The International Journal
of Not-for-Profit Law

Volume 1, Issue 3, March 1999

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

Table of Contents

Articles

Creative Uses of Program Related Investments
Milt Cerney

Redes y Redes de Redes
Miguel Angel Itriago Machado and Antonio L. Itriago Machado

The Katz Report - Finally a Reality
Sangoco

Recent Experiences with Re-Registering Foundations in the Czech Republic
Lenka Deverová and Petr Pajas

Canadian Developments
Arthur Drache

Creating an Enabling Environment for Private Philanthropy: the Role of Charity Law in Northern Ireland
Kerry O'Halloran

Establishing New Interactive Forms of Collaboration Between Non-Profit Organizations and Enterprises.- Competitive vs. Collaborative Relationships
Maria Beatriz Parodi Luna

Reflexionando sobre Consolidación de Organizaciones Cúpula de la Sociedad Civil en Venezuela
Charo Méndez

Reviews

Studies of – and prospects for the revision of the tax laws governing non profit organizations 
By Fondazione Italiano per il Voluntario

Protecting Human Rights Defenders - Analysis of the newly adopted Declaration on Human Rights Defenders
By the Lawyers Committee for Human Rights

Las Asociaciones Civiles en el Derecho Venezolano (Qué son y cómo funcionan)
By Miguel Angel Itriago and Antonio L. Itriago
Reviewed by Caroline L. Newman

Philanthropy and Law in Asia
Edited by Thomas Silk

Case Notes

India:
CIT v Sri Gujarathi Mandal | CIT v Nagi Reddi Charity

France:
Association Eglise de Scientologie
| Albert & others v Association club du chien-guide d'aveugles d'Ile de France

United Kingdom:
Varsani v Jesan | Singh v Bhasin | The Zoological Society of London v Customs & Excise / Dean & Canons of Windsor v Customs & Excise | National Trust v Hoare

United States:
United Cancer Council v Commissioner | In Re Bishop Estate

Country Reports

Asia Pacific:
Regional | Australia | China | New Zealand | Papua New Guinea | the Philippines | Singapore | Vietnam

Central and Eastern Europe:
Albania | Bulgaria | Croatia | Czech Republic | Hungary | Latvia | Lithuania | Macedonia | Romania | Slovakia

Latin America and the Caribbean:
Brazil | Columbia | Falkland Islands/ Malvinas | Peru | Venezuela

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

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

North America:
Canada | the United States

Sub-Saharan Africa:
Cameroon | Ethiopia | Ghana | South Africa

Western Europe:
Regional | Belgium | France | Germany | Republic of Ireland | Italy | Malta | Sweden | Switzerland | the United Kingdom

Self-Regulation Initiatives

Code of Conduct for NGOs In Ethiopia- A Review Article
Eddie Adiin Yaansah

International Grantmaking

What’s Behind the Foreign Public Charity Equivalence Affidavit?
Betsy Buchalter Adler and Ingrid Mittermaier

International Developments

International Fiscal Association Congress 1999

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Editorial Board

Subscription Information

Previous Issues

ICNL Homepage

Country Reports: Newly Independent States

Armenia

1. Framework Legislation

The new Civil Code (see IJNL Volume 1, Issue 2) entered into force on 1 January 1999. (Tax Notes International, 8 February 1999)

2. Invitation to Debate: Social Partnership

Nouneh Doudoyan
Director, AAA NGO Center

The basis for social partnerships between different sectors of society, and more specifically between governmental and non-governmental structures, is provided by recognition of the citizens’ constitutional right to freedom of association, assembly, opinion, and other civil rights and liberties, as well as by mechanisms that enable the effective exercise of those rights. Overall, these constitutionally guaranteed rights define the broader framework for social partnership between state structures of actual power and volunteer citizens’ groups of influence and reflect the nature of a political contract between a given state and society.

Influence can manifest itself through the broad spectrum of humanitarian, rehabilitation, development and advocacy oriented missions of volunteer citizens’ groups. Civilized interplay between influence and actual power can be ensured through different mechanisms of civic participation in decision-making processes that impact all levels of society.

