy and regime of the Cambodian constitutional monarchy (article 134).

Chapter three of the constitution contains a declaration of fundamental rights, including the rights to life, personal liberty, security, freedom of movement, freedom of religion, assembly and association (including political parties and trade unions), due process and equality before the law, protection from arbitrary deprivation of property without just compensation, and freedom from racial, ethnic, religious, or sexual discrimination. It prohibits the retroactive application of criminal law. The provisions are consistent with the Universal Declaration of Human Rights and other relevant international instruments. An aggrieved individual is entitled to have the courts adjudicate and enforce these rights.

Freedom of expression, including freedom of the press, is addressed in Article 41. The word “expression” includes both speech as well as peaceful and silent demonstrations. The freedom, however, is not absolute. It is subject to restrictions, such as not infringing on the rights of others. If the expression by way of speech or writing or any media publication amounts to slander or defamation of any person, such conduct becomes actionable. The restrictions also apply to public order, national security, and the good traditions of the society.

In other words, Parliament may enact legislation that restricts the freedom of speech and expression on the basis of public order, national security, and morality, though the law must be reasonable and just.

International Human Rights Treaties guaranteed under the constitution:

The Paris Accords included a commitment to ratify international rights treaties. Accordingly, Cambodia has become party to the following treaties:[8]

The Cambodian Constitutional Council is the body established under the Constitution to safeguard respect for the Constitution. In its decision of 10 July 2007, the Constitution Council reaffirmed the application of the international human rights treaties in Cambodian law and reminded judges that, in deciding cases, they are obligated to consider all Cambodian

Law, “including the Constitution, which is the supreme law, and other applicable laws as well as the international convention that Cambodia has recognized.…” As a result, the human rights of everyone in Cambodia should be fully protected under the Constitution in accordance with the rule of law.[9]

However, despite the constitutional imperative, in practice judges rarely take international instruments into account in adjudicating cases.

2.1.2 Civil Code (CC):

Articles 46 – 118 of Chapter II of CC stipulate about juridical persons.

A) Definition

A “juridical person” is a non-natural person specially endowed with a personality in law.[10] It is an entity, such as corporation, created by law and given certain legal rights and duties of a human being; i.e., a being, real or imaginary, that for the purpose of legal reasoning is treated more or less as a human being.[11]

In Article 46 of the Cambodian Civil Code, paragraph 1 provides that a juridical person is the subject of rights and obligations, and therefore can own property or do business with other persons, under protection of law.

B) Types of Juridical Persons

In the field of private law, “juridical person” refers to two categories: an “incorporated association” and an “incorporated foundation.”

Juridical persons that do not have profit among their objects are referred to as “non-profit juridical persons,” and juridical persons that do have profit among their objects as “for-profit juridical persons.” Incorporated associations for which the members are liable for the debts of the juridical person up to the amount of property contributed are referred to as “limited-liability incorporated associations,” and those for which the members are liable for the debts of the juridical person with all their property are referred to as “unlimited liability incorporated associations.”[14]

Article 46-5 of CC provides that a non-profit juridical person may be incorporated under this law or another law.

The code also contains specific requirements for the formation of both local and foreign nonprofit juridical persons, including provisions governing residence, management and dissolution, and liquidation.

C) Requirements for Establishment

Articles of association or a “constitution” embodying fundamental rules concerning the make-up and operations of the projected juridical person must contain the following information:[15]

C.1 Local Juridical Person – Required Information

- Purposes of the organization: A description of the mission of organization, such as to enable the Cambodian people to secure their rights as provided in the Cambodian constitution and consistent with international norms. However, the purpose of organization must not include carrying out unlawful activities, impairing national security, or serving a foreign state.[16]

- The name: Nonprofit organizations should not be named as “limited” or “unlimited corporation associations.”[17]

- Addresses of the principal office and secondary office(s): The place of a corporation’s chief executive office, which is typically viewed as the “nerve center.”

- If grounds for dissolution have been provided in the articles of incorporation, the constitution should include a clear description of permissible grounds for dissolution – for example, when the juridical person has achieved its mission or all members want to dissolve the organization.

- The names and addresses of the directors and supervisor(s); in the case of an unlimited liability incorporated association, the names and addresses of the members shall be stated.

- If any directors are not empowered to represent the juridical person, the name(s) of the director(s) who are so empowered.

- If there is a provision for more than one director jointly to represent the juridical person, such provision must be included.

C.2 Changing the Address of a Juridical Person

If there is a change in any particular listed in Paragraph (1) of article 50 of CC, such change shall be registered within two weeks following its occurrence at the registry having jurisdiction over the principal office and within three weeks at the registry having jurisdiction over any other office.

Notwithstanding Paragraph (1) of article 52, where an office has been relocated within the area of jurisdiction of a single registry, only such relocation need be registered.

C.3 Provisional Disposition[18]

If there is provisional disposition to suspend the performance of duties by, or to appoint a substitute for, a registered director, supervisor, liquidator, or member, or a change or cancellation of such provisional disposition, registration thereof shall be effected at the registry having jurisdiction over the principal office and at the registry having jurisdiction over any other office. In such cases the second sentence of Paragraph (2) of article 50[19] shall apply mutatis mutandis.

The civil code does not identify the “competent authorities” who are authorized to register nonprofit organizations.

C.2 Foreign Juridical Persons

The requirements of article 50 also apply to foreign juridical persons.[20] An international nonprofit organization shall be formed in accordance with the laws of its country of residence.[21] However, foreign juridical persons are not recognized as juridical persons except in the cases of states, administrative divisions of states, and foreign trading companies, provided that juridical persons may be recognized as such by Cambodian laws or treaties.[22] If a nonprofit international organization wants to locate in Cambodia, it shall comply with a special law adopted by Parliament, or enter into a memorandum of understanding (MOU) with government of Cambodia. This provision provides only a narrow space for foreign juridical persons that intend to support the Cambodian people, but this provision does not restrict foreign juridical persons that wish to donate to Cambodian nonprofit organizations. If this provision is implemented, all foreign nonprofit organizations in Cambodia will be required to enter into memoranda of understanding with the government. However, because government officials are often suspicious of the intentions of foreign organizations, registration or entering into an MOU may be difficult or even impossible.[23]

D. Change of Residence of Juridical Persons

Article 51 to Article 53 of CC provide as follows:

The address of a juridical person must be registered within two weeks following any relocation at the registry having jurisdiction over the principal office and within three weeks at the registry having jurisdiction over any other office.[24] In practice, when a juridical person changes its principal office, its director may simply submit a notification letter to the Ministry of Interior and relevant authorities where its residence is based.

E. Management and Administration of Juridical Persons

In order to secure its business and for transparency, a juridical person must prepare an inventory of assets at the time of its establishment and subsequently not later than the third month of each fiscal year, and also maintain an up-to-date membership list at its office.[25] The Civil Code is silent regarding moves of employees of a juridical person. However, in the event of such a move, labor law requires notification of the Ministry of Labor.[26]

E.1 Director

An association must appoint one or more directors to serve as its “executive organ.” For incorporation, a foundation shall have at least three directors. Internally, the directors have the power and are bound to manage and conduct all affairs within the scope of the objects of the association and subject to the decisions of the general assembly. If it is necessary to hire staff to achieve the organization’s purposes, the directors have authority to appoint and dismiss them and supervise them. If there are several directors, and they cannot agree on issues that arise in the management of the association, these matters will be decided by a majority vote unless the Articles of Association provide otherwise.[27] Externally, the directors represent the association. They are in the position of legal representatives as regards all juridical acts relating to the affairs of the association. Liability for an action taken by the directors vis-à-vis third persons will be assumed by the association – such action is not deemed to be an act of the directors themselves, but instead constitutes an act of the association.

E.2 Temporary Director (Special Representative)

The manner in which directors are appointed or dismissed must be specified in the Articles of Association. If, however, a vacancy occurs among the directors, and damage might be caused to the juridical person by a delay to comport with the specified method for appointing a new director, the court shall, on the application of any interested person or a Public Prosecutor, appoint a temporary director.[28] A director has no power to represent the association in regard to a mater in which his interests conflicts with those of the association. In such a case also, if there is no other director free to act on the application of any person or a Public Prosecutor, the court shall appoint a special representative and empower him to represent the juridical person regarding such matters.[29]

F. Dissolution of Association

F.1 Cause of Dissolution

Unlike natural persons, juridical persons may permanently continue in existence. However, an association is dissolved (Article 64 of CC) under the following circumstances:

F.1.1 Internal Matters

- the occurrence of a ground of dissolution prescribed in the articles of incorporation

- the conclusion of the undertaking that is the object of the juridical person, or the impossibility thereof

The juridical person may simply dissolve itself in accordance with procedures contained in its Articles of Incorporation, or if carrying out the organization’s primary purposes becomes impossible. For example, consider hypothetically a Khmer Help Khmer Association (KHKA), whose constitution provides that when it builds housing for 10,000 families, its mission is accomplished and it may be dissolved. Or to take another example, KHKA was given an ancient jug and promised the donor that it would receive fees from tourists who wish to see the jug. Income raised from viewings of the jug would be donated to the poor and pay for construction of 10,000 houses for them over a two-year period. However, one year later, the jug was broken in a typhoon. The objective of KHKA became impossible to achieve, so KHKA could dissolve itself.

F.1.2 External Matters

- Bankruptcy: If an association is no longer able to fulfill its obligations, the directors must forthwith make an application for an adjudication of bankruptcy. A creditor or ex officio member may also make the application. Thereafter, the association is adjudicated in bankruptcy.

