29.10.2006


Much has been written about Russia's new NGO law, which has now caused many NGOs to temporarily suspend their programs. However, we found that the vast majority of the articles either made sweeping generalizations of the law as "undemocratic" or made sweeping justifications for it. Almost none attempted to delve deeper into the issue to explain why some NGOs (political and non-political alike) easily completed registration and some didn't. Therefore, SRAS commissioned Audrey Wood, a freelance journalist and translator currently living and working in Moscow to research and write the following report objectively analysing the complex legal and organizational issues at play.

Audrey Wood graduated from the University of Pittsburgh in August 2006 with a BA in Political Science and a certificate in Russian and East European studies. She plans to later pursue graduate studies in Slavic linguistics, literature, and history.
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The Ministry of Justice is overseeing the NGO registration.Enforcement of the
New NGO Law:
A Deeper Look
By Audrey Wood

The first snows of the season have fallen on Moscow and some foreign nongovernmental organizations (NGOs) in Russia are feeling the chill of amendments passed to Federal Law #7-FZ On Nonprofit Organizations. These amendments, which do not differ substantially in theory from legislation already active in most western countries, are nevertheless feared to have been born from a politically charged belief that the Orange Revolution was fueled by foreign-funded political organizations operating in Ukraine. Thus, the new requirements serve to prevent a similar occurrence from happening in Russia by regulating the membership, financing, and activities of foreign NGOs in Russia.

These amendments were adopted in January 2006 and became effective on April 17, 2006, but their real consequences only began to surface on October 18, when the deadline for re-registering expired. Dozens of NGOs have been forced to suspend their programs (they are still allowed run their offices: to answer phones, pay salaries, etc.) and may not resume these activities until they meet the new requirements.

The law has two main aspects: new registration procedures and supervisory procedures.

The law defines a foreign nongovernmental organization as an organization founded outside of the Russian Federation that is not intended for generating profit and distributing it among its members and whose members do not belong to any governmental agencies. Foreign NGOs hoping to begin working in the Russian Federation (but not wishing to form Russian NGOs) must now first establish a branch or representative office in Russia and register it as a legal entity with the Federal State Registration Service within three months of making the decision to establish the branch. This decision must be specifically allowed by the charter of the NGO’s main organization, for example, with a clause allowing the organization to open offices in foreign countries, and also must be set forth in a board resolution explicitly stating the board’s authorization of the opening of a branch or representative office in Russia. Foreign NGOs that have been working in Russia for years have thus been compelled to re-register their branches and representative offices or operate without governmental approval (the consequences of which are unclear but undoubtedly not positive). The required documentation for registration is extensive and must be submitted as a single packet to the Federal State Registration Service in both the official language of the organization’s home country and in Russian. All documents must be notarized and the foreign language version must be apostiled as well.

Required Registration Materials

  • An application signed by an individual authorized by the NGO's board of directors (the applicant) that includes his/her surname, first name, patronymic (if any), place of residence, and contact telephone numbers;
    • Details on the head (director) of the branch/representative office and the head of the foreign NGO must be given;
    • The name and location of the foreign NGO, as well as the purposes and goals of of the organization and the types of activities carried out in pursuit of those purposes and goals;
  • Three copies of the organization’s constituent documents (the documents required by the NGO's home country in order to be recognized as a nonprofit organization; in the US, these are the articles of incorporation and bylaws; in other countries, it may be simply a charter);
  • Two copies of the resolution to create the branch/representative office and the resolution approving the constituent documents of that office, indicating the elected bodies who passed the decision (usually a board of directors);
  • Two copies of a report giving complete passport information of all founders
    • Realizing that many organizations were founded decades ago by scores of official founders (some now deceased), the registration service has allowed some organizations to simply specify if full information could not be found after a good faith search;
  • A document showing that the state registration fee has been paid;
  • The address of the NGO's operating agency (to be used by the government to communicate with the organization via post);
  • If the name of the NGO uses or incorporates any names or symbols protected by the intellectual property or copyright legislation of the Russian Federation (which includes the words "Russia" and "Russian") or the full name of another legal entity, a document confirming the authority to use these names or symbols must also be submitted;
  • An excerpt from the respective country's register of foreign legal entities (if one exists) or an equivalent legal document (such as a certificate of good standing from a U.S. state) certifying the founding organization’s current legal status;
  • Abstracts of any legislation regulating the formation of NGOs applicable at time and place the NGO was founded (for example, if the NGO was founded in New Jersey in 1979, abstracts from the applicable state statute under which the NGO was organized) should be submitted.