In order for the social partnership to evolve and develop into a functional model, a nation’s governance structure and justice administration system are of utmost importance. These are the ultimate guarantors of the applicability of laws and legal protection within society, thereby ensuring the effectiveness of civil society and its overall development.

The balance struck within society between the interplay of the formally defined functions and power of state structures and the informally defined missions and influence of civic groups or non-governmental organizations, as well as the socio-cultural traditions and practices, and the economic situation within a given society, are what molds specific forms and types of social partnerships beyond the mere recognition and applicability of the right to freedom of association.

The legal framework, specifically the clarity and consistency of relevant laws, within which civil society organizations operate, along with the diversity of legal/organizational types of not-for-profit groups, and the possibility of acquiring the status of legal person, together contribute to the institutionalization of the civic sector. They also set the basis for agreement-based interaction between the civic sector and both governmental structures and other civil society organizations.

An NGO concludes its first contract with the state when its charter, which defines the organization’s mission and goals, becomes the basis for acquisition of the status of legal person through registration.

This broadly defined partnership formula can be further refined through the introduction of different levels of taxation privileges based on NGO functions within society and prioritized by the state (e.g. charitable nature of activities, etc.). The nature of social partnership will also largely be determined by the nature of the mechanisms regulating NGO operations – ranging from excessive oversight by the state to necessary and sufficient oversight to ensure responsible behavior on the part of NGOs within the defined regulatory framework.

Another indicator of the type of partnership offered to civic groups by the state is the body of legal provisions guaranteeing the financial sustainability of NGO efforts, initiatives and operations in general. Armenian law permits the establishment of subsidiary commercial enterprises and the participation in certain types of commercial enterprises to support the resource base of not-for-profit groups in attaining their defined goals and objectives. Thus, the law encourages their financial independence. Currently, due to a number of objective factors, i.e. factors beyond NGO control, this possibility is rarely utilized by Armenian NGOs. NGOs have recently begun to articulate and advocate for governmental funding support to implement projects - whether through contracts or through competitive grants. Of course, the whole process and mechanism of state granting requires a very responsible and results-oriented approach in order to ensure that the concluded partnership project truly benefits the needs of society.

If NGOs believe that funding based partnerships with government structures are important, they have to learn to advocate and articulate a rationale and arguments that reflect the economic, social, and other benefits of that form of partnership. The government, in turn, should look for cost-effectiveness, better attendance to the needs of needy populations, and expansion of the active citizenry base to address the problems and development priorities of society. It can assess various partnership formulas from the perspective of decreasing marginalization, apathy, and social tensions within society, increasing the possibilities for enrichment of social life with effective practices as introduced by NGOs, etc.

Both civic groups and governments ultimately have to assess the effectiveness of their policies, practices, and projects in relation to the developments they stimulate and results they produce. State granting based partnerships between government and NGOs require a responsible attitude by both sides in terms of outcomes produced, since such a partnership involves the state budget and taxpayers’monies. NGOs, whether they realize it or not, have and can effect important influence on the effectiveness and quality of that process. The integrity and quality of the process can be sustained if the guiding principle is the public benefit it can bring. The state’s participation in social partnership does not necessarily imply funding or other resource support of NGO projects or programs. The partnership formula can have other manifestations such as a) the encouragement of private philanthropy which strongly introduces businesses as important players in social partnership interaction; b) the creation of a favorable environment of lawful practices which enhance the effective operation of NGOs and society in general; and c) consultative partnership processes, in which case the state structures can greatly benefit from the added perspectives and creativity of diverse NGOs, and be better aware of the needs of the different segments of society, which in turn can help the government to develop more effective and workable policies and practices.

Certain legally defined civic participation mechanisms can help contribute to the effectiveness of that process and help sustain the evolution of a society that is a creative, development-focused, and confident master of its fate.

NGOs do not need to expect and encourage the government to produce special laws and regulations for their sector beyond what is necessary and sufficient and derives from the overall nature of that sector as a not-for-profit one and from the nature of specific not-for-profit legal organizational types. In other words, the NGOs do not need to regard themselves as beneficiaries of the state. If they remain true to their chosen missions with integrity and therefore sustain and expand their legitimacy and credibility base within society and among the segments whose interests and rights they choose to represent or advocate for, they have much stronger arguments for the importance of their role in the development of society on the basis of what they have achieved and can achieve to help that development.

