Mr. Remias's article briefly summarizes the initial Soviet concept of NGO regulation, details the most recent initiatives regarding the regulation of NGOs within Central Asia, and isolates some of the specific problems facing these reform efforts.

Richard Remias is a lawyer (Univ. of Akron '95) and currently the Regional Director of Central Asia for the International Center for Not-for-Profit Law (ICNL). He has published various articles and lectured on legal reform in the NIS. Mr. Remias formerly served as a Legal Liaison for the American Bar Association’s Central and East European Law Initiative (ABA/CEELI) in the Republic of Belarus for fourteenth months. He now lives in Almaty, Kazakhstan where he directs a region-wide legislative reform project in the Central Asian countries of Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan and Turkmenistan.

Preface

Over the last decade, the surge in NGO development in the former Soviet Union (FSU) has shown that the laws of the previous regime are inapplicable to the contemporary forms of NGOs. The shortcomings of post-Soviet NGO legislation were highlighted by the ability of government officials to utilize their arbitrary powers in combination with legal ambiguities to restrict NGO development. Even now while most governments in the world community recognize the importance of NGOs and attempt to promote the non-commercial sector, Central Asian countries generally remain cautious about NGO law reform and lag in its development.

Currently, legislative reform initiatives exist in four of the five republics, and realizable improvements are being made. This article briefly summarizes the initial Soviet concept of NGO regulation, details the most recent initiatives regarding the regulation of NGOs within Central Asia, and isolates some of the specific problems facing these reform efforts.

Prior to independence, non-governmental organizations in the FSU were regulated by the All-Union Law on Public Associations. This was Soviet legislation that governed the registration and regulation of political parties, trade unions, and all non-governmental membership organizations. Although these types of organizations are very different, the All-Union Law on Public Associations applied the same rules and procedures to regulate all non-governmental entities, regardless of their purpose. This was due in part to Soviet unfamiliarity with the contemporary organizational legal forms of NGOs.

The general intent of the All-Union Law was to regulate social movements that operate either under the auspices of, or in opposition to the government. This intent coupled with legal ambiguities gave way to the subjective interpretation and strict regulation of NGOs. However, such regulation is misguided. Political parties, trade unions, and NGOs may be similar in that they are all membership organizations, but they are very different in form and in purpose.

Political parties, trade unions (and perhaps even religious organizations) can be viewed as groups that are created in the anticipation of confrontation. For instance, political parties are created to match other political forces that are vying for control or influence. The same is true for trade unions. Membership in a trade union is, in a sense, membership to an army of workers that are united in their pursuit of fair treatment. In the FSU, given that all enterprises or industries were once state-owned, these unions were not necessarily confronting businesses or business owners but rather the state itself. Certainly the FSU and countries like Poland and South Korea demonstrate that united workers can be an agent of political change. Thus, governments are inherently cautious of such social movements and attempt to strictly regulate their activity. Conversely, NGOs are generally non-commercial organizations that carry out some activities which are either in the public interest or in the interest of the members of the organization. As such, these organizations are not confrontational entities or at least not based around the potential of certain conflict.

Therefore, the application of the All-Union Public Associations Law was restrictive. All forms of associations had to be registered with the Ministry of Justice, which had almost unlimited power in the regulation of such organizations. The government not only regulated the registration process but went further to regulate the activity of these organizations. For example, according to the standard public associations' law, activities of NGOs are limited to the geographic area covered by their registration (international, all-republican level, multi-regional, or local). Expansion of activities required re-registration of the organization and, as one would suspect, it was more difficult to register international and nation-wide organizations than local organizations.

After independence, the countries of Central Asia, adopted separate laws governing public associations. In effect, however, these were largely the same laws as their All-Union predecessor. Indeed, in most cases the text of the laws was not changed. The names of the laws were changed to reflect independence but the substance -- the ambiguous regulations and arbitrary powers of government -- remained the same in every country. In fact, with the increased power of the ministries, governments started enacting further restrictions that stemmed from the public associations' law.