Aleksei Zhafyarov is head of the Registration Service's Department for Political, Nongovernmental and Religious Organizations, which is directly responsible for the registration process.It should be mentioned that some of these documents may be quite lengthy and translation and certification of each represents an expense incurred by the NGO. It should also be noted that some organizations, regardless of their known political views, have completed this process on time and without great difficulty. However, others have complained that the process is lengthy, overly complicated, and exacting and that different reviewing officials at the FRS have different standards for what is acceptable.

Many of the most common complications stem from differences between Russian legal and administrative procedures and those of the organization’s home country, as well as from translation issues. For organizations founded in Britain, Canada, the U.S. or other common law countries, the process can be exceptionally difficult; the fundamental legal bases and procedures in those countries differ substantially from Russia's civil law system. For example, in common law systems it is not expected that the organization’s charter specify the Board of Directors’ authority to found a new branch office in another country, whereas in Russia, the opening of new offices is expressly prohibited unless stated in the charter. The Russian registration authorities’ requirement that the foreign NGO’s charter contain such an express statement, in effect, forces many foreign NGOs to amend their charters, creating an extra step in the registration process for these NGOs.

This is certainly not the only legal conflict at play. Another example is the requirement to submit a notarized extract from the foreign statute authorizing the creation and existence of the foreign NGO. In the United States, notaries may not notarize laws (they notarize the stamp or signature on a document). Another example is that Russian law requires a notarized copy of an extract from the home country’s "register of foreign legal entities," which does not exist in the U.S. Kim Reed, an American NGO lawyer in Moscow who represents several foreign NGOs registering in Russia, explained this conflict to a high-ranking Registration Service official, who continued to insist that such a document be provided anyway (the compromise that has been worked out is that American organizations must present an apostiled copy of a Certificate of Good Standing from their state of incorporation). Most foreign NGO's have used face-to-face meetings with the FRS to explain these types of difficulties and negotiate compromises satisfactory to the FRS. It is hoped that in the future, the FRS learns from these meetings and promulgates guidelines that account for these differences in documentation across countries.

Translation requirements are also problematic. For example, the official organization name used for registration must indicate the NGO's name, organizational structure, location, and the type of activities it conducts. Taking a hypothetical example, if the Perm representative office of the English Society, a foreign NGO offering educational services, needed to register, it would need to submit documents with the following official name: "Representative Office of the Nonprofit Nongovernmental Educational Organization 'English Society' in the Russian Federation." If the word "Perm" is mentioned in the title, this is grounds for rejection of the application because the FRS takes the position that all representative offices and branches are governed by RF law, not the law of the city in which they are located. Because all translations must contain such official names, this effectively mandates that the original charter in the organization's home country must be altered to the cumbersome Russian standard. Of course, most organizations have not changed the name of their original charter, but instead have individually explained to officials why the requirement cannot be met in their case. Further, the name of the organization must be transliterated into Cyrillic rather than translated into Russian; the latter is another grounds for rejection of the application.

Still another possible complication lies in the new authority of the Federal Registration Service to deny registration on other, ill-defined grounds:

  • If the purpose and goals for creating the foreign NGO branch conflict with the Constitution or legislation of the Russian Federation;
  • If the purpose and goals in creating the foreign NGO branch threatens the "sovereignty, political independence, territorial integrity, national unity, unique character, cultural heritage, or national interests of the Russian Federation."

One of many protests organized by the Russia-Chechen Friendship SocietyThere is no specific legal definition of terms like "unique character" or "national interests." Thus, the decision of when and whether to enforce these clauses is left to the Registration Service. Although a representative case has yet to occur under the new amendments, the Russian-Chechen Friendship Society was closed down in February on charges of "inciting political hatred" and "extremist activities" as well as failure to take the word "Russian" out of their official name.

