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The International Journal
of Not-for-Profit Law

Volume 3, Issue 3, March 2001

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

Table of Contents

Letter from the Editor

Articles

The State, Laws and Nongovernmental Organizations in Bangladesh
By Mokbul Morshed Ahmad

China's Nongovernmental Organizations: Status, Government Policies, and Prospects for Further Development
By Guangyao Chen

The Czech Government and NGOs in 2001
By Petr Pajas

The Italian Legal System Relating to Not-for-Profit Organizations: A Historical and Evolutionary Overview
By Alceste Santuari

Reviews

The Legal System Between the State and Civil Society
By Jurgen Nautz, Emil Brix, and Gerhard Luf
Reviewed by Thomas Notter

Foundations of Charity
By Charles Mitchell and Susan R. Moody
Reviewed by Karla Simon

Case Notes

Middle East and North Africa:
Egypt

North America:
the United States

Country Reports

Asia Pacific:
Regional
| Australia | Cambodia | Indonesia | Japan

Central and Eastern Europe:
Regional | Albania | Lithuania

Latin America and the Caribbean:
Brazil | Chile | Venezuela

Middle East and North Africa:
Yemen

Newly Independent States:
Belarus

North America:
the United States

South Asia:
India

Sub-Saharan Africa:
Botswana
| Ghana | South Africa

Western Europe:
France | Germany

Self-Regulation Reports

Northern NGO Guidelines and Codes of Conduct: Conflicting Rights and Responsibilities?
By Julie Gale

Building Trust in NGOs
By Simon Heap

Nigeria: Draft Code of Standard Practice for NGOs

Switzerland: New Accounting Rules for Not-for-Profit Organizations (NPOs)

International Grantmaking

Bar Association Task Force Revisits Private Foundation Rules: Implication for Foreign Grantmaking
By Richard S. Gallagher

Donating to U.S. Charities
By Arthur B.C. Drache, Q.C.

The Council on Foundations Secures Information Letter that Permits Use of Expenditure Responsibility for Most International Grants

 

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Editorial Board

Country Reports: Newly Independent States

Belarus

Commentary to Decree No. 8 of the President of the Republic of Belarus

By Elena Tonkacheva and Alesya Vidruk
The Independent Society of Legal Research, a local partner and grantee of ICNL.

On March 15, 2001, Decree No. 8 of the President of the Republic of Belarus of March 12, 2001 “On Certain Measures to Improve the Order of Receiving and Using Foreign Aid” was published in official publications. Implementation of the Decree will materially worsen the standing of the Belorussian “third sector” and be a significant hindrance to its normal development and operation.

The strategic intent of this document is to attempt to impose an unprecedented level of government control over the activities of NGOs and their financial support from foreign and international organizations which finance programs and projects of independent public associations. Based on provisions in the Decree, this objective will be accomplished by the introduction of a system for Belorussian organizations requiring state permission for the use of funds received from foreign governments, international organizations and individuals, the imposition of total state control over all programs and projects being undertaken through support from foreign organizations, and the introduction of repressive measures against organizations (leading to their very dissolution) and their managers.

Public associations of citizens (which, for purposes of this article, do no include political parties, trade unions, and religious organizations) are the primary recipients of foreign aid. This situation is a result first of all of the lack of internal resources within the Republic of Belarus which could be allocated to charitable activities. In the current political situation, access to government resources (what little there are) allocated to charitable projects is given only to pro-government organizations, which by their essence are not voluntary associations of citizens but merely echo the political will of those in power. As a result, the only sources for obtaining a realistic source of financing medium and large-scale programs and projects of public associations have been and continue to be international and foreign organizations and individuals.