International standards of NGO legislation do exist and are supported by international law. This area of law consists of international agreements and documents, the decisions from international tribunals, and lastly, international custom — how a country regulates NGOs in practice. The international standards on NGO legislation are primarily a result of the recognition of human rights, namely the right to freely associate. Legal recognition of ‘freedom of association’ stems from the Universal Declaration of Human Rights, and subsequent agreements such as the International Covenant of Civil and Political Rights (ICCPR). Citations to these founding agreements are also found throughout various documents of the Organization for Security and Cooperation in Europe (OSCE), as well.

Also stemming from the international agreements are a string of decisions from international tribunals, which reiterate the freedom to associate. These decisions elaborate on the basic text of the original agreements. One decision in particular holds that "citizens should be able to form a legal entity in order to act collectively in a field of mutual interest, [this is] one of the most important aspects of the right to freedom of association, without which that right would be deprived of any meaning.... Certainly, states have a right to satisfy themselves that an association's aims and activities are in conformity with the rules laid down in legislation, but they must do so in accord with [international law]."

Separate but related to the international documents and tribunal decisions are the international norms, or practical examples of NGO regulation from other countries. Compared to these practical norms, one can again argue that the public associations' law is substandard. Ideal legislation generally sets forth a framework that allows for groups of people to be recognized as legal entities. Accordingly, there is, in the accepted practice, a set procedure for registering NGOs. This is, in effect, a mechanism for the creation of a non-profit legal entity. These legal entities are obliged to operate in accordance with the various laws of the jurisdiction the same as any juridical person. They are responsible for their own operation and have a recognized duty to "self-regulation". Although contemporary systems differ in the manner of their post-registration regulation, there is consistency in this basic concept of NGO creation and self-regulation. That is, unlike the Newly Independent States (NIS) norm of active on-going regulation and monitoring of NGO conduct after registration, the contemporary system does not encourage governmental interference in NGO activity once the legal entity is created.

Restrictions on the right to associate can be identified on the face of certain laws or acts throughout Central Asia. An example of violating legislation was the Administrative Code of Kazakhstan that formerly established quasi-criminal liability for participation in the activities of illegal (unregistered) public associations (including organizations whose activities have been temporarily suspended) (Administrative Violations Code, Article 188-2 [repealed 1999]). This vague wording gave room for subjective interpretation and was used to disqualify a potential presidential candidate in January of 1999. On the surface, the wording of the provision alone defies internationally accepted norms and standards. But its actual application to disqualify a presidential opponent further serves to demonstrate why such provisions are a prima facie violation of international principles. It is also important to note that in the Fall of 1999, the government repealed this provision from the Administrative Violations Code in an attempt to comply with international standards.

These restrictions are not only found in the text of the laws but also stem for the very concept of NGO regulation. To elaborate, the conceptual problem with public associations’ law is that it regulates the creation of the legal entity and its ongoing activity (post-registration). The organization's activity is regulated in terms of its type and geographical scope, and even the nature or content of its activity could be called into question under the law. Analyzing the general public associations' law against international standards, it is clear that this form of regulation runs contrary to international principles as established by international agreements and documents, and decisions from international tribunals. More precisely, the strict and comprehensive regulation of activity infringes on the international right to freely associate.

Based on these observations, it follows that in the case of Central Asia (and the entire NIS), at least one theoretical goal of NGO law reform is to dismantle the active governmental control over NGO activity. Although reformers may disagree on the strategy of reform, there is universal acceptance of the fact that the public associations law needs to be either extensively modified or repealed altogether.

C. Current Regional Initiatives

1. Tajikistan: First Legislative Changes in Favor of NGOs

The legal and economic framework of Tajikistan collapsed under the weight of civil war. After a drawn out process of reconciliation, a coalition government is attempting to restructure the legal framework of the country in order to create stable conditions conducive to economic and social progress.