- Judgment ordering dissolution: In principle, only a court order can force the dissolution of a juridical person. The government does not have the legal power to dissolve an organization. The Minister of Justice has authority to issue a written warning to a juridical person to suspend its activities if in his judgment it has abused its powers as prescribed by law, regulation, or the Articles of Incorporation, or if it has violated any penal law or regulation.[30] However, the Minister’s decision is not final, and the juridical person may continue its activities until the court has issued its judgment.

F.1.3 Reasons for a Court to Dissolve a Juridical Person

After a court receives a complaint from a competent person[31] who seeks to dissolve the juridical person, the court may order the juridical person dissolved if and only if one of the following circumstances applies and the reasons are compelling:[32]

Notwithstanding Paragraphs (2) and (3) of Article 65, the court may order the juridical person dissolved if the court determines, upon application by the Minister of Justice or by any member, creditor, or other interested person, that the public interest requires termination of the juridical person for any of the grounds listed below:

F.2 Liquidation

Involving as it does various complicated legal relations, the dissolution of an association provides opportunities for substantial abuse. Accordingly, the affairs of an association are placed under the supervision of the competent authority, the dissolution supervision of the Court, who may at any time make necessary inspections. In addition, “liquidators” are authorized to attend faithfully and promptly to all matters relating to the settlement and disposition of activities in which the dissolved association is involved.

F.3 Reversion of Surplus Assets

Article 67 of CC states that “the reversion of any surplus assets after full payment of the debts of the juridical person shall be governed by the articles of incorporation. In the case of an incorporated association, if reversion is not determined in accordance with Paragraph (1), it shall be determined by resolution of the general meeting of members in the case of a limited liability incorporated association and by decision of all the members in the case of an unlimited liability incorporated association. Surplus assets of which the reversion is not determined by Paragraphs (1) or (2) shall revert to the National Treasury.” In principle, a nonprofit organization that has received funds from a donor must transfer those properties in accordance with the expressed wishes of the donor.

G. Responsibility of Juridical Person

G.1 Civil Responsibility (Tort)

A juridical person, like a natural person, is capable of acting. A person who intentionally or negligently infringes on the rights or benefits of another in violation of law is liable for the payment of damages for any harm occurring as a result.[33] Where a director or other legal representative of a juridical person harms another in violation of law in the exercise of such person’s duties, the juridical person itself is liable for the payment of damages. A juridical person that pays damages may demand compensation from the representative who committed the tortious act.[34]

G.2 Criminal Responsibility

In the event the directors, supervisors, or liquidators act in contravention of the above provisions, their acts may be void, or they may be required to pay damages to the juridical person or to a third person. However, to the extent that the activities of a juridical person affect the public interest, a further penalty is provided in the form of a fine. The fine seeks to induce the organization’s officials to attend to their duties faithfully, though it is to be doubted whether the amount of the punishment is altogether adequate for the purpose of effecting the this goal.[35]

The juridical person can be punished in two ways: fines, as the principal penalty; and additional penalties set out in Article 168 (additional penalties applicable to legal entities).[36] The penalties applicable to legal persons stated in Articles 167-182 apply, as well as other articles of the Criminal Code.

G.2.1 Principal Penalty

Article 42 of criminal code provides with respect to the responsibility of a juridical person as follows: “In case it is precisely provided for by a law and legal instruments, legal entities, to the exclusion of the State, may be declared as being criminally responsible for the offenses committed, on their behalf, by their organs or their representatives. The criminal responsibility of the legal entity does not exclude the criminal responsibility of the natural person for the same acts.” Accordingly, when the court finds a juridical person guilty of a crime, the responsible natural person may be punished as well. This article does not clearly determine whether all members of a legal entity may be punished or not. However, in principle, each person should be individually responsible for his/her act only.[37]

The provisions of titles 1 through 3 of book 1 of the Criminal Code relating to natural persons are applicable to legal entities to the extent that the provisions are compatible with the provisions of the Title.[38]

G.2.2 Additional Penalty

The additional penalties applicable to legal entities are the following:[39]

A juridical person may also be charged with the offense of breach of trust[53] committed by misappropriating, at the expense of another, funds, assets, or any other property by a person who has been entrusted with and who has accepted with a duty to return them, to demonstrate[54] them, or to make a specific use of them. The juridical person will face a fine and even dissolution[55] if the court finds guilt. The officer or supervisor may also be fined and imprisoned.[56]

Legal entities may be also found criminally responsible according to provisions of Article 42 (Criminal Responsibilities of Legal Entities) for offenses proscribed in Article 404 (Definition of Money Laundering).[57]

In the event that a juridical person gives either directly or indirectly, any donation, present, promise, or any interest to a judge to fulfill any act in his/her responsibility, or not fulfill any act in his/her responsibility with respect to the juridical person, such juridical person shall be fined and punished by additional penalties as provided in Article 519. An offense committed by a legal entity as a felony, misdemeanor, or petty crime is determined by the penalty imposed on a natural person.[58] When a natural person acted outside of his/her duty to carry out the purposes of the juridical person, the act of the natural person and that of the juridical person are differentiated. Moreover, when an obligation or prohibition is pronounced on a legal entity, the violation by a natural person of this obligation or prohibition is punishable by an imprisonment from 1 (one) year to 2 (two) years and a fine from 2,000,000 (two million) Riels to 4,000,000 (four million) Riels.[59] Legal entities may be found criminally responsible according to conditions of Article 42 (Criminal Responsibilities of Legal Entities) for offenses proscribed in Article 605 (Delivering of Bribes), Article 606 (Active Influential Deal[60]), and Article 607 (Intimidation) of the Criminal Code. Legal entities are subject to monetary fines and other additional penalties[61] and a juridical person also may be charged with bribery (article 644), if it meets the conditions of a bribe paid either to an Authorized Person to Issue Forged Document[62] or to a member of a Health Organization to Issue a Forged Certificate.[63]

2.1.3 Anti-Corruption Law

The purpose of this law is to promote effectiveness of all forms of service and strengthen good governance and the rule of law in leadership and state governance as well as to maintain integrity and justice which is fundamental for social development and poverty reduction in Cambodia.[64] The national assembly passed the anti-corruption law in May 2010 by treating juridical persons like public civil servants. This is a new context for civil society, and NGOs will face legal and criminal challenges if they fail to comply.

In a survey of 200 students and 300 other citizens in Phnom Penh and provinces, respondents expressed their view that the anti-corruption law should be applied to a director or supervisor of NGOs as well, because NGOs receive funding from donors and some NGO leaders become rich through appropriating these funds and then leave the NGO community.[65]

A foreigner who works in the transparency context also expresses his opinion that Cambodia is facing severe corruption problems, and the NGO sector itself is also perceived as corrupt. Some employees of NGOs earn more than people in the government; consequently, the NGO community should also take part in the anti-corruption efforts by meeting high performance and transparency standards. However, the anti-corruption law is contradicted by international norms, especially the UN convention against corruption.[66] Anti-corruption law in Cambodia treats NGO directors as public civil servants, even though they lack any public power to issue binding orders or to punish those who disobey them.

The anti-corruption law is applied not only to public civil servants and leaders of civil society, but also to foreign public officials or officials of public international organizations (who, however, are not required to report their own property). Cambodian courts have jurisdiction over actions within Cambodia’s territory only, but in cases raised by the Anti-Corruption Unit (ACU) concerning suspicion of a foreign public official’s engaging in corrupt activities in Cambodia, the chairman of ACU may request assistance from international institutions in conducting forensic examinations related to its investigation work.[67]

Foreign public officials or officials of public international organizations shall be sentenced from 7 years to 15 years for wrongfully asking for, demanding, or accepting, directly or indirectly, any gift, donation, promise, or other benefit in order to: (1) either perform his/her duty or be facilitated by his/her function; or (2) refrain from performing his/her duty or being facilitated by his/her function.[68]

A legal entity is found to commit a corrupt act if it has taken steps to conceal, keep, or transport any kinds of goods with knowledge that those are the proceeds of corruption as described in this law. Acts that can also be treated as unlawfully handling the proceeds of corruption are as follows: (1) acting as intermediary for transporting items with the knowledge that they are proceeds of corruption; or (2) an act that benefits from corruption proceeds with clear knowledge. The legal entity shall be subject to a fine of ten million Riel (10,000,000) to one hundred million Riel (100,000,000) and face accessory penalties as follows:[69]

  1. Dissolution.

  2. Placement under court oversight.
  3. Barring of operation of an activity or activities.
  4. Expulsion from public procurement.
  5. Prohibition on public saving appeals.[70]

  6. Prohibition on issuing checks other than checks certified by a bank.
  7. Prohibition on issuing payment vouchers.
  8. Closure of the institution being used to organize or commit offenses.
  9. Prohibition of the business establishment open to the public or used by the public.
  10. Confiscation of instruments, materials, or any objects used to commit the offense or aimed to commit offense.
  11. Confiscation of objects or funds which are the subject of committing the offense.
  12. Confiscation of capital or property that derives from the offense.
  13. Confiscation of proceeds, material, and furniture in building where an offense is committed.
  14. Posting of the conviction judgment.
  15. Publication of the conviction judgment in print media or the announcement in non-print media outlets.