The registration requirements are complicated and have unexpected legal pitfalls. Thus, a last repercussion lies in that most NGOs are staffed and headed by experts in their fields (business, medicine, social work, ecology, etc.), but often not by people with legal backgrounds. Foreign branch and representative offices are often headed by foreigners with little experience in dealing with what can seem like a monolithic bureaucratic structures. Few NGOs have large funds for legal counsel (although many law firms and legal organizations have provided legal advice regarding registration on a pro bono basis up to now). Thus, the practical fulfillment of these requirements can be daunting.

If an organization is denied for any reason, it may correct the offending portions of its application and resubmit the packet or by appeal the denial to a higher governmental body (though which one is not currently clearly spelled out; it could be to a court, possibly to the Ministry of Justice). There is no limit to the number of times an organization may resubmit and, though some may have to resubmit applications several times, it is generally assumed that most NGOs are eventually likely to be registered. However, the Federal Registration Service has thirty days to consider each submission, and the branch/representative office much cease its activities until its registration is approved, meaning that some NGO’s will not be able to provide the services for which they receive grants and funds from abroad.

As of October 26th, 113 NGOs have been registered. This is estimated to be between 20 and 50 percent of the NGOs operating in Russia. The wide estimate stems from the fact that before the new law was passed, no concrete list of all NGOs operating in Russia was maintained. Officials point to this as one justification for the new law.

Once registered, NGOs will need to submit to new supervisory processes which include:

  • Submitting annual reports to the Registration Service detailing the organization's activities, the members of its governing bodies, and all incoming financial resources, as well as documenting every expenditure, no matter how small, and the source of the funding for each expenditure;
  • Submitting quarterly projected expense reports which indicate the volume of incoming financial resources, how the funds will be allocated, and for what purpose;
    • This must also include a list of programs the organization intends to implement in Russia and an account of all funds the organization plans to allocate to individuals or organizations, , as well as the source(s) of the funds for each program;
  • Allowing members of the Federal Registration Service to attend any organization events, meetings or possibly even internal discussion sessions;
  • Upon request from the Federal Registration Service, submitting copies of all organization resolutions, financial accounting documents in addition, and/or a report confirming that the group has adhered to the goals and planned expenditures stated in any other document.

The quarterly projected expense reports leave the most room for complications and conflicts in this process. If an NGO is unable to implement a program on the reported date, or simply wishes to change the date of a program, the law is generally interpreted to mean that it must submit an application to change the date to the Federal Registration Service, which then has ten days to approve this request. It is not clear if the FRS has the right to deny the request, or if the failure of the FRS to approve the request in ten days constitutes a denial, since the law states only that it has ten days "to approve" the request. The FRS may also reject any program or activity deemed contrary to the NGO's stated goals or the vaguely defined concepts such as "unique character of the Russian Federation" mentioned above.

An October 25th meeting at the American Chamber of Commerce in Russia allowed representatives of various NGOs to meet informally with the head of the Department of Methodologies and Supervision of State Registration and Activities of NGOs. This department will oversee the new supervisory procedures and is also part of the Ministry of Justice. Neither side asked very many questions at this meeting and most NGOs expressed confidence they could learn to comply to the new reporting procedures, although they found them a very large burden, added expense and a hindrance to their organizations' overall ability to focus on their mission and activities.

NGOs benefit society by spreading awareness of social problems and taking measures to help correct them. Being able to respond to changes in their fields and to react quickly to emergencies stemming from these problems are key features of effective NGOs. If this power is curtailed, these valuable organizations, who currently work to improve Russian business, support AIDS prevention and treatment, to help Russia's overflowing orphanages, and perform many other needed activities, may be relegated to only holding press conferences or worse yet, to simply being names on office doors. While some have successfully completed registration, the rest have had to turn all their energies to reaching just this one goal. So, although the registration deadline has passed, only time will tell how challenging it will be for foreign NGOs in Russia to continue operating with these new registration and supervisory controls.

Kim Reed, an American NGO Lawyer in Moscow, Josh Wilson of The School of Russian and Asian Studies, and the legal department of Alinga Consulting Group contributed to this article.

Find Out More
A shortened version of this article in Russian (translated by SRAS)
Website of the Federal Registration Service (in Russian)
Download the list of registered NGOs (in Russian)
The NGO amendments in Russian and English
Article comparing US NGO laws and Belorussian NGO laws
Study Russian in Russia

 

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