One example of this restructuring is an ambitious legislative agenda. Pursuant to this agenda, the government had plans to revise the Soviet law on public associations. The first draft law was simply a moderately revised version of the former law. The adoption of this law would not have improved the legal and regulatory environment for NGOs. In fact, the enactment of yet another ineffective and ill-founded law may have worsened the already fragile situation for NGO's.

With support from the local and international NGO community, Tajikistan altered the draft law. The changes reflect positive amendments to the legislation, including provisions that permit associations to engage in commercial activity, loosen the registration requirements, and create a framework for better NGO-Government relations.

In March 1999, Tajikistan also adopted Part I of the new Civil Code. Part I included contemporary organizational legal forms setting the base for an upcoming law on NGOs expected to be adopted in Spring 2000. Drafters of the potential NGO law have also drafted a new law defining charities and charitable activities that is to be submitted before the end of 2000. The new Tax Code has been amended to define charities but will need further revisions before any realizable tax benefits will be afforded to qualifying organizations.

Although Tajikistan has made improvements in legislation in this sphere, the hope for a thriving NGO sector is tempered by the continuing instability of the political situation. Currently, Tajikistan is the poorest of the Central Asian Republics and there are no immediately accessible resources which may feed economic improvement. The government is constantly faced with the pressures of opposition forces based both in and outside their borders. For the time being, the government is retaining its hold on power. But its stability and credibility were further undermined by controversial elections which showed a 96% approval rating for the current President, Imomalyi Rakhmanov.

2. Uzbekistan: First NGO Law

In April 1999, Uzbekistan was the first country in the region to adopt an entirely new law specific to NGOs -- On Non-governmental, Non-commercial Organizations. The new law applies to contemporary NGOs, defined as legal entities that do not pursue economic gain as their main goal. It allows for the establishment of philanthropic foundations for the first time in Uzbekistan, and grants the right to establish NGOs to foreigners as well as to citizens of Uzbekistan.

The new law simplifies the registration procedures for foundations and other non-governmental organizations by requiring less documentation and more limited information. Under the previous legislation, onerous information requirements meant the registration process was long and complicated, with uncertain results.

Despite these positive elements in the new legislation, the new NGO law leaves many important issues unresolved. For example, the law does not adequately define the authority granted to government bodies that are expected to monitor the NGO community. This lack of definition could potentially enable government officials to interfere arbitrarily in NGO activities. Another problematic point is that the law lists a lengthy set of reasons by which the authorities may deny an NGO the right to register. Furthermore, it fails to define clearly the procedures by which an NGO may appeal the denial of this right to a court of law. The new law also contains the restrictive requirement from the previous legislation that an NGO must include in its charter every activity it plans to engage in and requires re-registration every time an NGO plans to change or expand its field of operations.

Most commentators on the new legislation agree that ultimately the law will prove itself in the way it is implemented and enforced by the authorities. Although the government received a degree of international approval for the adoption of the law, at this time the law has yet to be implemented. Nonetheless, the government of Uzbekistan does plan to develop implementing regulations during 2000 and these regulations will demonstrate whether the government and the NGO community will be able to work together effectively implement these positive changes to benefit the third sector in Uzbekistan.

3. Kyrgyzstan: Exchanging Soviet Laws for a Progressive Legal Base

On October 15^th, 1999, Kyrgyzstan enacted a law that could fundamentally alter the regulation of NGOs in the republic -- On Non-Commercial Organizations. Although the law's effectiveness ultimately depends on its implementation by government authorities, the Kyrgyzstan law may be the most progressive of its kind in the entire NIS.

Of notable importance are the provisions under the new law that alter the legal and regulatory environment for NGOs. The previous law regulated the registration and on-going activities of NGOs. It also stipulated outward reporting requirements whereby the NGO would necessarily file detailed quarterly reports on the organization's activity and finances. Like modern regulatory frameworks, the new NGO law sets forth the procedure for registration without limiting the types of activities or requiring detailed accounts on activity. The new law also significantly reduces the costs of registration of NGOs.