The anti-corruption law also requires that all leaders[71] of civil society[72] declare their assets and liabilities every two years.[73] If someone fails to declare his/her assets and liabilities, such person shall be sentenced from one month to one year in prison and fined from one hundred thousand Riels (100,000) to two million (2,000,000) Riel, as well as be forced to make an asset declaration to the Anti-Corruption Unit.[74] This law provides that if any juridical person issues a statement or lodges a complaint to authority or judges which leads to a futile inquiry, such juridical person will be liable for defamation and disinformation.[75]

Article 283 (criminal responsibility by legal entity), article 409 (Criminal responsibility by legal entity), article 519 (Criminal responsibility by legal entity), article 559 (criminal responsibility by legal entity), article 625 (criminal responsibility by legal entity), and article 644 (criminal responsibility by legal entity) of the Criminal Code all set forth corruption offenses to be implemented as part of anti-corruption law.[76]

  1. International Legal Instruments

The 1991 Paris Peace Accords, which formally ended the Cambodia conflict, established international human rights norms as a basis for lasting peace in Cambodia. Article 15 of the agreement on a comprehensive political settlement of the Cambodia conflict states:

All persons in Cambodia and all Cambodian refugees and displaced persons shall enjoy the rights and freedoms embodied in the Universal Declaration of Human Rights and other relevant international human rights instrument.

The signatories made a specific commitment to ensure respect for human rights in Cambodia, support the rights of Cambodians to promote and protect human rights, and take effective measures “to ensure that the policies and practices of the past shall never be allowed to return.”

The agreement provided for the incorporation of a declaration of human rights in the Cambodian Constitution. Annex 5 of the Agreement states:

Cambodia’s tragic recent history requires special measures to assure protection of human rights. Therefore the constitution will contain a declaration of fundamental rights, including the rights to life, liberty, security, freedom of movement, freedom of religion, assembly and association including political parties and trade unions, due process and equality before the law, protection from arbitrary deprivation of property or deprivation of private property without just compensation, and freedom from racial, ethnic, religious or sexual discrimination. It will prohibit the retroactive application of criminal law. The declaration will be consistent with the Universal Declaration of Human Rights and other relevant instrument. Aggrieved individuals will be entitled to have the courts adjudicate and enforce these rights.

In accordance with this provision, the 1993 Constitution of Kingdom of Cambodia includes a declaration of fundamental rights in Chapter III: The rights and obligation of Citizens of Cambodia. Certain other provisions of the Constitution are also relevant to the protection of human rights.[77]

It is emphasized that Article 31 of Cambodian Constitution stipulates that the Kingdom of Cambodia shall recognize and respect human rights as stipulated in the United Nations Charter, the Universal Declaration of Human Rights, the covenants and conventions related to human rights, and women’s and children’s rights. Every Khmer citizen shall be equal before the law, enjoying the same rights and freedoms and fulfilling the same obligations regardless of race, color, sex, language, religious belief, political tendency, birth origin, social status, wealth, or other status. The exercise of personal rights and freedom by any individual shall not adversely affect the rights and freedoms of others. The exercise of such rights and freedoms shall be in accordance with the law.

Khmer citizens shall have freedom of expression, press, publication, and assembly,[78] along with the right to establish associations and political parties. Khmer citizens may take part in mass organizations for mutual benefit to protect national achievement and social order.[79]

Cambodia ratified and became a member of many international legal instruments. Those relevant to this topic include the Universal Declaration of Human Rights (UDHR), ILO Declaration on Fundamental Principles, Rights at Work and United Nations Millennium Declaration.

UDHR[80] was adopted by the United Nations General Assembly in 1948 after the end of the Second World War as a common standard of achievement for all peoples and all nations. Apart from core civil society rights to express, associate, and assemble, the UDHR assures fundamental human rights to all people, both civil and political, as well as economic, social, and cultural. The UDHR is the source from which various human rights treaties and instruments have been developed. Although conceived as a Declaration as opposed to a treaty, today the UDHR is widely regarded as a part of international customary law.

Right to form and join association: Everyone has the right to freedom of peaceful assembly and association. No one may be compelled to belong to an association.[81] Everyone has the right to form and to join trade unions for the protection of his interests.[82]

ICESCR:[83] States are required to take positive steps to implement these rights, to the maximum of their resources, in order to achieve the progressive realization of the rights recognized in the Covenant, particularly through the adoption of domestic legislation.

The Economic and Social Council is responsible for monitoring the implementation of the Covenant by the state parties. The Committee on Economic, Social, and Cultural Rights is the delegated body to fulfill this task. States are required to report to the Committee within two years of becoming a party to the Covenant and thereafter every five years.

Article 8 (Freedom of Association and the Right to Organize):

The States Parties to the Present Covenant undertake to ensure: (a) The right of everyone to form trade unions and join the trade union of his choice, subject only to the rules of the organization concerned, for the promotion and protection of his economic and social interests. No restrictions may be placed on the exercise of this right other than those prescribed by law and which are necessary in a democratic society in the interests of national security or public order or for the protection of the rights and freedoms of others; (b) The right of trade unions to establish national federations or confederations and the right of the latter to form or join international trade-union organizations; (c) The right of trade unions to function freely subject to no limitations other than those prescribed by law and which are necessary in a democratic society in the interests of national security or public order or for the protection of the rights and freedoms of others; (d) The right to strike, provided that it is exercised in conformity with the laws of the particular country. (Emphasis supplied)

ICCPR[84] is the key international treaty enshrining civil and political rights. It addresses the State’s traditional responsibilities for administering justice and maintaining the rule of law. The Human Rights Committee monitors how state parties comply with this treaty. States are required to submit reports to the Human Rights Committee within one year of becoming a party to the Covenant and whenever the Committee requests (usually every four years). The ICCPR has two Optional Protocols. The first Protocol recognizes the competence of the Human Rights Committee to receive and consider communications (human rights violations complaints) from individuals. The Second Protocol aims to abolish the death penalty. Applicable provisions are (emphasis supplied):[85]

Article 19 (Freedom of Expression):

1. Everyone shall have the right to hold opinions without interference.

2. Everyone shall have the right to freedom of expression; this right shall include freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through any other media of his choice.

3. The exercise of the rights provided for in paragraph 2 of this article carries with it special duties and responsibilities. It may therefore be subject to certain restrictions, but these shall only be such as are provided by law and are necessary:

(a) For respect of the rights or reputations of others;

(b) For the protection of national security or of public order (ordre public), or of public health or morals.

Article 22 (Freedom of Assembly):

The right of peaceful assembly shall be recognized. No restrictions may be placed on the exercise of this right other than those imposed in conformity with the law and which are necessary in a democratic society in the interests of national security or public safety, public order (ordre public), the protection of public health or morals or the protection of the rights and freedoms of others.

Article 22 (Freedom of Association):

1. Everyone shall have the right to freedom of association with others, including the right to form and join trade unions for the protection of his interests.

2. No restrictions may be placed on the exercise of this right other than those which are prescribed by law and which are necessary in a democratic society in the interests of national security or public safety, public order (ordre public), the protection of public health or morals or the protection of the rights and freedoms of others. This article shall not prevent the imposition of lawful restrictions on members of the armed forces and of the police in their exercise of this right.

Article 25 (Citizen Participation): Every citizen shall have the right and the opportunity, without any of the distinctions mentioned in article 2 and without unreasonable restrictions:

(a) To take part in the conduct of public affairs, directly or through freely chosen representatives;

(b) To vote and to be elected at genuine periodic elections which shall be by universal and equal suffrage and shall be held by secret ballot, guaranteeing the free expression of the will of the electors;

(c) To have access, on general terms of equality, to public service in his country.

International Convention on the Elimination of All Forms of Racial Discrimination (ICERD):[86] The United Nations General Assembly resolved to adopt ICERD to eliminate racial discrimination in all its forms and manifestations in the enjoyment of fundamental freedoms in all fields of civil, economic, political, social and cultural life.[87] The Committee on the Elimination of Racial Discrimination is the body responsible for monitoring the implementation of the Convention by the states parties.

Article 5 (Enjoyment of Human Rights): In compliance with the fundamental obligations laid down in article 2 of this Convention, States Parties undertake to prohibit and to eliminate racial discrimination in all its forms and to guarantee the right of everyone, without distinction as to race, color, or national or ethnic origin, to equality before the law, notably in the enjoyment of the following rights:

………… (d) Other civil rights, in particular:

 (viii) The right to freedom of opinion and expression;

(ix) The right to freedom of peaceful assembly and association;

(e) Economic, social and cultural rights, in particular:

(i) The rights to work, to free choice of employment, to just and favorable conditions of work, to protection against unemployment, to equal pay for equal work, to just and favorable

remuneration;

(ii) The right to form and join trade unions;

Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW):[88]

The CEDAW provides the basis for realizing equality between women and men through ensuring women’s equal access to, and equal opportunities in, political and public life as well as education, health, and employment. States parties agree to take all appropriate measures, including legislation and temporary special measures, so that women can enjoy all their human rights and fundamental freedoms. The Committee on the Elimination of Discrimination Against Women is the body responsible for monitoring the implementation of the Convention by the States parties.

Article 7 (Participation of Women): States Parties shall take all appropriate measures to eliminate discrimination against women in the political and public life of the country and, in particular, shall ensure to women, on equal terms with men, the right:

………….

(c) To participate in non-governmental organizations and associations concerned with the public and political life of the country.

Convention on the Rights of the Child (CRC):[89] The CRC comprises principles for the implementation of the rights of the child. The Convention includes the principle of non-discrimination and ensuring equal opportunity. In addition, decisions taken by the States must give prime consideration to the best interests of children. It also covers the right to life, survival, and development, and the right to freedom of expression and opinion. The Committee on the Rights of the Child is responsible for monitoring the implementation of the Convention by the States Parties.[90]

Article 15 (Freedom of Association and Assembly)

1. States Parties recognize the rights of the child to freedom of association and to freedom of peaceful assembly.

2. No restrictions may be placed on the exercise of these rights other than those imposed in conformity with the law and which are necessary in a democratic society in the interests of national security or public safety, public order (ordre public), the protection of public health or morals or the protection of the rights and freedoms of others.

