The International Journal
of Not-for-Profit Law

Volume 2, Issue 2, December 1999

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

Table of Contents

Letter from the Editor

Articles

Should the Rules Governing Foundations be Placed in a Civil Code?
By Ulrich Drobnig

Strategic Options for Building the Chinese NGO Sector in an Open World
By Li-Qing Zhao

The Regulation by Public Bodies of Charities in Scotland and Northern Ireland
By Dr. Christine R. Barker and Dr. Kerry J. O’Halloran

Legislation for Non-Profit Organizations in the Republic of Moldova [Russian]
By Ilya Trombytsky

Endowments of Foundations Receive Contributions from the State Privatization Fund of the Czech Republic
By Petr Pajas

A Canadian Charity Tribunal: A Proposal for Implementation
By Arthur B.C. Drache, Q.C. with W. Laird Hunter

Case Notes

Asia Pacific:
the Philippines

European Court Cases:
European Court of Human Rights (Turkey)
| European Court of Justice (Belgium)

Newly Independent States: Belarus

South Asia:
India

Western Europe:
Ireland

Country Reports

Asia Pacific:
Australia
| China | Japan | Korea | New Zealand | the Philippines | Taiwan | Vietnam

Central and Eastern Europe: Regional | Bosnia and Herzegovina | Croatia | Czech Republic | Kosovo | Montenegro | Slovakia

Latin America:
Argentina
| Chile | Colombia | Uruguay | Venezuela

Middle East and North Africa: Iran | Israel | Palestine

Newly Independent States: Azerbaijan | Belarus | Kazakhstan | Moldova | Turkmenistan | Ukraine | Uzbekistan

North America:
Canada/ the United States

South Asia:
India

Sub-Saharan Africa:
Cameroon
| South Africa

Western Europe:
France | Germany | the Netherlands | Portugal | Turkey | the United Kingdom

International Developments

Recognition and Protection of NGOs in International Law
By Frits Hondius

NGOs for Transparency and Against Corruption
By The Europhil Trust

International Grantmaking

Grantmaking and Embargoed Countries: An Overview Using Kosovo as a Case Study
By Timothy S. Burgett and Timothy R. Lyman

Dissolution Dos and Don'ts
By Karla W. Simon

- - - - - - - - - -

Editorial Board

Subscription Information

Previous Issues

ICNL Homepage

Case Notes: European Court Cases

European Court of Human Rights (Turkey)

Dissolution of Turkish Political Party Held to Violate the European Convention on Human Rights

Case Note on Freedom and Democracy Party (ÖZDEP) v. Turkey (European Court of Human Rights December 8, 1999).

By Karla W. Simon

In a recent Grand Chamber decision the European Court of Human Rights (“the Court”) held that the dissolution of a registered political party, the Freedom and Democracy Party (ÖZDEP), violated Article 11 of the European Convention on Human Rights (“the Convention”) See Freedom and Democracy Party v. Turkey. In so doing it relied heavily on the earlier decision in United Communist Party v. Turkey (Reports 1998-I, p.1), discussed in European Court of Human Rights Holds Right to Form Associations is Fundamental Human Right, in IJNL vol.1, iss. 1. Specifically the Court held that the deregistration in question violated Article 11 because the measure, clearly an interference under that Article, was disproportionate under the circumstances.[1]

The ÖZDEP case is significant because it reaffirms the principles stated by the ECHR in the United Communist Party case. ÖZDEP involved a similar attempt by Turkey to eliminate access to legitimate political activities by persons favoring a more open public policy vis à vis the Kurdish minority in Turkey. Thus the Court once again discussed the importance of political parties in a democracy – “It is of the essence of democracy to allow diverse political projects to be proposed and debated, even those that call into question the way a State is currently organised, provided that they do not harm democracy itself.” The Court also stressed, as it did in the United Communist Party case, the fact that ÖZDEP was deregistered even before it could carry out any activities for which it might indeed be legitimate to deregister a party (such as actually conducting activities that would tend toward the undermining of the state).

In drawing attention to this aspect of the case, the Court noted that ÖZDEP was “penalised solely for exercising its freedom of expression.” The case thus highlights the connection between Article 10 (freedom of expression) and Article 11 (freedom of association and assembly) of the Convention. This is relevant not only for political parties specifically, but also for other nongovernmental, not-for-profit organizations (NGOs) that express opinions differing from those in the mainstream. The Court says, for example, that “there can be no democracy without pluralism. It is for this reason that freedom of expression as enshrined in Article 10 is applicable … not only to ‘information’ or ‘ideas’ that are favourably received or regarded as inoffensive or as a matter of indifference, but also to those that offend, shock or disturb.” The case of course deals specifically with the collective exercise of the freedom of expression by people coming together in political parties. It is clear, however, that the collective exercise of this freedom is just as important for nonpolitical NGOs as it is for political parties.

Taking this latest decision together with the earlier decisions in United Communist Party, Socialist Party v. Turkey (Judgment of May 25, 1998, Reports 1998-III, p. 1233), and Sidiropoulos and Others v. Greece, one can see a development in the thinking of the European Court of Human Rights that points toward greater attention to the protection of the freedoms of expression and association in registered entities. The Court has been saying fairly consistently that the expression of highly unpopular ideas, without more, is in no way cause for a group of citizens to be denied access to the protections of legal personality. The ÖZDEP case is an important reiteration of that principle.