While the passage of this law appears to signal good parliamentary intentions, its practical effect may be hampered by forthcoming "instructions" to be issued by the Ministry of Justice. As in many countries, adoption of a regulatory act is often followed by additional decrees or "instructions." The regulatory body charged with execution of the new Kyrgyz law promulgates these subsequent decrees, usually with no input from the public or persons affected. In this case, the promulgating organ is the Ministry of Justice, which in early 1999 issued the controversial Decree #52, that severely restricted NGO activity and placed NGO members under Ministry scrutiny. That decree died with the repeal of the Public Associations' Law, but may suggest that the Ministry is not favorably disposed to relaxed regulation of the NGO sector.

At least for now, the initial steps taken toward legal reform warrants optimism for the NGO community in Kyrgyzstan. But much like in Uzbekistan, the question remains whether the government, and in particular the Ministry of Justice, will follow through with fair and progressive implementation of the new law.

4. Kazakhstan: The First Fiscal Reforms for NGOs

The need for reform in Kazakhstan is recognized and has found support at high levels. In September 1998, and in March 1998, in his semi-annual addresses to the nation, President of Kazakhstan, Nursultan Nazarbayev iterated the need to form "a civil society that presuppose[s], above all, furtherance of the formation, development, and operation of non-governmental organizations."

Pursuant to these mandates, on December 10, 1999, Kazakhstan amended its Tax Code to clarify existing taxation and add new benefits that are applicable to international organizations, certain intergovernmental entities and indigenous non-profits (NGOs). This surprising reform of NGO taxation is unique in the region.

First, the new amendments clarify the status of "grants." Previously, there was an ambiguous provision that stated grants and other forms of humanitarian aid were exempt from income. The former provision left room for arbitrary interpretation and proved problematic for both NGOs and taxation authorities. The amendment to Article 5 mentioned above, now further clarifies the definition of grants. That is, the new wording leaves no doubt that grants from international donors and grants made pursuant to international agreements are non-taxable revenue.

Secondly, as of the effective date of the amendments, January 1^st, local NGOs that receive grant money from international organizations, and the international organizations themselves, are not obliged to pay the "social tax." The social tax in Kazakhstan, much like social security systems around the world, collects money in a general fund that is statutorily distributed as pension and various entitlements to the populace. In Kazakhstan, the employer is required to pay this tax at 26% of the employee's salary. Currently, employees who are being paid from grant funds are now exempt from this tax. Local NGOs and international organizations receiving grant funds will now save 26% on money that was being paid for salaries. In addition, there are new exemptions regarding general application of value-added tax (VAT) and its application to imports.

Although these changes will benefit the NGO sector and the international community, the amendments fail to address the taxation on revenue generating activities of NGOs. As of January 1^st, 1998, NGOs that maintain limited forms of revenue generation are taxed as businesses. This type of taxation is seemingly out of sync with international norms, which generally allow NGOs or non-profits to carry out some form of economic activity in order to allow them to sustain themselves. Presently, virtually all NGOs in Kazakhstan and Central Asia survive on grant funding thus rendering them continually dependent on others. Unfortunately for these local organizations, their existence will continue to be dependent on funding from the international community until further reforms allowing for some economic activity on the part of NGOs are carried out.

5. The Civil Code of Turkmenistan

In Turkmenistan the governmental authorities are resistant to the development of the NGO sector, and consequently do not actively seek NGO law reform. Turkmenistan still maintains the law, "On Public Associations" and allows the Ministry of Justice to regulate NGOs pursuant to internal regulations. Especially given that President Suparmarat Turkmenbasy has just been voted president for life, it is doubtful that serious reform efforts can be achieved in the immediate future.

