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Croatian Constitutional Court Strikes Down a Number of Provisions in the Law on Associations

Dr. Dragan Golubovic
International Center for Not-for-Profit Law, Budapest

Coinciding with the sweeping political changes in the Republic of Croatia, the Constitutional Court
struck down provisions of eight ar ticles of the Law on Associations (“the Law”). This development
was the result of a number of suits challenging a total of twenty-four articles of the Law.
1 The
applicants, including the Croatian Legal Center and CERANEO as well as other organizations
and individuals, successfully challenged the m andatory registration requirement, the conditions
under which foreign legal and natural persons can be founders of an association, the mandatory
content of the association’s by-laws and, in conne ction with it, some of the underlying reasons for
the denial of registration and dissolution of an association.
2

Mandatory Registration Requirement
The Law on Associations (Official Gazette, no.70 of 1997) provided for the mandatory registration
of associations and their umbrella organizations, and prescribed fines for those organizations that
engaged in any activities before they were regist ered. These provisions were challenged on the
ground that they violated §11 of the European Convention for the Protection of Human Rights and
relevant provisions of the Croatian Constitution. The applicants contended that the provisions
imposed excessive restrictions to freedom of association and hence fell short of meeting the
proportionality test established by the Europ ean Court (and also embraced by the Constitutional
Court in its decision: U-I-1156/1999).

The Court principally concurred with the applic ants on this point, but provided an interesting
elaboration of the relation between the mandatory registration prescribed in the Law and the
permissibility of informal associations. In the Co urt’s view the underlying rationale for mandatory
registration, and other provisions in the Law issu ing from such a requirement, is to protect
associations and third parties that seek to ent er into legal transactions with associations. Hence,
the Court concluded that restrictions imposed upon the exercise of the freedom of association by
mandatory registration are sought to accomplish legitimate objectives: to protect the rights and
freedoms of others and the public order (§11(2) of the European Convention and §16 of the
Constitution).

However, the Court pointed out, just because the Law calls for mandatory registration, it does not
follow that informal associations are not allow ed to exist and operate – as was claimed in the
Croatian Legal Center and CERANEO’s suit. While it is true that the Law sought to address
formal associations only, it did not override those provisions of the Law on Administrative
Procedure and the Law on Civil Pr ocedure, which specifically recognize the right of informal
associations to be a party in legal and administrati ve proceedings in some instances. From this,
the Court inferred that both informal and formal associations are recognized in the current legal
framework and that it is up to their founders to decide whether they should register or not.

Admittedly, the Law neglected the fact that inform al associations are permissible in Croatia.
Accordingly, the Court held unconst itutional those provisions in the Law that seemed to indicate
otherwise. Specifically, it struck down provisions that prohibited associations and their umbrella
1 Decision of the Constitutional Court of February 3, 2000, published in the Official Gazette No.
20 of February 16, 2000.
2 The Croatian Legal Center and CERANEO’s jo int suit (U-I-149/1999) posed the most
comprehensive challenge to the Law.

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organizations from engaging in any activities before they were registered (§§ 8(1)(4)(5), 14(3),
37(2)) and which prescribed fines for such activities (§35(1)(4)(5)).

Foreigners as Founders of an Association
The Law on Associations provided that foreign ci tizens who permanently reside in Croatia, or who
have legally resided in Croatia for more than one year, can be founders of a registered
association, under the condition of reciprocity. The reciprocity requirement also extended to
foreign legal persons. These provisions were challenged on the same ground as the mandatory
registration requirement: they did not satisfy the proportionality test.

The Court began its analysis by stating that a more stringent legal regime for formal (registered)
vs. informal (unregistered) associations does not necessarily violate §11 of the Convention and
pertinent provisions of the Constitution. However, in this particular case the Court found that the
reciprocity requirement set forth in §10(3)(4) of the Law violated §11 of the Convention and §43 of
the Constitution, which guarantee the freedom of association to “everyone” and “citizens”
respectfully without further reference to the countr y of citizenship or other conditions. The Court
held that “there are no legitimate reasons which would justify restrictions imposed on foreign
domestic and legal persons in exercising the fr eedom of association … which are attached to the
actions of their respective states.” In other word s, the actions or laws of one’s state should not
have any impact on his/her freedom to associate in a foreign country.

Interestingly, the Court also questioned the validity of the residency requirement, which was also
set out in §10(3), but fell short of delivering an opinion as to whether this requirement – in addition
to the reciprocity requirement – violated §11 of the Convention. Nevertheless, by holding the
entirety of §10(3) unconstitutional, the Court basically placed domestic and foreign NGOs on
equal footing.
3

Mandatory Content of By-laws
The Court stated that freedom of association also encompasses the freedom of founders to
regulate the association’s internal governance. Following that notion, it held §11(3), which
prescribed the mandatory content of the by-laws, to be unconstitutional because it failed to meet
the proportionality test. In particular, the Co urt referred to mandatory provisions regarding
membership fees, members’ liability, comprehensive internal govern ing structure, the liability of
the members of the governing bodies and the deci sion-making procedure as provisions “which
could have been left to the discretion of founders or addressed in other acts of internal
governance.” However, the Court did not suggest any kind of rule or principle for deciding which
kind of provisions could be mandated in the By-laws and which could not.

The Court also found that the overly detailed mandat ory content of the by-laws, in connection with
some of the underlying reasons set forth in the Law for the denial of registration and dissolution of
an association, conferred upon t he registration authority a great deal of unwarranted power.
Hence, it held unconstitutional §17(3), which pres cribed that the registration authority shall deny
registration when an association failed to adjust the provisions of its by-laws within the prescribed
deadline. The Court also held §§28 (1) and 37(3) to be unconstitutional. These provisions
required that an association be dissolved if its by -laws do not comply with the provisions of the
Law.

CONCLUDING REMARKS

The decision of the Constitutional Court poses a significant development that potentially has a
cross-border impact on at least two scores. Firs t, the legal avenue that the Court pursued in
3 Article 10(3) of the Law of Associations reads as follow: “A foreign person which permanently
resides in the Republic of Croatia, or is granted a business visa or residency permit for a period
exceeding one year, can be a founder of an association in the Republic of Croatia under the
condition of reciprocity”.
2

establishing the permissibility of informal associations may prove to be a useful interim solution
for those countries in th e region whose laws on associations still fall short of specifically
recognizing informal associations. For example, in Montenegro the new Law on Non-
Governmental Organizations, similarly to the Croatia n provisions that were struck down, provides
for mandatory registration and prescribes fines for associations that engage in any activities
before they are registered. On the other hand, similarly to the Croatian law which that country’s
Constitutional Court used as a rationale to strike down the mandatory registration provision, the
Montenegrin Law on Civil Procedure recognizes the right of informal associations to be a party to
proceedings at some instances.

Secondly, following the strict reading of the la nguage of §11 of the European Convention, the
Court placed foreign and domestic legal and natural persons on entirely equal footing as founders
of an association. [For a related discussion of recent developments in the European Court of
Justice concerning governmental discrimination against foreign nationals wishing to establish
NGOs, see K. Simon, Nationality-based Requirements for NGO Registration , International
Journal for Not-for-Profit Law, Vol. 2, Iss. 2;
www.icnl.org ]. It will be interesting to see the extent
to which this path will be followe d in the pending NGO legislative reforms in Croatia. It will be
especially interesting to see whether the new NGO draft will make any reference to the residency
requirement as a prerequisite for foreig ners being founders of an association.

3