ILO Declaration on Fundamental Principles and Rights at Work:[91] The ILO Declaration commits Member States to respect and promote principles and rights in four categories, whether or not they have ratified the relevant Conventions. These categories are freedom of association and the effective recognition of the right to collective bargaining, the elimination of forced or compulsory labor, the abolition of child labor, and the elimination of discrimination in respect of employment and occupation.

Article 2 (Freedom of Association): [The International Labor Conference] Declares that all Members, even if they have not ratified the Conventions in question, have an obligation arising from the very fact of membership in the Organization to respect, to promote and to realize, in good faith and in accordance with the Constitution, the principles concerning the fundamental rights which are the subject of those Conventions, namely:

(a) freedom of association and the effective recognition of the right to collective bargaining;

(b) the elimination of all forms of forced or compulsory labor;

 (c) the effective abolition of child labor; and

(d) the elimination of discrimination in respect of employment and occupation.

3. Current Practices to Control NGO Activities in Cambodia

Notification No. 474 issued by the Ministry of Interior on July 6, 1994, related to “the Installation of Name Board, Registration of Head Office, and Implementation of Activities of Associations.”

However, the MoI has one office that is responsible for the administration of NGOs/Associations. Both NGOs and Associations must complete the same application form and both are subject to Notification No. 474. But international NGOs/Associations do not register at the MoI; the Ministry of Foreign Affairs and International Cooperation handles their registration.

So far, some NGOs/Associations have faced challenges related to the registration process and activities implementation because some of them were established before Notification No. 474 of 1994 (for example, KID, ADHOC, and LICADHO were established in 1991 and 1992). These NGOs have generally been required to re-register at the MoI in accordance with the requirements fixed by MoI.

On the other hand, even NGOs/Associations that have been registered, both at the Council of Ministers and at the Ministry of Interior, need to ask for permission from the local authorities prior to their project implementation. This means that permission from the Governors of Province, District and the Chief of Commune are a precondition for starting every activity, including public forums, meetings, trainings, and so on, within the respective territory or the village, without any legally enacted written regulatory requirement for such prior approval.

3.1 Registration of Local NGOs

Although no specific legislation currently governs the activities of NGOs/CSOs in Cambodia, the MoI has introduced regulatory requirements governing registration that organizations are expected to comply with.

Under the notification of MoI No. 474, all NGOs must have the following documents in order to register at MoI office:

To form an NGO/Association, the founders shall process their registration at the Office for NGO/Association Administration, which is part of the Department of Political Affairs of the General Department of Local Administration within the Ministry of Interior.

a) Compulsory Requirements Determined by the MoI

The Office for NGO/Association Administration within the MoI requires any persons who would like to process the establishment and registration to buy a folder of forms (discussed below). Those documents prescribe some further supporting documents to be submitted with a request for registration, such as Copy of ID card or Birth Certificate, original statute of NGO/Association, and Organizational Chart.

a)1 MoI’s Form

The MoI provides the representative of an NGO/Association one set of forms which is composed of the following:

  1. Application Form: The application form has two pages, and it must be completed by the founder of the NGO/Association. The Application Form is sealed by a postage stamp and Political Affaire Department’s stamp. It can be inferred from this that the form will not be valid if the applicant makes a photocopy and does not use the blue-sealed form. Usually the applicant needs to make five photocopies of all documents submitted as part of the application process in order to process[93] them with local authorities in three levels (Commune/Sangkat, District/Khan/Municipality, and Province/Capital).
  2. MoI’s Notification Letter related to “the Installation of Name Board, Registration of Head Office, and Implementation of Activities of Associations” issued on July 6, 1994, needs to be filed along with other documents. The main purpose appears to be to enable the applicants to pledge that they will respect the provisions set forth by the Notification before requesting registration. This Notification is only one page in Khmer.
  3. CV forms of the Director of NGO/Association and other leaders, all of whom must be more than 18 years old. The MoI provides four pages of CV format stamped on each page, which at least two[94] people must fill out (one person needs to fill out two copies of CV formats). The CV forms need to have a current 4 x 6 centimeter photograph attached.
  4. Copy of ID card or Birth Certificate of applicants who submit their CV.
  5. Other administrative documents: In fact, the form fails to indicate what kind of specific documents needs to be attached with the forms. It is just required that the documents that will be attached with the MoI’s forms, if available.

The above documents must be signed by the Director of the NGO/Association.

In addition to the documents included in the MoI’s set of forms, the applicants must also submit the following documents:

a)2 Statute of NGO/Association:

There is not any standard format for the statute for an NGO or Association.

The statute of an NGO/Association[95] needs to provide:

  1. The name (full name and acronym) and logo of the NGO/Association. The name shall have meaning in Khmer language and shall not overlap with the names of other NGOs/Associations or political parties.
  2. Goal and objective of the NGO/Association.
  3. Rules related to hiring, terminating, and firing of members or personnel.
  4. Rights and duties of members or personnel.
  5. Structure, roles, duties, organization, and functioning of management bodies.
  6. Mandate, roles, and duties of the Director and other officers.
  7. Rules related to hiring, ending, firing, moving, and demoting the Director and other officers.
  8. Sources of funding and properties.
  9. Ordinary and extraordinary meetings of management bodies.
  10. Rules related to dissolution and division of the properties of the NGO/Association.

In addition, it is also required that the Statute prescribe further information related to the following:

  1. Quorum required for leadership meetings and juridical status of the decision adopted after the meeting.
  2. Rules related to administering and dividing funds and properties.
  3. Rules related to coalition, revision, and amendment of the Statute.

a)3 Organizational Chart of NGO/Association

It is understood by applicants that the applicant must submit the structure or organizational chart of the NGO/Association, which should show at least three members who currently work for the concerned organization, and that the three members should reflect the organization’s Presidency, Administration Section, and Finance Section.

The MoI requires two original copies of the organizational chart to be attached to the forms.

a) 3.1 Head Office and Other Relevant Requirements

The existence of a head office is a precondition for the registration process of every NGO/Association. Authentic documents related to the office of the NGO/Association are required before MoI will grant permission for registration and project implementation.

The specification letter[96] from local authorities (i.e., Chief of Commune/Sangkat, then Governor of District/Khan/Municipality, and Governor of Capital/Province) is also important. As set forth in the application form, this specification letter must be confirmed on documents related to the head office of the NGO/Association.

In practice, before requesting a specification from local authorities, the founders of the NGO/Association must provide a clear address of the organization according to the location map (authenticated by Commune/Sangkat), two photographs of the head office, and two photographs of the founders (at least five members). In addition, if the NGO/Association is located in the Capital, it must submit the Family Book of the house owner.

If a house is rented for use as the head office of NGO/Association, the following documents are required:

- Lease Agreement

- Permission Letter from the house owner granting his/her permission that the house is used as the head office.

- Other documents such as Family Book of the house owner, receipts of electricity, water, gas, etc.

In reality, both the application form and other supporting documents must be submitted to local authorities to be reviewed from the lower level up to the capital/provincial level.

a) 3.2 Optional Items

Neither the Internal Regulations nor the Stamp of the NGO/Association is a compulsory requirement for registry with MoI. However, internal rules need to be developed in accordance with the Labor Law of the Kingdom of Cambodia, and the stamp needs to be 34 millimeters in size with blue ink as set forth in the MoI’s letter No. 068 dated February 4, 1994.

b) The Functioning and Dissolution of NGO/Association

If any registered NGO/Association wishes to change its name, activities, office, or director, or to amend its statute, a written notification needs to be addressed to the MoI with new revised documents.

To expand its branch offices or to implement project activities within a new territory of capital/province/municipality in Cambodia, a written notification must be prepared by the NGO/Association and addressed to the Governor of that area according to the Prakas of Registration, Statute, and Working Schedule of Projects/Programs.

During its mandate, a registered NGO/Association will have the same status as other private institutions with the authority to implement its project activities, sign contracts, recruit personnel, maintain a bank account, and so on.

3.2 Registration of International Organization

Since 1979, all international NGOs have applied for registration at the NGOs Bureau of the Department of International Organization at Ministry of Foreign Affair (MFA). International NGOs were required to write letters requesting approval to operate in the country to a relevant ministry, attaching documents with the following information:

- Organization philosophy

- Program of activities

- Location of operation project

- Duration of program

- Number of international and local staff

- Source and amount of funding

- Personal history of the founder

With these documents, the organization could apply to MFA for registration. MFA’s department of international organizations then submitted the application to Council of Ministers (COM) for its approval. After COM approval, the department of international organizations prepared an agreement document to be signed by country representative of the NGO and by the Under-Secretary of State.

The main terms of this agreement were the following:

- The government will authorize the international NGO to employ Cambodians and foreign personnel.

- The government will facilitate work permits or visas for foreign personnel or visitors.

- MFA will act as the administrative counterpart of the NGO on behalf of the government.

- The NGO will report its plans and activities.

After signing the agreement, the International NGO must present it to the relevant ministry before commencing activities.

Part II- Provisions That Future Cambodian NGOs Law Should Include

The Cambodian NGOs Law shall be in accordance with the constitution and international principles which Cambodia ratified and is a member state of. Chapter One discussed some existing regulations applicable to juridical persons. As pointed out there, the majority of regulations are contained in the civil and criminal codes that cover substantive matters and also punish juridical persons that act unlawfully.

Governing principles contained in international instruments that Cambodia has ratified as a member state also play an important role in the regulation and protection of activities of juridical persons’ activity. Since existing laws and transitional rules cover NGOs’ activities, it appears unnecessary for the government to proceed to enact a new law to control juridical persons, especially nongovernment organizations. In interviews, some directors of local NGOs in four provinces said that it is not the time to enact a comprehensive NGO law, because the judicial system in Cambodia is so weak and is biased toward the powerful and the rich. They suggested that Cambodia already has laws that affect NGOs and protect the public. The government should simply implement those laws fairly and not enact a new law in the absence of a sound judicial system to deal with appeals.