The government allowed international experts to assist in the promulgation of a new Civil Code in 1998-99. The new Civil Code sets forth a new and efficient registration procedure and even has a "presumptive registration" clause. This means that an NGO, in the absence of governmental response to the NGO's application for registration, can be deemed as officially registered as a matter of law by the expiration of a set period of time. This type of provision specifically targets governmental incompetence and interference in NGO registration.

However, these progressive provisions of the Civil Code have not yet been implemented. The 1992 law On Public Associations still must be amended to conform to new superseding Civil Code provisions in order for NGOs to gain the benefit of the new Code. Noting the current unwillingness of the government to pursue such reform, a positive outcome in the near future seems unlikely.

D. Current Conceptual Problems

The difference between contemporary Western norms and the Soviet norms is stark. According to contemporary liberal norms, the creation of a legal entity is a privilege that is advantageous to those creating the organization. One privilege of creating a legal entity is the limited liability of the founders and/or members. Also, preferential tax treatment of an organization can generally only be carried out by a recognized legal entity. For these reasons, NGOs in developed countries strive to obtain legal status in order to take advantage of the benefits afforded to them as non-profits.

In contrast, the creation of a legal entity in Central Asia (with the exception of Kyrgyzstan) is viewed as a legal necessity for any organized grouping of people. The registration of that entity opens the organization to scrutiny by governmental organs. In Uzbekistan, Tajikistan, and Turkmenistan, registered NGOs are actively scrutinized by means of outward reporting requirements. In these countries, NGOs are obliged to report to various governmental organs in order to demonstrate that their activities are lawful. Moreover, there are no benefits attached to recognition by the state. As such, registration or state recognition of the NGO in Central Asia is disadvantageous as compared to the contemporary Western model. Registration not only offers no legal protection, but serves as a mechanism for governmental control over NGOs. This is used as explanation for the fact that many NGOs in Central Asia are still not legally registered. Although the governments are reluctant to clamp down on existing non-registered organizations, these unregistered NGOs are walking a precarious line with the authorities. In this regard, many of the organizations are simply ignored and thus survive in their non-recognized state. This compromise forces unregistered NGOs to become ‘invisible’ in order to maintain their activities. They receive grant money to carry out social causes, but cannot actually become advocates and maintain high-visibility campaigns in the absence of registration. If they draw attention to themselves or speak out on policy issues, their ‘illegal’ status will come to light, the penalty for which could result in suspension of their activities, fines, and termination of the organization and seizure of its assets.

The conceptual differences in NGO regulation are fundamental and provide for much confusion in reform efforts. Government officials who are accustomed to the tight control of the current framework are uncomfortable with the thought of relinquishing control. They see deregulation as the harbinger of an anarchic situation. Some of the reluctance is also shared by NGOs themselves, which are accustomed to this style of regulation and may have difficulties in conceptualizing the alternatives.

International assistance to the third sector is generally utilized to initiate local NGOs which it is hoped will later develop into self-sustaining institutions. These NGOs are initiated with donor money and are expected to survive beyond the initial grant while continuing to provide the same ‘public benefits’ of their initial mandate. In this regard, the largest concern to international organizations working in developing countries is the so-called "self-sustainability" of the NGO sector. International assistance is not a finite resource. For their investment, international NGOs and foreign governments only see the short-term benefits of their efforts. The long-term benefits can only be realized if the indigenous NGO sector can survive beyond the gratuity of international assistance; hence the goal of "self-sustainability."

Certainly, one of the biggest problems in regard to the self-sustainability of the sector is the current legislative framework. The current framework fails to fully promote development of the NGO sector; to the contrary it inhibits its growth and utility. Nowhere is this more prevalent than in taxation. Although recent advances have been made, there are still fundamental impediments to NGO development in the current tax rules. For instance, a true NGO is a non-profit legal entity that does not carry out profit as its main goal. According to modern norms, it should not be taxed as a business for certain revenue generated (grants, fundraising and certain forms of limited economic activity). However, in Central Asia NGOs cannot carry out acceptable forms of revenue generation without the same tax liability as a profit-making business.