Governments too do not need to concern themselves with special regulatory mechanisms for NGO activities since they can encourage this or that type of activity by NGOs in society and encourage civic group efforts in specific prioritized substance areas by providing tax privileges and encouraging private philanthropy for relevant priorities.

Therefore, partnerships should be based on the recognition of general benefits of that interaction process for society. The effectiveness of different forms of social partnership can be determined by the results and outcomes achieved. The perspectives of the two sectors on the nature of social partnership and each other’s role in partnership, the types of mechanisms ultimately selected and introduced both by law and by tradition of precedents, as well as the lack of effort in that direction will shape the quality of that partnership in terms of the possibilities for constructive creativity it can unleash and encourage among the citizens and the benefits it can bring to society and its development.

Azerbaijan

A new law published on 14 November 1998 sets out rights of assembly and the circumstances in which the state can restrict those rights. The organisers of public meetings must notify the relevant authorities in writing at least 5 days before the meeting. The authorities have power to restrict the right of assembly for the purposes of protecting public and state security, preventing riots and crime, and "protecting the norms of behaviour and morals". Assemblies that are being held without prior notice can be halted and "appropriate force" can be used to disperse participants who do not comply. (Inside Central Asia, 16-22 November 1998)

For more information, please, contact Natalia Bourjaily, ICNL Program Director for NIS/FSU in Washington. Tel: (202)624-0766; e-mail: nbourj@icnl.org 

Belarus

1. Legal News

Following the Soros Foundation's refusal to pay a USD 3 million penalty for alleged violations of tax laws, its property was seized in September 1997 and it subsequently ceased operations.

On 12 January 1999 the Supreme Economic Court ruled that the tax authorities had no grounds for imposing the penalty. It is not yet clear whether the tax authorities intend to appeal against this decision. (Interfax Russian News 12 January 1999)

2. President’s Decree # 2 dd. January 29, 1999

On January 26 1999 the President of the Republic of Belarus issues the Decree on Come Measures of Regulation of Activities of Political Parties, Labor Unions, and Other Public Associations. According to this Decree all public associations, political parties, and labor unions will have to re-register with the state authorities. All associations shall be prohibited if they fail to re-register before July 1, 1999. According to local NGOs, through the complicated and arbitrary process the government will eliminate associations not in "favor" of the government.

The President’s Decree established complicated two-levels process for the registration (re-registration) of public associations. First, applicants shall submit their documents to the Ministry of Justice (MoJ), the prime registration authority. Then, after the MoJ reviews the documents it transfers them to the Republican Committee on Registration (Re-registration) of Public Associations established by the same President’s Decree. The Committee decides weather the association shall be registered (re-registered) and returns the documents with its resolution to the MoJ. The MoJ issues decision to register (re-register) or reject the registration (re-registration) of applied association.

According to the information from the Ministry of Justice (the registration authority) only 20 NGOs re-registered before March 15, 1999. NGOs applied for the re-registration complain that the MoJ demands to make changes in their statutory documents, which does not comply with existing legislation. For example, the MoJ requested some associations to change goals of their activity, to including provision that "the NGO carries activities according to the 1996 Constitution of the Republic of Belarus and with the President’s Order # 2 dd. 01-29-99", other similar demands. Even after passing the MoJ review the Committee rejected to re-registration 2 of 22 associations applied. The reason given for these rejections - the harmful nature of these associations to the public.

In addition, a long list of documents is required to be presented by associations in order to get registered (re-registered). Among these documents are: "detailed description of simbol of organization with attached conclusion by the State Committee of Archives …". The State Committee of Archives is not very cooperative with issuing such conclusions. This new procedure came up at the same time the re-registration was required. The President’s Decree also requires: " materials to prove that association complies with the requirements in legislation (including information about the members of elected bodies of association…). It is not clear what evidence shall be presented to prove that association did not violate the law. In addition, NGOs are very concerned that this information might be used against individuals listed as members of elected bodies when the government will not like a particular NGO. The other documents required are "the charter, …, the program (for political parties); the approval of the number of members in association; graphic drawings of the organizational structure of association…, the approval of the legal address of association, the decision of the authorized body on granting authority to at least three members of its managing body to represent the association during the process of re-registration, the application form the individual who granted his/her name to be used in the name of the association; the certificate from the tax authority that the association does not have debt to the budget...., the document to show that the registration fee was paid; …".