However, the fact remains that the legal framework governing NGOs should be more protective of NGO activities and should follow the concepts of the Cambodian constitution and international norms.

1 Definition of NGOs

In practice, an NGO or Association is considered a kind of charitable institution with specific visions, goals, and objectives related to acting in the social interest and not intended to generate and distribute profits.

The World Bank defines NGOs[97] as “private organizations that pursue activities to relieve suffering, promote the interests of the poor, protect the environment, provide basic social services, or undertake community development.” (Operational Directive 14.70) In wider usage, the term NGO can be applied to any nonprofit organization which is independent from government. NGOs are typically value-based organizations which depend, in whole or in part, on charitable donations and voluntary service. It also uses the term civil society to refer to the wide array of nongovernmental and not-for-profit organizations that have a presence in public life, expressing the interests and values of their members or others, based on ethical, cultural, political, scientific, religious, or philanthropic considerations.

The Asia Development Bank[98] defined “nongovernment organization” as an organization (i) not based in government; and (ii) not created to earn profit. While this broad definition of an NGO is correct semantically, it presents a problem in that it embraces a large number and wide range of organizations that structurally and functionally are unrelated. This broad definition of NGO refers more to what an organization is not rather than to what it is, and can be applied to many organizations.

The European Union definition of NGO is based on the characteristics below:[99]

NGOs are not self-serving in aims and related values. Their aim is to act in the public arena at large, on concerns and issues related to the well-being of people, specific groups of people, or society as a whole. They are not pursuing the commercial or professional interests of their members.

Community-Based Organizations (CBOs)[100] are also referred to as grassroots organizations or peoples’ organizations, as distinct in nature and purpose from other NGOs. While national and international organizations are “intermediary” NGOs which are formed to serve others, CBOs are normally “membership” organizations made up of a group of individuals who have joined together to further their own interests (e.g.: women’s groups, credit circles, youth clubs, cooperatives, and farmer associations). In the context of Bank-financed activities, national or international NGOs are normally contracted to deliver services, design projects, or conduct research. CBOs are more likely to be the recipients of project goods and services. In projects which promote participatory development, grassroots organizations play the key function of providing an institutional framework for beneficiary participation. CBOs might, for example be consulted during design to ensure that project goals reflect beneficiary interests, undertake the implementation of community-level project components, or receive funds to design and implement sub-projects. Many national and international NGOs work in partnership with CBOs, either channeling development resources to them or providing them with services or technical assistance.

In the Cambodia context, CBOs are formed by villagers or community members who want to protect their own interest. Sometimes, they have no specific management team or structure, but rather, members distribute their own money to support activity in their community. There are many types of CBOs, such as youth or women’s groups, saving groups, forest or fisheries communities, associations to restore irrigation and water used, and the like. If the government requires those CBOs to register, they will face overwhelming problems of management, governance, and organizational form to comply with laws and regulations, because in practice their level of consolidation is weak.

CBOs should be excluded from any comprehensive NGO law because these groups can be formed unexpectedly, to meet and deal with immediate community problems or to advocate on behalf of the community. If registration is needed, then their activities are likely to become illegal, because they will be unable to comply fully with legal requirements and will lead the community members to rely solely on their leader and therefore not strengthen and consolidate the community itself.

2 Registrations

The purpose of registration is for an organization to gain “legal entity” status from which it acquires benefits, including legal protection and certain waivers, and for which it must fulfill certain obligations. Registration must not be an impediment to the exercise of freedom of association and rights to participate in political, economic, social, and cultural life as enshrined in the Constitution of Cambodia.

It is widely recognized that the freedom of association includes the right to associate informally, that is, as a group lacking legal personality. Freedom of association cannot be made dependent on registration or legal person status. That NGOs may be formed as legal entities does not mean they are required to form legal entities in order to exercise their freedom of association. On the contrary, freedom of association guarantees are implicated when a gathering has been formed with the object of pursuing certain aims and has a degree of stability and thus some kind of institutional (though not formal) structure. National law can in no way result in banning informal associations on the sole ground of their not having legal personality.

2.1 Right to Seek and Obtain Legal Status

In order to meet its mission goals most effectively, individuals may seek legal personality (or legal entity status) for organizations they form. It is through legal personality that, in many countries, NGOs are able to act not merely as an individual or group of individuals, but with the advantages that legal personality may afford (e.g., ability to enter contracts, to conclude transactions for goods and services, to hire staff, to open a bank account, etc.). It is well accepted under international law that the state should enable NGOs to obtain legal entity status. Article 22 of the ICCPR would have little meaning if individuals were unable to form NGOs and also obtain legal entity status.

In terms of the available procedures for legal recognition, some countries have adopted systems of “declaration” or “notification” whereby an organization is considered a legal entity as soon as it has notified the relevant administration of its existence by providing basic information. Where states employ a registration system, it is their responsibility to ensure that the registration process is truly accessible, with clear, speedy, apolitical, and inexpensive procedures in place. The designated registration authority should be guided by objective standards and restricted from arbitrary decision-making.[101]

2.2 Duration of Registration

Some countries impose specific time limits on the government approval process. The processes of NGO registration in China and Taiwan specify a thirty-day limit, and Korea holds to a twenty-day limit. In the Philippines, a twenty-four-hour “express lane” is available for swift NGO registration with the Securities and Exchange Commission, one part of a required two-step procedure.[102] Such time limits prevent officials from effectively denying registration through delay. In Indonesia, foundations obtain legal status by filing a brief notarized document. Social organizations, however, must register with the government and are subject to general supervision by the Ministry of Home Affairs, with technical supervision by the relevant line agency. Japan and Korea follow a single-step registration system. In those countries (Japan and Korea) if, NGOs want to register, they must obtain approval from the ministry of other government any that has jurisdiction over the proposed purposes and activities of the NGO.[103] Registration in Australia never requires more than one step. Whether registration is required at all, and with what government agency, depends on the NGO’s legal form. The unincorporated association, which is not a legal entity, is not required to register; the charitable trust, an equitable relationship rather than a legal entity, is also not obligated to register.[104]

The draft law should specify clearly a period in which a registration application may be considered for approval, and also should provide for penalties for government officials who intentionally delay the registration process.

2.3 Registration Should Be Voluntary

A number of new framework laws and drafts require informal groups of persons to register as formal legal entities and prohibit them from conducting activities unless they do. By prohibiting any associational activities – even informal activities, such as a group of neighbors meeting weekly to discuss political events – without prior registration, these laws clearly infringe upon the right to free association protected by the International Covenant on Civil and Political Rights and other conventions. Furthermore, mandatory registration is often used by repressive governments as a tool to crack down on individuals and organizations speaking out against government policies – as in Belarus, where the government used a requirement prohibiting activities by unregistered associations to fine or arrest dozens of civic activists in 2004.[105]

If the Cambodian draft NGO law makes registration mandatory for NGOs, it thereby violates international legal norms and Cambodian’s own Constitution. It is well recognized under international law that freedom of association includes the right to associate informally—that is, as a group lacking legal personality. Freedom of association cannot be made dependent on registration or legal person status.

2.4 NGOs Should Not Be Required to Re-Register

 Comparing requirements for NGOs with those applicable to private companies, in principle there is no good reason to require to re-registration of an NGO. For example, as a practical matter, re-registration may be difficult for NGOs that criticize the government. The previous license constitutes a discretionary probation period if the NGO fails to comply with government’s direction, preventing ultimate registration. Moreover, it is said that the government requires local NGOs to re-register every five years and international NGOs every three years.

Provisions like this, which impose potentially time-consuming bureaucratic hurdles, can discourage groups from ever applying to register in the first place – preventing the emergence or consolidation of a strong and independent civil society. An instructive example comes from a study of thirty NGOs attempting to register in Egypt, where the Law on Non-Governmental Organizations creates a difficult and highly bureaucratic registration system. Of the thirty, only seven had successfully registered. Five were fighting rejections in court, and the remaining eighteen had simply given up, choosing to form using alternative legal structures or simply to disband. Finally, some framework laws include provisions that require registered NGOs to re-register once a year or once every two years, giving government officials repeated opportunities to deny disfavored groups the right to operate.

3 Membership

Two kinds of restrictions are encountered in practice in some states: firstly, on establishment by foreign nationals, and, secondly, on establishment by legal entities. There are no grounds for these restrictions. The question of the minimum number of people needed to establish an NGO was discussed at length during the travaux préparatoires,[106] since this number varies under national law. In some states one person is enough, whereas in others the law sets a higher threshold, which may be two, three, or five people, or even more. In the end, the participants decided to draw a distinction between informal organizations and those wishing to acquire legal personality. In the first case, two people should suffice to establish a membership-based NGO, whereas a greater minimum number of members may be required before legal personality can be granted. In that event, the figure should not be so large as to discourage the actual establishment.

In principle, any person or group of persons should be free to establish an NGO.[107] Membership of an NGO, where this is possible, must be voluntary and no person should therefore be required to join any NGO other than in the case of bodies established by law to regulate a profession in states which treat them as NGOs. The law should not unjustifiably restrict the ability of any person, natural or legal, to join membership-based NGOs. The ability of someone to join a particular NGO should be determined primarily by its statutes, and should not be influenced by any unjustified discrimination.

The Cambodian NGO Law should not require a large number of members in order to establish an NGO, because, in common international practice a juridical person can be formed by as few as two people, exercising their freedom of association.

