The International Journal
of Not-for-Profit Law

Volume 2, Issue 3, March 2000

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

Table of Contents

Letter from the Editor

Articles

Introduction: "Codes of Conduct for Partnership in Governance: Texts and Commentaries"
By Tatsuro Kunugi and Martha Schweitz

On the Establishment of Social Organizations Under Chinese Law
By Ge Yunsong

Australia's Nonprofit Taxation Reforms
By Myles McGregor-Lowndes

Reviews

Codes of Conduct for Partnerships in Governance: Text and Comments
Edited by Tatsuro Kunugi and Martha Schweitz
Reviewed by Catherine Shea

Case Notes

Central and Eastern Europe: Croatia | Poland | Serbia

Middle East and North Africa: Egypt

Newly Independent States: Azerbaijan

North America:
the United States

South Asia:
India

Country Reports

Asia Pacific:
Australia
| East Timor |
New Zealand
| the Philippines | Vietnam

Central and Eastern Europe: Regional | Kosovo | Romania

Latin America:
Regional | Belize | Brazil | Venezuela

Newly Independent States:
Russia | Ukraine

Middles East and North Africa: Sudan

North America:
Canada
| Mexico |
the United States

South Asia:
India

Sub-Saharan Africa:
Cameroon | Kenya |
Sierra Leone
| South Africa | Tanzania | Zimbabwe

Western Europe:
France | Germany |
the United Kingdom

Self Governance

Law and Governance-- A Lesson in Limits
By Leon Irish and Karla Simon

Trends in Self-Regulation and Transparency of Nonprofits in the U.S.
By Robert O. Bothwell

The Role of Governing Boards in Fostering Accountability
By Crispin Gregoire

Financial Implications Affecting Nonprofit Nongovernmental Organizations Today
By Michael A. Freedman

International Grantmaking

Grantmaking by U.S. Foundations in Canada: A Canadian Lawyer Provides a Plain Language Primer
By Blake Bromley

Community Philanthropy

Community Philanthropy Initiative of the European Foundation Centre

Transatlantic Community Foundation Network

New Website Buergerstiftung.de

Partnerships

General | Brazil | Kenya | Russia

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Editorial Board

Subscription Information

Previous Issues

ICNL Homepage

Case Notes: Middle East and North Africa

Egypt

Fears in the Egyptian Third Sector  

Hafez Abu Sa’ada, the secretary general of the Egyptian Organization for Human Rights (EOHR), faced a minimum of seven years imprisonment for receiving money from the human rights committee of the British Parliament without having received the prior consent of the Ministry of Social Affairs (MOSA). The money in question was used for an EOHR legal aid program for women and the handicapped.

Mr. Abu Sa’ada was charged under §1.1 of Military Decree No. 4 of 1992, which forbids collecting or receiving donations for any purpose without the permission of MOSA. The decree is part of a system of martial law that has been in place in Egypt since 1981. Mr. Abu Sa’ada’s case was referred to the Emergency Supreme State Security Court, from which there is no right of appeal. Fortunately, the government of Egypt later dropped the case against Mr. Abu Sa’ada in the face of increasing international pressure. However, the legal tools used by the government against Mr. Abu Sa’ada remain at its disposal, and may be used to further harass Egyptian civil society.

Mr. Abu Sa’ada’s case, coupled with anxiety about the implementation of the new NGO law, Law No. 153 of 1999, which was passed last May (see IJNL, June 1999 issue for a discussion about the enactment of the law) and the continuation of the state of emergency, has had a chilling effect on the third sector in Egypt. One organization, the Group for Democratic Development (GDD) was reported by the Cairo Times to have recently shut down its operations.

A number of human rights groups denounced the government’s actions in the case against Mr. Abu Sa’ada. They viewed the charges against Mr. Abu Sa’ada as retaliation for a report published by EOHR on an incident of sectarian violence that took place in the predominantly Coptic village of al-Kushh in Upper Egypt.

In this short article we will analyze some aspects of the case brought against Mr. Abu Sa’ada and consider whether the actions of the Government of Egypt (GOE) are consistent with international good practice with respect to the laws affecting NGOs. According to various reference books on this subject, the actions of the GOE in the case against EOHR and Mr. Abu Sa’ada and the general rules applicable to foreign fundraising in Egypt are unduly harsh in several important respects.

General Situation Regarding EOHR under Law No. 153.

The Egyptian Organization for Human Rights has been in existence for many years, but it was never allowed to register under the predecessor to Law No. 153 of 1999. The new law appeared to open up the possibility that EOHR would be permitted to register, but that seems not to have happened. This failure to register EOHR is inconsistent with international good practice, as suggested in the World Bank’s Handbook on Good Practices for Laws Relating to Non-Governmental Organizations (Discussion Draft 1997) (hereinafter Handbook). For example, in Section 3 of the Handbook, it is made clear that NGOs should be allowed to register in procedures that are relatively quick and easy. The rationale behind this maxim is that laws affecting NGOs should make it possible for people to exercise the freedom of association guaranteed by international human rights instruments. Without easy access to the procedures for obtaining legal personality, there are burdens placed on this most fundamental of existing freedoms.