3. President’s Decree # 11 dd. March 16, 1999

With this Decree Belorussian President approved Regulation on Registration and Liquidation (Termination of Activities) of Subjects of Economic Activities. According to this regulation all commercial and non-commercial ("excluding political parties, and other public associations regulating with other legislative acts") are required to go through re-registration before January 1, 2001. The Regulation established a joint Republican Register were information about all subjects of economic activity shall be collected.

Further information on the NGO legislation in Belarus can be obtained by contacting in Minsk Elena Tonkacheva, President of Belorussian NGO Independent Society for Legal Research (375-172)29 00 01 (tel/fax); (375-172) 36 55 17 (tel.), or in Washington Natalia Bourjaily, ICNL Program Director for NIS nbourj@icnl.org.

Georgia

1. NGOs Reregistration Process According To the New Civil Code Has Been Completed

The Georgian Civil Code came into force on November 25, 1997. It defines 2 organizational-legal forms of not-for-profit legal entity: an association and a foundation. Adoption of the new civil code caused the alteration of already existing legal relations and it became necessary to look through them. Not-for-profit legal entities created on the basis of the law "On Citizens Public Associations" should have been re-registered by January 1, 1999 according to the requirements of the code. Re-registration of existing not-for-profit organizations went on during 1998.

In accordance to the law, registration of the association is made according to the legal address in the appropriate district court, while the foundation registration is carried out by the Ministry of Justice of Georgia despite its location. Proceeding from the aforesaid, there does not exist a common register for organizational-legal form of associations in Georgia. As far as foundations are concerned, according to the data of April 1, 1999 the Ministry of Justicehas registered about 200 foundations.

People who wished to re-register their organizations as well as those who wanted to found a new one faced, very often, legislative and other types of barriers.

Officials of registration organ created additional problems. In most cases they demanded to file such documents which should have been presented only by entrepreneurial legal entities.

Although, adoption of the new civil code is a step taken forward, it obviously requires to be improved. If requirements for the foundation of associations should be more concrete, the law on establishment of foundations created more problems. First of all, a rule defining the amount of the property share creates misunderstanding. The same can be said on legal norms connected with the creation and functioning of a supervising organ of curatorium.

2. NGO Consulting Board Existing with the Georgian State Chancellery.

On the basis of the Presidential Decree #409 dated July 9, 1998, an NGO Consulting Board has been created and it exists with the State Chancellery of Georgia. According to the Presidential Decree, the first deputy of the State Minister is appointed to the position of the Head of the State Chancellery for a 2-year term. The Board offers consultation and aims at the development of NGO and the state cooperation in order to create the civil society and to assist the establishment of democratic forms of management.

3. A Bill on "Charitable Organizations and Charitable Activity"

The bill on "Charitable Organizations and Charitable Activity" has been created at the initiative of GBLC. According to it, public benefit can receive the status of charity organization on the basis of their demand.

A bureau of relations with charitable organizations is supposed to be the basis of the Charity Affairs Department stipulated by the bill. Such variant of transformation will be acceptable also for the authorities, as they will not have to single out additional funds from the budget for the creation of a new structure.

At present lobbying of the bill "On Charitable Organizations and Charitable Activity" is being carried out at the executive organs. The bill was sent to all ministries and we have received remarks and proposals from them. Soon the bill will be discussed by the board of Trade and Foreign Economic Relations Ministry and the final variant of the bill will be represented to the Georgian President who will enter the Parliament with the legislative initiative.

4. Existing legislative problems

The Presidential Decree #322 dated June 23, 1997 modifies "The Rule of Going through the Customs for the Goods Purchased by a Grant".