 4 Activities

The Universal Declaration of Human Rights, which Cambodia has incorporated in its constitution, guarantees the right to freedom of association. The International Covenant on Civil and Political Rights, to which Cambodia is a party, also guarantees this right and elaborates on it further: “1. Everyone shall have the right to freedom of association with others, including the right to form and join trade unions for the protection of his interests. 2. No restrictions may be placed on the exercise of this right other than those which are prescribed by law and which are necessary in a democratic society in the interests of national security or public safety, public order (ordre public), the protection of public health or morals or the protection of the rights and freedoms of others.”

NGO law should not in any way curtail the Cambodian people’s “right to participate actively in the political, economic, social and cultural life of the nation,” a right that is guaranteed and protected under Article 35 of Constitution.

5 Dissolution of NGOs (Should Comply with the Provisions of the Civil Code)

There are two types of dissolution of NGOs:

5.1 Voluntary Dissolution

The ground for voluntary dissolution is often not specified by law. The emphasis is instead on the dissolution procedure provided by the NGO’s internal rules. In most countries in the region, the charter or other governing document of the NGO must set forth the procedure for voluntary dissolution, addressing assets, the authorizing vote by membership or governing body, and the filing of required papers with the appropriate government agency.

5.2 Involuntary Dissolution

The grounds are explicit and include engaging in activities outside the purposes of the NGO, a change of the organizational purpose, the expiration of the initial term of existence, misuse or nonuse of the corporation franchise, inability to pay debts, and violation of the terms and conditions of registration.

The pronouncement of an NGO as illegal must be exercised by the court, as a constitutional matter, not by the administration (Ministry of Interior or other government agency).

The dissolution or postponement of NGOs’ activities should not occur until the court judgment is final. The Court may issue an injunction against certain activities that are suspected to be illegal but cannot dissolve it when legal recourse is still available.

If the draft insists on having the Ministry of Interior make the decision on the “legality,” this decision must be subject to judicial review and the dissolution cannot take effect until judicial recourse is exhausted. The government must provide specific reasons to dissolve an NGO institution, based on specific provisions of the Civil Code, as discussed in point F.1.2 above.

6 Funding

Funding arrangements should be a matter solely between donors and recipients, subject only to the criminal and civil sanctions applied to anyone else. However, government and the public are entitled to a yearly financial statement from NGOs, particularly when they have received any financial support from the government (grants, contracts, tax benefits) or from the public, through public donations.

If the governments require prior approval for an NGO to receive foreign funds, it may limit the independence of civil society. This type of restriction raises concerns that the government will exercise its discretion over the approval process to limit funding to classes of NGOs disfavored by government, a burden that often falls most heavily on advocacy or human rights groups. Prior approval requirements can be used to starve certain NGOs of resources, forcing their closures or suspension of activities. Alternately, they may chill NGO expression, as groups avoid controversial positions that may cause government officials to terminate their funding sources.[108]

Within broad parameters, NGOs should have the right to seek and secure funding from any and all legal sources. Closely linked with free contact and communication is the right to seek and secure funding from legal sources. Legal sources should include individuals and businesses, other civil society actors and international organizations, as well as local, national, and foreign governments. Just as cutting off contact and communication for NGOs is to strike at their existence, so restrictions on resources pose a direct threat to their ability to operate. Restrictions on the receipt of funding, and especially on the receipt of foreign funding, have grown increasingly common, but as this section will demonstrate, such impediments violate the spirit and the developing trends within international law.

Regardless of the justification for these restrictions on foreign funding, the effect on the operations of NGOs of all kinds can be detrimental. Particularly in countries where local philanthropy is underdeveloped and government funding is not substantial, many groups could be forced to cease operations if denied access to funding sources from beyond their borders.

The legal framework governing the civil society sector should not place any impediments on the flow of funding between donor and donee. On the contrary, the government should undertake the obligation to protect nonprofit organizations in order to develop Cambodia.

7 Tax Exemptions

Income shall be exempted from taxation—including business income—so long as the income is used to further the purpose of nonprofit organization. Gifts and contributions to nonprofit organizations are generally exempt from tax. Business income should not be taxed at all if it is used to further the purposes of the nonprofit organization. In order for nonprofit organizations to exist and support people for a long time, they may do business but not distribute profits to individual officers, directors, or personnel (aside from payment of reasonable salaries for employees). For instance, Singapore is the only country in the region with an unrelated business income tax law—that is, a law that exempts business income from taxation only if it is generated by an activity related to the purpose of nonprofit organization.[109]

Cambodia shall retain concept of tax exemption for nonprofit organization contained in the Tax Code since 1993.

8 Bylaws

As the fundamental document for the operation of a particular NGO, NGO bylaws (also sometimes referred to as “statutes”) must be determined by the NGO. Bylaws are an internal document, a set of rules that enables each organization to conduct its affairs. It is important that they be written clearly and in language that is easily understood by all organization stakeholders. This document is frequently necessary for the registration of an NGO with national and public authorities.

If the Law includes provisions governing bylaws, it must set only minimum requirements to ensure sufficiency of organizational governance. It must leave flexibility for each organization to adapt to its particular conditions. NGOs must have bylaws that set basic rules with respect to the organization’s objectives, governance, and use of assets. Clear basic rules help to ensure that the organization’s highest governing body can provide effective oversight of the organization’s affairs.

9 Reporting

Reporting requirements have a twofold purpose. On the one hand, they enable the government to ensure that charities continue to merit the various advantages that they have received because of their publicly beneficial activities. But on the other, they help to guarantee an effective market for contributions, one in which potential contributors have ready access to key facts about potential donees.[110] A primary purpose of this sort of public disclosure is to encourage self-regulation by charities. For example, given the reality that many other charities will be competing for the same donations, charities must think twice about how much they spend on officers’ salaries and other administrative expenses; even if these are not so egregious as to justify legal sanctions, they may make a charity an unattractive vehicle for philanthropy relative to one that directs resources toward its charitable purposes more efficiently.

In the United States, the reports are quite detailed, describing such aspects of the charity’s finances as its net asset position, sources of funding, revenue, and expenses. Among the other information to be disclosed is the compensation received by officers and directors, as well as by the organization’s five highest-paid employees and five highest-paid independent contractors; information about any political, lobbying, or unrelated business activities; a summary of the organization’s activities for the year; any unreported changes in the organization’s governing documents; and information about other affiliated taxable or tax-exempt entities.[111]

The draft law of NGOs requires all NGOs to report their activities to the Ministry of Interior every quarter. If an NGO has failed to submit two consecutive times, its activities may be suspended for a year. This requirement does not replace the NGO’s obligation to report to its donors directly on the use of funds they have provided. Moreover, an enforcement decision by the government should be appealable to court.

10 Obligation of the State to Permit Implementation of NGO Activities[112]

The state must guarantee that activities of NGOs are not impeded by national or local authorities without legal justification. For example, local authorities cannot, without good and proper cause as defined in the constitution and international covenants to which Cambodia is a signatory member, intervene in or prohibit a seminar or public forum organized by NGOs.

As noted above, international law has placed on states the obligation to ensure that the rights enshrined in international law (the Universal Declaration, ICCPR, etc.) are protected:

In light of this body of international law, the government is not only bound to refrain from interference with human rights and fundamental freedoms, but also has a positive duty to ensure respect for human rights and fundamental freedoms, including the freedoms of association and expression, among others. This duty includes an accompanying obligation to ensure that the legislative framework for civil society is appropriately enabling and that the necessary institutional mechanisms are in place to “ensure to all individuals” the recognized rights. An enabling legal framework will help create an appropriate environment for an NGO throughout its life-cycle. Necessary institutional mechanisms could include, among others, a police force to protect people against violations of their rights by state or non-state actors and an independent judiciary able to provide remedies.

11 Judicial Protection

In a state governed by the rule of law it is essential that NGOs should be entitled, in the same way as other legal entities, to challenge decisions affecting them in an independent court which has the capacity to review all aspects of their legality, to quash such decisions where appropriate, and to provide any consequential relief that might be required. Any act or decision affecting an NGO must be subject to the same administrative and judicial supervision as is generally applicable in the case of other legal entities. There should be no need for special provisions to this effect in legislation on NGOs.

When the government rejects the application for registration, NGOs must have the right to appeal to an independent adjudicatory body, in accordance with the Constitution. This means that the government decision is not final; the court has authority to review the administrative institution, and either uphold the government’s determination or to overturn it.

Conclusion

As discussed above, the Royal Government of Cambodia should respect and be consistent with the norms contained in international covenants and declarations upholding the freedom of association and individual rights to which Cambodia is a signatory and a member. Cambodia has existing laws which cover many NGOs activities; discussed in chapter 1 point 2, above. If the government genuinely intends to build a development partnership with the sector, any new legislation should be designed to strengthen and empower the sector, protect NGOs’ interests, and provide support to sustain the sector.

A few simple suggestions for improving the present regulatory regime:

Finally, any law affecting civil society drafted for Parliament’s consideration should be released for public scrutiny and consultation on its content.

Notes

[*]Ke Bunthoeurn was a Legal Enabling Environment Research Fellow at the International Center for Not-for-Profit Law (ICNL).

[4] Article 17:Upon taking and leaving offices, the following persons shall, in writing or electronic form, declare their assets and liabilities, regardless of whether those assets are inside or outside the country, and shall submit, in person, to Anti-corruption Unit: 1-Member of Senate……8-Leader of Civil Society.” For article 18, see footnote 73, page 21.

[5] Ted Nicholas, How to Form Your Own Corporation Without a Lawyer for Under $50 (1972), p. 61.

[7] http://www.knowledgerush.com/kr/encyclopedia/Trust/.