Fundraising

Law No. 153 of 1999 prohibits NGOs from accepting foreign grants without the permission of MOSA. See Law 153 of 1999 §17. That law permits MOSA to dissolve an organization that receives funds from overseas without having received permission. See Law 153 of 1999 §42. In addition, the Military Decree, under which Mr. Abu Sa’ada was charged, creates a criminal sanction for failure to notify MOSA in advance. See Military Decree No. 4 of 1992 §1.1. It is therefore necessary to consider whether a requirement that NGOs seek advance permission before receiving foreign funds is in accordance with international good practice

According to the position taken by the Guidelines for Laws Affecting Civic Organizations (prepared for the Open Society Institute) (hereinafter Guidelines), all NGOs should be allowed to engage in any legitimate fundraising activity. See Guidelines section 7.1. Although it is reasonable for the government to exercise some oversight over fundraising, the principal need for such oversight is to protect the public from fraudulent activities. Thus, the government might legitimately require an NGO that is going to ask for funds from the general public to register a campaign and comply with other procedures, such as wearing badges, providing literature about the organization, etc. General fraud and other criminal laws may be used to sanction NGOs that deal unscrupulously with the public, but only after fraudulent acts have been committed.

The World Bank Handbook reinforces this position. There it is made clear that not only should the law permit organizations to raise money at home, they should also be allowed to seek funds from donors overseas. That is particularly important in a developing country, such as Egypt, where access to foreign funds is important for meeting accepted social and economic goals. Under the principles stated in the Handbook, properly registered or incorporated NGOs should be allowed to accept money from foreign donors as long as all generally applicable foreign exchange and customs laws are satisfied. See Handbook section 36.

What these principles or international good practices mean is that foreign fundraising should be seen as an appropriate fundraising activity for any organization in any country. Thus, the restrictions that might legitimately be applicable to such fundraising are very limited. It is obviously necessary for appropriate rules regarding transparency and accountability for all funds of an organization to be in place, but advance approval for all foreign grants is an unduly restrictive way of dealing with the necessary oversight.

Criminal and Other Penalties

The next issue is appropriate sanctions for law violations. It is appropriate to have general sanctions in law for illegal activities. An NGO should be subject to such sanctions, just as other legal and natural persons are. Examples include penalties and sanctions under contract, tort, and criminal laws. In addition, a government must also have sanctions at its disposal that can be used when NGOs violate the laws that apply specially to them (e.g., sanctions against directors of NGOs who engage in self-dealing transactions).

All sanctions applied to NGOs should be proportionate to the offense. In addition, they should be “graduated, their imposition subject to appeal, and, in some instances, such as when criminal sanctions apply, should be enforceable only through a court order.” Guidelines section 8.7. It is important also to guard against a potential abuse of administrative discretion in the application of sanctions by making their use appealable to an independent court.

Setting up a regime in which sanctions are graduated according to the severity of the legal violation would be consistent with the principles described. However, such a gradation of sanctions does not exist for Egyptian NGOs if they fail to seek permission for foreign grants. They can either be dissolved – an admittedly harsh sanction for an organization – or their principals can go to jail. Either of these results would clearly conflict with the statements of good practice referred to above. Egyptian Law No. 153 should therefore be promptly amended to reflect the principles as here discussed and the Military Decree, under which Mr. Abu Sa’ada was charged, should be amended to remove the sanction against receiving foreign funds without permission.

Conclusion

Given the general principles discussed in this note, the use of a criminal sanction carrying a sentence of lengthy incarceration to address the behavior complained of in the case against Mr. Abu Sa’ada would appear to be excessive. This is particularly true where lesser sanctions, such as reasonable monetary penalties, might have been used punish the single infraction complained of and to deter future violations of the law. Receiving and spending money on a legal aid project would seem to be legitimately within the purview of the activities of EOHR. The act complained of – failure to notify MOSA prior to the receipt of a grant from overseas that was used for legitimate purposes – appears to be a rather trivial act and one that should in no way be subject to the severe penalties presently available in Egyptian law.

Postscript

During the time that Law No. 153 was being developed, the International Center for Not-for-Profit Law had the opportunity to prepare a report on the legal and regulatory environment in Egypt for the benefit of Egyptian NGOs and the Government of Egypt. The Report provides a critical analysis of the then-existing Law No. 32 against the backdrop of international principles. The case brought against Mr. Abu Sa’ada and the government’s failure to allow EOHR to register make clear that the new law and the government’s interpretation of it are far from desirable when viewed from the perspective of international good practice. The Report on Law 32 and how it might be changed to better reflect international principles for laws affecting NGOs may be accessed by using the hyperlink given below.

For more information on this subject please refer to: 

 

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