Goods purchased abroad with grant money are free from payment of customs duties and VAT. But in order to enjoy this privilege, according to the above-mentioned President’s Decree, it is necessary to obtain a permission from 2 ministries, where it will be proved that goods are purchased with grant money. The mentioned rule does not stipulate the list of documents to be filed at the ministries together with the term of issuing permissions.

Proceeding from the aforesaid, officers of 2 different ministries can demand documents according to their own judgment and to postpone issuing of the permission by indefinite term. Goods purchased abroad and imported to Georgia are kept in the customs warehouses until the customs clearance. It requires daily payment of a fee. The longer the goods remain in the warehouse, the more money should be paid by the organization. Officers are well aware of this. The effective rule is favoring the development of corruption.

The law "On Press and Other Means of Mass Media" creates serious problems for publishing activity. According to the law, NGOs are not allowed to publish and distribute books and other periodical or non-permanent editions above 600 copies. The law is rather outdated and it does not reflect serious changes in the development of society.

According to the Tax Code, Article 119, VAT paid during the purchase of goods bought by grant are reimbursable. In the conditions of permanent deficit of the state budget, the most NGOs can not recover VAT. It becomes necessary to work out the different mechanism of VAT recovering.

Vaja Salamadze
Chairman of The Board
Georgian Business Law Center
2, May 26 Square, room 419,
Tbilisi, Georgia, 380071
Phone: (995 32) 941605
E-mail: vazha@geoblc.org
Internet: http://www.geoblc.org

Kazakhstan

1. Framework Legislation

In his speech in March 1999 the President of the Republic of Kazakhstan announced a series of legislative initiatives which will continue the deepening of democracy under this program. Among other initiatives, the President emphasized a new Charity Law, which will enable Kazakhstan’s 2,000 non-governmental organizations (NGOs) to "be more active in attracting funds to address the most pressing social problems."

Shortly prior to the mentioned above President’s speech Kazak NGOs lost several benefits due to changes to the Tax Code. Excisable goods imported to Kazakhstan as humanitarian aid and for charity purposes on behalf of states, governments, international organizations, including the provision of technical assistance, shall be subject to excise taxes. Other changes to the Tax Code were made.

The drafting group established in the Senate is working on the law regulating different organizational forms of NGOs. The drafting group visited the United States in February 1999 to study NGO regulation in the US. According to the drafting group the first draft will be available for public discussion in April 1999. Previously Kazakh NGOs discussed the initiative and submitted the list of their concerns and major problems with the current NGO legislation to the senator’s group. ICNL is providing technical assistance with preparation of the draft law.

The other law of high priority in Kazakhstan is the law on Charitable Organizations. There are two bodies currently working on it : the Ministry of Justice and the lower chamber of the Parliament. The draft law Charitable Activities prepared by the Ministry of Justice is identical to the charity law of the Russian Federation. This draft is indeed in support of charities but does not serve the expected purpose of such law: providing PBOs with real benefits. The lower chamber of Parliament just created a formal working group to work on this drafting process. The Parliament’s group is using the draft previously prepared by NGOs. The later draft complies with international principles of NGO regulation and, if adopted, would create a real and fair basis for distributing tax benefits to NGOs.

On February 12, a cooperation agreement between the Ministry of Culture, Information and Public Consensus and NGOs was adopted on the creation of an "NGO Info-Center". Its purpose is to promote relations between the government and NGOs, to coordinate joint activities in order to solve social and economic problems and to draft laws and improve the legislative governance of NGOs.

The draft Law on National Cultural Associations

A draft Law on National Cultural Associations was proposed by the Ministry of Culture, Information and Public Consensus, which was included in the list of laws to be prepared by the Cabinet of Ministers for 1999. Often there is no need in special laws regulating NGOs active in special areas of public life. All NGOs have the same organizational forms (public association, foundation, or institution) and internal governance structure which are regulated by basic laws. In Kazakhstan these general issues are regulated by the Civil Code, the Law on Public Associations, the Tax Code, and etc. Special treatment of NGOs carrying out activities in specific areas of public life might be addressed in tax laws or through the procedure of licensing entities carrying out activities which require a license.

A fundamental distinction between types of NGOs that is relevant to the legal benefits and burdens placed upon them is whether an NGO is organized and operated primarily for the mutual benefit of defined group of individuals (mutual benefit organizations) or primarily for the benefit of the public or some segment thereof (public benefit or charitable organizations).

