The International Journal
of Not-for-Profit Law

Volume 1, Issue 2, December 1998

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

Table of Contents

Letter from the Editor


Registration of Associations in Central and Eastern Europe and the Newly Indpendent States: A Survey
Rachel L. Holmes

The Case for Intermediate Sanctions
Milton Cerny

Voluntary Organizations in Europe: The European Convention on Human Rights
Erik Denters and Wino J.M. van Veen

Improving Civil Society in Hungary
Daniel Csanády

El Proyecto de Ley N. 4690/98 (Developing State - NGO Relations in Brazil)
Anna Cynthia Oliveira

NGO Legislation in Georgia
Vasha Salamadze


The Non-Profit Handbook (1997-1998 National Edition)
Reviewed by Karla Simon

Handbuch Stiftungen
Edited by Bertelsmann Stiftung

Case Notes

Trustees of Sahebzadi Oalia Kulsum Trust v Controller of Estate Duty [1998] 233 ITR 434

Revenue Commissioners v Sisters of Charity of the Incarnate Word

Gaudiya Mission v. Kamalaksha DAS Brahmachary

Country Reports

Asia Pacific:
Regional | Australia | China | India | Japan | Mongolia | Nepal | New Zealand | the Philippines | Thailand | Vietnam

Central and Eastern Europe:
Regional | Albania | Bosnia-Herzogovina | Bulgaria | Croatia | Czech Republic | Hungary | Latvia | Lithuania | Macedonia | Poland | Slovakia | Slovenia | Yugoslavia

Latin America and the Caribbean:
Argentina | Brazil | Ecuador | Puerto Rico | Venezuela

Middle East and North Africa:
Regional | Egypt | Jordan | Morocco

Newly Independent States:
Regional | Armenia | Azerbaijan | Belarus | Georgia | Kazakhstan | Kyrgyzstan | Moldova | Russia | Tajikistan | Turkmenistan | Ukraine | Uzbekistan

North America:
Canada | Mexico | the United States

Sub-Saharan Africa:
Regional | Ethiopia | Mauritius | South Africa

Western Europe:
Regional | England and United Kingdom | Finland | France | Germany | Republic of Ireland | Netherlands | Northern Ireland | Sweden | Turkey

International Developments:
UNESCO | Loccum Conference | Birmingham Conference

Self-Regulation Initiatives

United States - Overview of the Bishop Estate Controversy

United States - Maryland Association of Nonprofits Adopts "The Standards of Excellence"

International Grantmaking

Options for Increasing U.S. Support for Chinese Nonprofit Organizations
Robert A. Boisture

Grantmaking by Private Foundations in the International Arena
Thomas Chomicz

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Editorial Board

Subscription Information

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Draft Law No 4690/98

By Anna Cynthia Oliveira

This draft law is the result of the Civil Society Program for Alliance between the State and Civil Society financed by the IABD.

The objective of this draft law is to create a new and easier framework for public benefit entities.

1. Context of the 3rd sector in Brazil

Many problems arise within this context. The registries (Register of the Federal Tax Secretary or Register of TaxPayers) are not updated and not reliable. The legislation is outdated and inconsistent. The legal benefits are approached as a right. Churches, political parties, institutions for education and social assistance, trade unions and foundations created by political parties are exempt from all taxes. Any type of NGO is exempt from property tax. Finally, philanthropic organizations are exempt from paying social security. The problem is that the legislation does not define precisely which type of NGO should benefit from these fiscal advantages.

In order to solve this problem, requirements to enjoy the "rights" were established.

NGOs are not satisfied with State cooperation. Renovated and adapted agreements could be used to create modern Alliances.

2. Innovations in the Draft Law

The new legal regime is addressed to Public Benefit NGOs. New rules are established to obtain benefits. The draft law includes a definition of this type of organization. The following are excluded from this definition: political parties, cooperatives, hybrids of legal persons created by public legal entities, foundations created by political parties, MBOs health insurance, hospitals and private schools. Included are: advocacy NGOs, NGOs which promote economic development and fight poverty, NGOs which help build new socio-productive models, alternative systems for trade, employment, credit and production, and grant making foundation which provide grants for qualifying activities.

The Ministry of Justice is in charge of qualifying NGOs. It will archive all documents related to NGOs and these archives will be open to the public. There are few innovations with regard to controls. No regular reports are required, but any citizen can bring elements needing clarification to the Ministry of Justice. This can result in an investigation of the NGO. No involvement in party campaigns is allowed.

A new legal instrument is created: the "Term of Alliance" (Termino de Parceria). It officializes cooperation ties between an NGO and the State. The supervision and the physical and financial execution of Alliances will be the responsibility of government officials who are counterpart to the Alliance. In case of illegal action, the officers of an NGO can be considered "solidarily responsible" if they did not activate the control procedures.

3. Gaps which could lead to risks in the efficiency of the Draft Law

No new tax incentives were created. Therefore, no NGO that already benefits from the existing benefits is likely to abandon their old status in favor of the new one. Only entities that will be interested in the "Term of Alliance" will be interested in the new status. The principle of good competence is not mentioned to benefit from an alliance. Finally, elements of decentralization and concertation are lacking at the local level. The offices are always located in the relevant state capital, which is a problem for the application of the "Term of Alliance" at the national level.


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