[8] United Nations Office of the High Commissioner for Human Rights (hereinafter OHCHR), Cambodia country office, (2008), Cambodian Human Rights Law, p. X.

[9] OHCHR , Cambodia Human Rights Law (2008), p. 306.

[10]J.E De Becker, “The Principles and Practice of The Civil Code of Japan,” hereinafter “J.E De Becker” (1921), p. 21.

[11] Bryan A. Garner, Black’s Law Dictionary (1999).

[12] Article 46(1) of CC.

[13] Article 46(1) of CC.

[14] Article 46(2-3) of CC.

[15] Article 50 of CC.

[16] Article 7(4) of Cambodian Counter terrorism Law, 2007.

[17] Article 47 of CC, name of nonprofit juristic person: “No entity other than an incorporated association or incorporated foundation may use the words ‘incorporated association‘ or ‘incorporated foundation‘ in their name. Limited liability incorporated associations and unlimited liability incorporated associations shall include in their name a statement that they are limited liability incorporated associations or unlimited liability incorporated associations as the case may be.

[18] Provisional disposition is stated in the code of civil procedure (CCP). The purpose of provisional disposition is defined in article 530 of CCP: “If there is an apprehension that execution will become impossible or extremely difficult by reason of alteration of the state of the property of the debtor in execution, or that significant damage or imminent risk will arise affecting the status of one of the parties in respect of the right in issue, a person wishing to preserve his or her rights may apply for preservative relief pursuant to the provisions of this Book 7.” And article 531(3): “Disposition establishing a provisional condition until a judgment becomes final and conclusive, where this is necessary in order to avoid significant damage or imminent risk [to the creditor] in relation to the right in dispute.”

[19] Article 50(3) of CC.

[20] Article 54(1) CC and see point C.1 above.

[21] Article 48(1) of CC.

[22] Article 48(2) of CC.

[23] Ministry of Justice, Note of Articles of Civil Code (book1-3), Cambodia (2009), p. 43.

[24] Article 50 (2) of CC.

[25] Article 55 of CC.

[26] Article 21 of labor law in 1997: “Every employer must make the declaration to the Ministry in Charge of Labor each time when hiring or dismissing a worker. This declaration must be made in writing within fifteen days at the latest after the date of hiring or dismissal. This period is extended to thirty days for agricultural enterprises. The declaration of hiring and dismissal is not applied to: Casual employment with a duration of less than thirty continuous days. Intermittent employment for which the actual length of employment does not exceed three months within twelve consecutive months.”

[27] Article 56(3) of CC.

[28] Article 60 of CC.

[29] Article 61 of CC.

[30] Article 65(3-c) of CC.

[31] Please see article 65(1) of CC.

[32] Article 65(2) of CC.

[33] Article 743-1 of CC.

[34] Article 748 of CC.

[35] J. E De Becker (1921), p. 37.

[36] Article 167 of criminal code.

[37] Article 24 of criminal code.

[38] Article 182 of criminal code.

[39] Article 168 of criminal code.

[40] Article 169 of criminal code .

[41] Please read point F.1 above.

[42] Article 176(1) of criminal code.

[43] Article 171 of criminal code.

[44] The penalty of expulsion from the public market places entails the banning from direct or indirect participating in all public transactions proposed by:

1. the State;

2. a territorial decentralized collectivity;

3. a public establishment;

4. an enterprise franchised or controlled by the State or by a territorial decentralized collectivity.

The penalty of expulsion may be either definitive or temporary for period of not more than 5 (five) years.

[45] The prohibition against a public campaign for saving funds means that when the court has found a juridical person guilty of committing fraud through its business, the court may prohibit its activity. Article 174 of the Criminal Code: “The prohibition from a public campaign for saving funds may be either definitive or temporary for a period of not more than 5 (five) years. The prohibition entails the banning for a legal entity from carrying out a campaign to place its exchangeable instruments at credit, financial institutions or stock exchange companies. It entails also the banning from any publicity.”

See also the Criminal Code of France, article 131-47: “Prohibition to make a public appeal for funds entails prohibition, for the sale of any type of security, to resort any banking institutions, financial establishments or stock market companies, or to any form of advertising.” http://www.legislationline.org/documents/section/criminal-codes.

[46] The prohibition against issuing exchangeable instruments may be either definitive or temporary for a period of not more than 5 (five) years. The same provision is applied to the issuance of checks.

[47] Please see note 46 above.

[48]The penalty of closing down an establishment entails the prohibition of operating in the premises where the offense was committed. The penalty may be either definitive or temporary for a period of not more than 5 (five) years.

[49] The prohibition against operating an establishment opened to the public or utilized by the public may be either definitive or temporary for a period of not more than 5 (five) years.

[50] At the time when the confiscation is definitive, the confiscated objects became the property of the State unless the specific provisions provide for different allocation. The State can proceed with selling or destroying the confiscated objects according to prescribed terms and conditions of selling of the property of the State.

The law can also provide for the destruction of certain objects. When the confiscated objects were not seized and thereby cannot be handed over, the convicted person must pay the value of that object. This value is determined by the court. As to the collection measure, it is carried out in the same manner as the physical imprisonment.

[51]The following objects may be subject of confiscation: any instruments, materials, or objects which have been used to commit the offense or have been intended to commit the offense; objects or funds with which the offense was carried out; incomes or properties earned by the offense; and utensils, materials, and movable objects at the place where offense was committed. However, the confiscation cannot be declared if such confiscation affects the rights of any third party.

[52] The penalty of posting the decision is carried out in the designated areas by the court for a period of time set by the court. The posting may not exceed 2 (two) months. The posting may be in full, by means of excerpt, or simply by making references thereto. The fees for the posting are the burdens of the convicted legal entity. In case of removal, concealment, or ripping up of the affixed posting, a new posting is conducted. The cost of re-posting is paid by the person who had carried out the act of removal, concealment, or ripping up. The penalty of broadcasting the decision by all means of audiovisual communications is carried out according to the modalities set out by the court. The broadcasting may not exceed 8 (eight) days. The broadcasting may be in full, by means of excerpt, or simply by making references thereto. The fees for the broadcasting are the burdens of the convicted legal entity.

[53] Article 391 (Definition of Breach of Trust) of Criminal Code.

[54] For example: KHKA was loaned a car by another company without charge, but the company put in condition of its contract that every 31 December the KHKA shall present the car at the company office. The due date arrives, the KHKA fails to present the car to the company, and therefore the company may file a complaint against KHKA on breach of trust.

[55] Article 167 (Penalties Imposed on Legal Entities ) and Article 168 (Additional Penalties Applicable to Legal Entities) of the criminal code.

[56] Article 393 (Breach of Special Trust by a Governor or other Persons): All governors or supervisors of legal entities of corporation with limited responsibilities or funding legal entities or persons who are assigned by a court to act on its behalf, or employees who are authorized by a legal entity who breach the trust for their own benefit or the benefit of the third party or with the purpose of damaging the legal entity and resulting in damage of property of the legal entity, are punishable by an imprisonment from 2 (two) years to 5 (five) years and a fine from 4,000,000 (four million) Riels to 10,000,000 (ten million) Riels. Provisions of Paragraph 1 above are also applicable to the cases where liquidators of legal entities of a corporation with limited responsibilities for funding legal entities or persons who are assigned by a court to act on behalf of the liquidators commit an act as mentioned in Paragraph 1 above and damage the properties of the legal entities. The attempt to commit offenses as mentioned Paragraphs 1 and 2 above is punished by the same penalties.

[57] See also Article 409; Article 404: Money laundering is an act of providing, by any means, the false justifications to conceal the direct or indirect benefits of a felony or a misdemeanor. The act of lending support to further its operational transaction for investing, concealing, or converting the direct or indirect benefits of a felony or a misdemeanor is also considered as money laundering.

[58] Article 18 of criminal code.

[59] Article 584 of criminal code.

[60] Active Influential Deal: an unauthorised person who directly or indirectly delivers present or gift, makes promise or give interests to a civil servant or a citizen entrusted with public mandates through an election in order to obtain from a State institution due to real or assumed influence a job, a contract, a distinction or other preferences.

[61] Article 625: Legal entities are punished by a monetary fine from 10,000,000 (ten million) Riels to 50,000,000 (fifty million) Riels and one or more additional penalties as follows:

1. dissolution according to formalities determined in Article 170 (Dissolution and Liquidation of a Legal Entity);

2. placement under the court surveillance according to modalities determined by Article 171 (Placement Under the Court Surveillance);

3. prohibition against operating one or more activities according to modalities determined by Article 172 (Prohibition from Operating Activities);

4. expulsion from public market places according to modalities determined in Article 173 (Expulsion from Public Market Places);

5. prohibition against conducting public campaign for fund saving according to modalities determined in Article 174 (Prohibition Against Public Campaign for Fund Saving);

6. confiscation of objects or funds which were the subjects of offenses according to modalities determined in Article 178 (Confiscation of Ownership, Sale and Destruction of Confiscated Objects) and Article 179 (Confiscation and Rights of the Third Parties);

7. confiscation of incomes and properties earned from offenses according to formalities determined in Article 178 (Confiscation of Ownership, Sale and Destruction of Confiscated Objects) and Article 179 (Confiscation and Rights of the Third Party);

8. posting decision on punishment according to modalities determined by Article 180 (Posting Decision);

9. publication of decision on punishment in newspapers or broadcasting on all means of audiovisual communications according to modalities determined by Article 181 (Broadcasting Decision by All Means of Audiovisual Communications).