NGOs carrying out activities in one area of public life, for example, culture, may be of public (PBO) as well as of mutual benefit (MBO). If such a differentiation exist in the current legislation, different law provisions shall apply to cultural organizations as PBOs and MBOs.

For more information contact Vadim Nee, ICNL local partner and NGO law specialist (7-3272) 62-16-44 [kazleep@igc.almaty.kz] or the UNDP NGO Resource Center (7-3272) 62-83-26 or fax at (7-3272) 78-14-50 [ai@un.ala-ata.su]. For information on NGO development contact the Counterpart Consortium in Almaty Kazakhstan (7-3272) 62-16-44 or fax at (7-3272) 60-86-06 [allocal@cpart.alma-ata.su].

2. Religious Organizations

The controversial legislation proposed in 1998 to regulate religious organizations has been withdrawn according to Felix Corley of the Keston News Service. For further information on this legislation, including the full text of the withdrawn law, and on the process underway to revamp the 1992 law on freedom of religion, see Keston News Service for March 27, 1999 at www.keston.org.

Kyrgyzstan

The draft law On Non-commercial Organizations (the draft NGO law) was considered by the Legislative Committee of the Parliament in March 1999. The joint group of NGOs and deputies of the upper chamber of the Parliament prepared the NGO draft law. The NGOs broadly discussed the draft throughout the country.

However, some important concerns about the draft law were raised by NGOs, while the draft law was already in the Parliament. In particular human rights NGOs were concerned that the government will be using the new law to pressure NGOs before the upcoming elections. The current text of the draft law contains provision, which requires re-registration of NGOs to comply with the new law. The other important issue of their concern is the immediate termination of the current 1992 law on Public Associations from the date when the new NGO law will come into effect. The current Law on Public Associations regulates public associations including political parties while the new Law on NGOs does not regulate political parties. Since there is no law on political parties, they will be unregulated and outlawed right before the elections. NGOs addressed other concerns, for example regarding authority of the government body to supervise NGOs.

These changes addressing the most important NGOs concerns were discussed and accepted by the group of deputies assigned to work on the draft law within the Senate.

It is remarkable that deputies seem very cooperative and are willing to make the necessary changes to the draft law to make it acceptable to NGOs. Many of these concerns are already incorporated into the draft law. The draft law passed the first reading in the Senate and is still awaiting further consideration in Parliament.

For more information on the NGO law initiative contact Interbilim in Bishkek, Kyrgyzstan at (3312) 26-87-11 or 66-05-16 [asiya@cbilim.bishkek.su] or ICNL in Almaty, Kazakhstan at (7-3272) 62-16-44 or fax (7-3272) 60-86-06 [rremias@cpart.alma-ata.su]. For information on NGO development contact the Counterpart Consortium at (3312) 61-00-35 or fax (3312) 22-38-13 [office@counterpart.org.kg]. For information regarding the proposed referendum and governmental activity contact the National Democratic Institute at (3312) 66-01-66 or 66-01-67 [ndirick@asiainfo.kg].

Moldova

The draft Law on Foundation has been submitted to Parliament. It was prepared by NGOs led by NGO « Biotica ». During its consideration a debate arose about the minimum endowment that should be required in order to establish a foundation. It was argued whether the $200 originally suggested should be increased to $5,000-10,000. The suggestion to increase it was successfully lobbied against and the minimum endowment will remain minimal in the final draft that will be considered by Parliament.

This coming April the members of the Moldovan Certification Commission dealing with certification of charitable organizations eligible for tax benefits will be visiting London to study the work of the British Charity Commission. The Moldovan Certification Commission operates according to the Law on Public Associations of 1996.

For more information, please contact the BIOTICA Ecological Society. Tel/Fax: (373 2)24 3274; e-mail: bio@mdearn.cri.md  

Russia

Tax Legislation

On January 1st 1999 Part 1 of the New Tax Code came into effect. The first part doesn’t contain any changes to tax rates and consists mainly of provisions on procedure, principles and definitions. Changes to tax rates will be introduced by the second part of the new Tax Code which is generally postponed. Special federal laws on the introduction of amendments to the current laws on the VAT, on the profit tax, on excise duties, on the income tax which will probably make some changes are under discussion now in State Duma. An important change in the first Part states that all doubts, contradictions and ambiguities in the legislative acts on taxation should be interpreted in favour of taxpayers.