It should be noted that even before issuance of the Decree, the terms regarding the receipt and use of foreign aid were quite clearly set forth in the Belorussian legislation. The Decree sets forth provisions which strengthen state control and limit opportunities or public associations. Article 23, for example, of the Law on Associations states that monetary aid and property are the result of “voluntary contributions.” These monies and property may be only used towards achieving the objectives of the association’s charter. Paragraph 4 subpoint 3 of the Decree forbids those public associations which have as their purpose of operations work regarding electoral law from receiving financial support from any foreign governments, international organizations and individuals. In accordance with the Law on Income and Profit Taxes, the tax authorities are authorized to oversee the appropriate use of an association’s funds in accordance with its charter. From now on, however, oversight over an association’s use of its funding can be conducted by the Committee of State Control, the Ministry of Foreign Affairs, the State Tax Committee, the State Customs Committee, the State Financial Investigative Committee and its local offices, the Department of Humanitarian Activities of the President of the Republic of Belarus, and other state entities. In other words, everyone will be able to control these associations as well as have the power to impose sanctions. For example, all of the following actions will henceforth be legal violations subject to administrative (civil) penalties: i) use of foreign aid by recipients prior to receiving authorization from the government, ii) use of foreign aid for activities prohibited in the Decree, and iii) failure to deposit foreign aid donated in monetary form in a bank of the Republic of Belarus within 5 days after its receipt or import into the territory of the Republic of Belarus. Any of the above listed government agencies will be able to write up reports regarding the violation of these directives.

Unions, foundations, public associations, and other non-governmental organizations are subject to liquidation, even in the event of a one-time violation, for the use of foreign aid for purposes prohibited or not provided for in the Decree. This contradicts Article 29 of the Law on Public Associations, since a public association can be liquidated only by order of a court for only the following: activities aimed at overthrowing or forcibly changing the constitutional regime; violating the integrity or security of the government; spreading war propaganda or violence; igniting national, religious or racial hostility; undertaking actions which might negatively affect the physical and psychological well-being of citizens; allowing repeat occurrences of violations in the course of one year, for which a written warning had been issued; and legal violations committed by the association’s founders at the time of registration. There are no other legal grounds allowing dissolution of a public association.

The procedure for registering foreign aid is to be established by the Department of Humanitarian Activities. Considering that prior regulations regarding registration, storage and distribution of humanitarian aid left much to be desired, one can only hope that the procedure for registration of foreign aid will not worsen an already difficult situation for public associations. Moreover, the Decree entrenches the selective approach used thus far by the authorities in granting tax and customs benefits and allows the president to decide who will receive tax benefits and who won’t. This case-by-case system of granting privileges serves as an effective means of influence over objectionable organizations.

The legislation of other countries contains examples of additional statutory regulation regarding the receipt by NGOs of foreign assistance. However, in every instance of such supplementary regulation, the primary objective of the law is to provide the recipient of the assistance with substantive tax benefits after successfully meeting the criteria of the statute. These laws do not allow or call for benefits to be provided to particular beneficiaries (i.e. at the discretion of the president), interference in the activities of associations, required “authorizations” to begin using the assistance, or oversight by police bodies to verify proper use of the assistance (assuming no criminal activities). Moreover, improper use of the tax benefits generally results in their revocation (as opposed to the variety of fines and administrative sanctions set forth in the Decree).

The Decree is rife with contradictions and illegalities under Belorussian law. It is senseless even to analyze this document from the perspective of its legal coherence, its adherence to the constitution, or its value in compensating for gaps in current legislation. From a constitutional point of view, it allows blatant interference into the activities of public associations. From a civil law point of view, it is an outright violation of the freedom of contract. Once again the authorities are attempting to demoralize the third sector and divert the active segments of society from participating in political activities by creating additional barriers to prevent them from organizing and functioning effectively. This is a standard tactic which was already tested in the spring of 1999 when Presidential Decree No. 2 was issued. It succeeded in keeping the senior-level individuals and leaders of NGOs, under threat of serious legal sanctions, occupied with restructuring their organizations to bring them into compliance with the new legislative changes. Based on the prior experience of Decree No. 2 and the timing of Decree No. 8 earlier this month, it is clear that the true objective of the Decree is to create additional instruments of influence over the socially and politically active segments of society during the period leading up to and following the presidential elections.

 

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