Article 605 (Delivering of Bribes): It is punishable by an imprisonment from 5 (five) years to 10 (ten) years for an unauthorized person who directly or indirectly delivers a present or gift, makes a promise or gives interests to a civil servant or a citizen entrusted with public mandates through an election so that the latter:

1. perform any act of his/her functions or facilitate any thing using his/her functions;

2. does not perform any act of his/her functions or facilitate any thing using his/her functions;

Article 606 (Active Influential Deal): It is punishable by an imprisonment from 2 (two) years to 5 (five) years and a fine from 4,000,000 (four million) Riels to 10,000,000 (ten million) Riels for an unauthorized person who directly or indirectly delivers a present or gift, makes a promise, or gives interests to a civil servant or a citizen entrusted with public mandates through an election in order to obtain from a State institution due to real or assumed influence a job, a contract, a distinction, or other preferences.

Article 607 (Intimidation): It is punishable by an imprisonment from 2 (two) years to 5 (five) years and a fine from 4,000,000 (four million) Riels to 10,000,000 (ten million) Riels any intimidation against a civil servant or a citizen entrusted with public mandates through an election so that:

1. the public servant or elected citizen performs any act of his/her function;

2. the public servant or elected citizen does not perform any act of his/her function;

3. the public servant or elected citizen abuses his/her real or assumed influence, in order to obtain employment, a contract, a distinction, or any other preferences.

[62] Article 638 (Bribes Given to an Authorized Person to Issue Forged Document): It is punishable by an imprisonment from 1 (one) year to 3 (three) years and a fine from 2,000,000 (two million) Riels to 6,000,000 (six million) Riels for any act of giving any donation, gift, present, promise, or any interest to any person to issue an attestation or a certificate describing a state of affairs which is actually not true.

[63] Article 640 (Bribes Given to a Member of a Health Organization to Issue a Forged Certificate): It is punishable by an imprisonment from 1 (one) year to 3 (three) years and a fine from 2,000,000 (two million) Riels to 6,000,000 (six million) Riels for an act of giving a donation, gift, present, promise, or any interest to any medical staff or a person who is a member of a health committee in order to issue an attestation or a certificate describing a state of affairs which is actually not true.

[64] Article 1 of anti-corruption law

[65] Result of my survey related to how to collaborate between NGOs and governments, made in 2010.

[66] “For the purposes of this Convention: (a) “Public official” shall mean: (i) any person holding a legislative, executive, administrative or judicial office of a State Party, whether appointed or elected, whether permanent or temporary, whether paid or unpaid, irrespective of that person’s seniority; (ii) any other person who performs a public function, including for a public agency or public enterprise, or provides a public service, as defined in the domestic law of the State Party and as applied in the pertinent area of law of that State Party; (iii) any other person defined as a ‘public official’ in the domestic law of a State Party. However, for the purpose of some specific measures contained in chapter II of this Convention, ‘public official‘ may mean any person who performs a public function or provides a public service as defined in the domestic law of the State Party and as applied in the pertinent area of law of that State Party. For more information, please visit the website: http://www.unodc.org/documents/treaties/UNCAC/Publications/Convention/08-50026_E.pdf

[67] Please read article 29 (2) of anti-corruption law.

[68] Article 33 of anti-corruption law.

[69] Article 46 of anti-corruption law (accessory penalty applicable to certain legal entities).

[70] See note number 46 above.

[71] Please read article 17-7 of anti-corruption law.

[72] Civil society was defined in article 4 point 8 of the anti-corruption law: community or group of persons created for the sake of protecting the economic, socio-economic, political, science, cultural, and religious benefits, namely association, NGOs and political party.

[73] Article 18 (Regime of Declaration of Assets and Liabilities): Officials listed in Article 17 (Persons required to declare assets and liabilities) shall declare their assets and liabilities every two years, in early January and no later than the thirty-first of January. The declaration of assets and liabilities shall be done within 30 days after taking office. The second declaration shall be made in January of the third year and the last declaration of assets and liabilities shall be made within 30 days before leaving the office. In case the declaration cannot be made before leaving the office due to removal from office, declaration shall be made within 30 days after leaving the office. Officials listed in Article 17 (Persons required to declare assets and liabilities), who are in office, shall declare their assets and liabilities first within 60 days after the anti-corruption institution is established as stipulated in Article 54 (The organization and functioning of National Council Against Corruption and Anti-Corruption Unit ) of this law. The formalities and procedures for declaration of assets and liabilities shall be determined by the decision of the Anti-Corruption Unit.

[74] Article 38 (punishment for not declaring assets and liabilities): Any person who does not declare their assets and liabilities or who improperly declares his or her assets in accordance with provisions stated in article 17 (people required to declare assets and debt), article 18 (regime of assets and debt declaration), and article 19 (other people required to declare assets and debt) of this law, shall be sentenced from one (1) month to one (1) year in prison and fined from one hundred thousand Riel (100,000) to two million Riel (2,000,000), and be forced to make an asset declaration to the Anti-Corruption Unit. In case of resisting the declaration, double punishment shall be applied. The Chairman of the Anti-Corruption Unit shall inform leaders of the civil society organization in writing before this article is enforced.

Article 13 (Duties of the Anti-Corruption Unit): The Anti-Corruption Unit shall perform the following duties:

- Implement law, orders and regulations (which are in force) related to corruption.

- Develop an anti-corruption action plan in accordance with the strategies and policy of the National Council Against Corruption.

- Direct the work of preventing and combating corruption.

- Monitor, investigate, check, and do research as well as propose measures related to corrupt practices in ministries, institutions, and public and private units, in conformity with the procedures in force.

- Receive and review all complaints on corruption and take action accordingly.

- Search, review, and compile the documents and information related to corruption.

- Keep absolute confidentiality of corruption-related information sources.

- Take necessary measures to keep corruption whistleblowers secure.

- Manage the system of assets and debt declaration as stipulated in this law.

- Conduct mass education and awareness with regard to the negative impact of corruption and encourage public participation in preventing and combating corruption.

- Prepare and propose an annual budget for the National Council Against Corruption and for the Anti-Corruption Unit.

- Answer verbally or in writing the questions raised by members of National Council Against Corruption or members of National Assembly.

- Provide work services to the National Council Against Corruption.

- Appoint, transfer, supervise, or propose the appointment or transfer of officials under the Anti-Corruption Unit.

- Cooperate with national, regional, and international organizations in order to combat cross-border corruption.

- Report all activities of the Anti-Corruption Unit to the National Council Against Corruption.

- Be empowered to warn suspects who initially fail to obey the laws and regulations in force in order to prevent corruption.

[75] Article 41(Defamation and disinformation): Defamation or disinformation complaints on corruption lodged with the Anti-Corruption Unit or judges, which lead to useless inquiry, shall be punishable by imprisonment from one (1) month to six (6) months and fine from one million Riel (1,000,000) to ten million Riel (10,000,000).

[76] Please read article 32 of anti-corruption law.

[77] OHCHR, Cambodia country office, (2008), Cambodian Human Rights Law, p. IV.

[78] Article 41 of Cambodian constitution.

[79] Article 42 of Cambodian constitution.

[80] See Office of the High Commissioner for Human Rights, United Nations Staff College Project, Human Rights:

A basic handbook for UN staff, United Nations (2000), p. 11. Available at http://www.unhchr.ch/html/menu6/handbook.pdf.

[81] Article 19 of UDHR.

[82] Article 23-4 of UDHR.

[83] Office of the High Commissioner for Human Rights: http://www2.ohchr.org/english/law/cescr.htm.

[85] Civil Society Watch Program, CIVICUS, Compendium of International Legal Instruments and Other Intergovernmental Commitments Concerning Core Civil Society Rights, edited by Mandeep Tiwana and Michael Rubin, and compiled by Robertto Wohlgenmuth J. (hereinafter Robertto Wohlgenmuth J.) (2010), p. 13; http://www.civicus.org/content/Compendium_Jan2010.pdf.

[90] Robertto Wohlgenmuth J. (2010), p. 22; http://www.civicus.org/content/Compendium_Jan2010.pdf.

[91] International Labor Organization: www.ilo.org. Standards and Fundamental Principles and Rights at Work: http://www.ilo.org/public/english/standards/ index.htm.

[93] Ask them to give the visa on the forms and sign them.

[94] A guideline received on 3/25/2009 requires at least three people.

[95] This statute must also be signed by the President of the NGO/Association.

[96] “Specification letter” refers to documents signed by the local authority to specify that the NGO is based at its address, and states that the NGO is helping and develop community.

[99] The Commission and Non-Governmental Organizations: Building a Stronger Partnership http://ec.europa.eu/civil_society/ngo/en/communication.pdf.

[101] According to International Center for Not for Profit Law (ICNL) and World Movement for Democracy (WMD), Defending Civil Society (February 2008), p. 29.

[102] Thomas Silk, Philanthropy and Law in Asia (hereinafter Thomas Silk) (1999), p. 23.

[103] Thomas Silk (1999), p. 18.

[104] Thomas Silk (1999), p. 19.

[105] Global trends in NGOs law: http://www.icnl.org/globaltrends/.

[106] Anonymous, International Law on Freedom of Association: http://www.pili.org/dmdocuments/enabling_one.pdf

[108] ICNL and WMD (February 2008) p. 35.

[109] Thomas Silk (1999), p. 25.

[110] W. Cole Durham, Jr., Brett G. Scharffs, and Michael W. Durham, An Introduction to the Law and Regulation of Non-Profit Organizations in the United States (Beijing, China, October 2004), p. 50.

[111] W. Cole Durham, Jr., Brett G. Scharffs, and Michael W. Durham (October 2004), p. 51.

[112] ICNL and WMD (February 2008), p. 38.

Works Cited

Cambodia Sources

External Sources

 
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