The federal law, signed by the President on January 4th 1999, on the rates of insurance payment to the Pension Fund, Social Insurance Fund, Employment Fund and medical insurance funds for the year 1999, restricted the list of benefits given in many previous acts. According to this law only overnational public associations of disabled people are free from the insurance payments.

For more information, please, contact Daria Miloslavskaia, the Lawyer, the Charities Aid Foundation Russian Representation Office. Phone (in Moscow): (095) 917-2514; fax: (095) 298-56694. E-mail: lenay@glas.apc.org

Tajikistan

1. Framework Legislation

The legal and economic framework of Tadjikistan collapsed under the weight of a civil war. After a drawn out process of reconciliation, a coalition government is attempting to restructure the legal framework of the country in order to provide a new stability for the country. The government, in conjunction with multi-national efforts, is attempting to move forward in reconstructing a shattered social and political framework. In order, to step up this process, the government has set forth an optimistic agenda of new laws to be heard in the Parliament.

In 1997, at the request of the Ministry of Justice, ICNL prepared comments on two NGO draft laws; the Ministry prepared one draft and the other draft was prepared by a group of NGOs. ICNL provided technical assistance to the drafters in modifying their drafts and is currently promoting a dialogue between the Government and NGOs regarding NGO draft laws.

Again at the request of the Ministry of Justice, ICNL and Counterpart Consortium conducted a workshop (Dushanbe, April 15-16, 1998) with government officials, members of the National Reconciliation Commission (leaders of the opposition parties), and NGOs. Participants at the roundtable adopted a plan for NGO law reforms in Tadjikistan and created a working group which included NGOs, government and opposition party representatives as well as deputies. The working group proposed changes in the draft Law on Public Associations to the Parliament.

On Saturday, May 23, 1998, the Parliament of Tadjikistan adopted the draft law on Public Associations (Unions) and one week later the President signed the bill into law. Many changes to the draft Law on Public Associations proposed by the working group were adopted by the Parliament.

The new Tadjik Civil Code is in drafting process. In August 1998, at the request of the Minister of Justice, ICNL provided comments on the draft Civil Code section on «Legal Entities,» addressing provisions on non-commercial legal entities.

A new Law on Political Parties was also adopted by Parliament. However, this law prohibited the Islamic Party and also the Tadjik Communist Party. According to local experts the adoption of the Law on Political Parties might damage the process of national reconciliation and overall reform efforts.

The difficult political situation shifts the priorities of the government’s attention from the NGO problems to resolving military conflicts between the government and the groups of the opposition. Thus, current issues are focused on national reconciliation and maintaining peace within the country.

2. Tax Legislation

The new Tax Code has been adopted at the end of 1998 with most provisions coming into effect on January 1, 1999. The implementation of the Tax Code might cause depriving public associations of currently existing tax benefits.

For the first time in Tadjik legislation the Tax Code provides definitions of terms of «charitable activity», «charitable organizations», «religious activity», and «religious organizations». The Tax Code specifically provides benefits to charitable and religious organizations. However, no additional tax benefits are granted to charitable organizations in comparing with previously existing benefits for public associations. The new term «charitable organization» is more narrow then the term «public association». In addition, there is no special procedure yet in Tadjik legislation to register charitable organizations. Unless this procedure will be established and existing public associations re-registered as charitable, tax benefits will not apply to public associations.

According to the Tax Code, religious and charitable organizations are exempt from income tax. The only taxable income is that gained from an entrepreneurial activity. Charitable and religious organizations are not taxed on donations they receive. Donors receive tax preferences (deductions of up to two percent of net profit) only when they donate to charitable organizations or on the part of income spent for charitable activities.

Tax benefits on VAT apply to all entities carrying out activities listed in the Tax Code. This list is much more narrow then the list of activities considered to be charitable in the Tax Code.