[1] “In the instant case, the Court notes that the interference in issue was radical: ÖZDEP was definitively dissolved with immediate effect, its assets were liquidated and transferred ipso iure to the Treasury and its leaders were banned from carrying out certain similar political activities. Such drastic measures may be taken only in the most serious cases.” ÖZDEP, op cit.

European Court of Justice (Belgium)

Nationality-Based Requirements for NGO Registration

By Karla W. Simon

Case Note on Commission of the European Communities v the Kingdom of Belgium (European Court of Justice 1999).

In the June 29, 1999, decision of the European Court of Justice (ECJ) in Commission of the European Communities v the Kingdom of Belgium, the Court held that the Kingdom of Belgium was not compliant with its obligations under the Treaty of the European Community (EC Treaty). Specifically, provisions of Belgian law were held to be in violation of Article 6 (now Article 12) of the EC Treaty. This article prohibits discrimination against EC nationals on the basis of nationality. The offending provisions of Belgian law required the presence of at least one Belgian national in an association registered as a legal person under Belgian law:

  1. under Article 1 of the Law of 25 October 1919, granting legal personality to international associations involved in various philanthropic activities, an "international association" was required to have one Belgian national in its management; and
  2. under Article 26 of the Law of 27 June 1921, granting legal personality to not-for-profit associations and institutions promoting the public interest, an organization was required to have Belgian nationals as three-fifths of its members.

Although the case involves an interpretation of the EC Treaty and is thus relevant only to states party to that Treaty as well as to accession states, it raises an issue that is of more general interest. Is it appropriate for the law to require that a certain minimum number of citizens be members of or be present in the governance structure of a domestically registered NGO? In both the World Bank's draft Handbook on Good Practices for Law Relating to Nongovernmental Organizations and the Open Society Institute's Guidelines for Law Affecting Civic Organizations, the issue of the registration of foreign organizations is discussed. Both books take a strong position that foreign NGOs should be allowed to register branches, affiliates, or subsidiaries in any state, under terms and conditions applicable to domestic NGOs. See, Guidelines Section 10.1 and Handbook Section 35. But neither book deals with the issue discussed here.

In the elaboration of the principles behind permitting foreign NGOs to register, both the Handbook and the Guidelines stress that a state does have appropriate interests at stake in protecting its citizens from harm by an entity that has activities or operations within its borders. There is thus a need for a foreign NGO to be subject to court jurisdiction in any state in which it has more than a minimum of activities. This is necessary in case it or its agents breach a contract, or commit negligent or criminal acts. Similar concerns appear to have been relevant when the Belgian parliament inserted the provision in the 1919 law requiring the presence of a Belgian national in the management of an international association. According to Dirk Longtings, an attorney with the Brussels office of Hogan & Hartson, this provision was intended to ensure that "the Belgian authorities would always have jurisdiction over at least one person connected with the association." See Dirk Longtings, "The Practice of the Ministry of Justice Regarding International Non-Profit Associations," in REEKS: NON-PROFIT RECHT & MANAGEMENT 11, 21 (1996). Similar concerns presumably animated the similar provision in the 1921 law.

Belgium must now amend its laws to remove discrimination against the citizens of other EU countries. In order to come into compliance with the EC Treaty, it could do so by eliminating only the discrimination against other citizens of the European Union. The question that remains, however, is whether amendments that are so limited would make good policy sense.

Clearly, any country has a legitimate interest in assuring that it has meaningful jurisdiction over an entity that is operating on its territory. In order to be able to enforce its laws and protect its citizens, any state must be able to assert jurisdiction over entities formed by foreigners. This legitimate state interest is met, however, if the entity itself is properly formed under the laws of that country (e.g., Belgium), whether any individual Belgian citizens are active as managers or members. A well-crafted law on foundations or associations should require that any entity formed under Belgian law have a locally-resident agent for acceptance of service of legal process or other binding legal documents. If service on an organization's designated agent is sufficient to assert jurisdiction over it, Belgium will be able to enforce its laws against that entity and assure its citizens that they can bring lawsuits effectively against that entity in a Belgian court.

Consistent with the position taken in the Handbook and the Guidelines, a state should also not limit the access of foreign NGOs to operations within its borders. The state's important and legitimate interests in protecting its citizens and ensuring jurisdiction over the foreign NGOs would seem to be satisfied once there is assurance that legal process can be served locally upon an authorized representative of foreign persons. It seems neither necessary nor appropriate for foreign persons to be excluded from the country, to be forced to register a domestic entity, or to have any entity that is registered dominated or controlled by local citizens. In a rapidly globalizing world, the life of civil society, like all other major human activities, will inevitably become more internationalized, with activities of NGOs and interactions between them increasingly flowing across national boundaries.

In short, it seems both unnecessary and undesirable for laws relating to NGOs to exclude foreign persons, including foreign NGOs, or to impose strict nationalistic requirements upon the membership or governance structure of a locally registered NGO. The anti-discrimination provision of the EC Treaty represents a form of good practice, one that should be emulated by countries in their own laws. Any forward-looking nation should embrace the non­discrimination principle embodied in the EC Treaty and recently applied vigorously by the European Court of Justice.

ICNL would like to thank Bart Servaes, an attorney in the Brussels office of JP Morgan, who provided access to materials that were used in writing this note.

 

Copyright 2008 The International Center for Not-for-Profit Law (ICNL)
ISSN: 1556-5157