In order to make the implementation of the Tax Code effective and beneficial to the development of the NGO sector it is important to adopt the follow up legislation, for example, regulating registration of charitable organizations. The Tadjik government called NGOs for assistance with further drafting of tax legislation.

For more information on the NGO law initiative contact ICNL in Almaty, Kazakhstan at (7-3272) 62-16-44 or fax (7-3272) 60-86-06 [rremias@cpart.alma-ata.su]. For information on NGO development contact the Counterpart Consortium in Dushanbe, Tajikistan at (3772) 21-65-14 or fax (3772) 21-75-59 [root@cpart.td.silk.org].

Turkmenistan

The new Civil Code, which was adopted in July 1998, came into effect on March 1st. However, the section on public registry will wait until the year 2000 to come into effect. Provisions of the new Code are close to provisions in the German Civil Code. It allows NGOs to be formed as Unions (membership organizations) and Funds (non-membership organizations) and established very liberal requirements for legal entities (including NGOs) to get registered. Starting from March 1, these provisions shall replace provisions regulating the same issues in the Law on Public Associations (1992). In fact, if applied provisions of the Civil Code effecting NGOs will be the most progressive in Central Asia. For example, the automatic registration of NGO is assumed if the registration authority failed to respond on application to register within the time limit established by the law.

A Conference entitled "The International Principles and Legal Environment for NGOs in Turkmentistan" took place in Ashkhabad from March 16-17. It was organized by the Institute on Democracy and Human Rights and ICNL with finance support from GTD and technical assistance from Counterpart Consortium. Government officials, representatives of local and international organizations attended the conference. The US Ambassador greeted participants of the conference. The major presentations were given by the ICNL, Professor Dr. Jacek Kurczewski, a well known expert of NGO law issues in CEE from Poland, and the Deputy Chair of the Parliament’s Committee on Legislation. Its purpose was to educate participants and initiate the discuss on the roles and purpose of the NGO sector, international principles, the regulations of NGOs in the NIS and CEE, and how international experience can be applied in Turkmenistan.

For more information regarding the new Civil Code and reform of NGO legislation, contact ICNL in Almaty, Kazakhstan at (7-3272) 62-16-44 or fax (7-3272) 60-86-06 [rremias@cpart.alma-ata.su]. For information on NGO development contact the Counterpart Consortium in Ashgabad, Turkmenistan, at (3632) 35-71-20 of fax (3262) 24-38-51 [roselie@cpart.sibnet.tm].

Ukraine

Further information on the NGO legislation in Ukraine can be obtained by contacting in Kiev Anatolij Tkachuk, Director of the Ukrainian NGO Institute of Civic Initiatives (380-044) 295-43-98 (tel./fax,) or in Washington Natalia Bourjaily, ICNL Program Director for NIS nbourj@icnl.org.

Uzbekistan

The draft law on "Non-Governmental, Non-Commercial Organizations" passed its first reading in Olij Majilis (Parliament) in December 1998. While more improvements can be made the draft law complies with nternational principles of NGO regulation. The purpose of the draft law is to further develop provisions in the Civil Code 1996. It is considered to be a «fremework» law establishing general provisions for all organizational forms of NGOs earlier declared by the Civil Code. According to the legislators the law will be followed by specific laws regulating organizational forms of NGOs. The draft law is officially published and opened for public discussion. Comments from interested persons are welcomed by the Commision on Legislation and Judicial-legal Issues of the Parliament. Many international and local NGOs have provided their comments and recommendations to the draft law. Some of these recommendations were incorporated. Kengash (the Lawer Chamer of the Parliament) already approved the draft law. This draft is now scheduled for its second reading this coming April. It is expected that it will be adopted the same time.

Major events related to the draft law :

Further information on the NGO law or current legislation, one may contact Inna Bagdasarova, Advocate and ICNL local partner in Tashkent, Uzbekistan (3712) 76-29-66 [icnl@cpart.silk.org]. For information on overall NGO development contact the Counterpart Consortium in Tashkent Uzbekistan at (3712) 76-29-66 or fax (3712) 78-14-50 [blair@cpart.silk.org].

 
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ISSN: 1556-5157