The rule applies to any revenue generating activity regardless of whether the activity is charitable in nature or not. It even applies to revenue generation of the most innocent nature such as selling guidebooks or raffle tickets. For example, a womens' club that is selling books to raise money for their organizational activities will be taxed as a commercial enterprise. Even if the excess money was being donated to an orphanage, it is still considered revenue. This taxation effectively limits NGOs to those activities that are sponsored by grants or other donations. Reform in this area should be directed at reversing the current rule so that NGOs can carry out limited forms of self-sustaining commercial activity without full taxation. Only under this framework can NGOs be self-sustaining and not reliant on donor grant money.

The converse to this is the obvious proposition that every state has a keen and vital interest in state revenue. In developing economies grappling with financial crises, granting preferential tax treatment that could negatively effect state revenue is hotly contested. In fact, time and time again it has been argued that NGOs in Central Asia should not be afforded tax privileges because of the negative effect on state revenue. Although Central Asian governments are slowly recognizing the importance of NGOs, their current speculations on the value of NGOs does not outweigh their desperate need for state revenue.

Aside from the taxation of the NGO itself, third party donations to charitable organizations is also a contested issue. While most tax codes in Central Asia stipulate deductions for those companies and individuals making donations to non-profit organizations engaged in "charitable goals," their application raises questions that the law fails to address. For instance, donations can only be exempt from taxation when they are given to non-profit organizations that qualify as "charitable." However, no useable definition of charitable can be found in any of the tax laws of the region. That is, although a business makes a donation to a "charitable organization," the business can only speculate that the entity is a recognized as a bona fide charity by the tax police. If not, the business can lose its deduction value of the donation. Given that the final judgment will be founded on the subjective interpretation of the taxing authorities, the absence of a useable definition deters businesses from making such donations.

Another problem with potential charitable contributions is the manner of their calculation. Even if bona fide charities did exist, any amount transferred in gratis to such organizations is deducted from the taxable income of the donor, but not in excess of 2% from their estimated revenue. The fact that the deduction is made on estimated income makes the deduction difficult to use. An error in this estimate can result in a business making a donation that cannot be used to its full extent. Finally, the amount of the possible deduction, 2%, is relatively low in comparison to other countries.

F. NGO Resistance to Reform

Surprisingly, the NGO community itself is resistant to meaningful NGO law reform. NGOs remain fragmented and are skeptical of any governmental initiatives aimed at improving the sector. It has been argued that this skepticism is generated from consistent governmental mistreatment of NGOs. Prior to the promulgation of the new laws, NGOs survived unregistered and to some extent unmonitored. These organizations were born into a sort of underground existence, and managed to thrive. Their concern is that new legislation now only pulls them onto the radar screen of an untrusted authority. Unfortunately, however justified, this attitude only draws suspicion from the most reform-minded officials. Even though some governments have approached NGO reform with at least partial enthusiasm, these government officials have sometimes been met with the hostility and pessimism of an NGO community that has grown and developed without governmental support.

In Kazakhstan, members of the Senate Legislative Committee arranged to hold an open hearing in Parliament on the current NGO draft law. The law was drafted with at least indirect cooperation with NGOs and international organizations. As part of the overall initiative, several round tables were held around the country where NGOs discussed the draft law. Despite the forums that were provided for active participation, the NGOs that attended the hearing criticized the draft law in its entirety and called for its removal from the legislative agenda. Even more surprising, NGO representatives claimed that no law was needed. Senators of the working group had asked the participants to prepare constructive criticisms and proposals ahead of time so that the law could benefit from NGO input. Of approximately 20 NGO representatives present, only one written proposal was received at the hearing. The senators again extended the offer for NGOs to provide written comments after the hearing. To this time, not a single written proposal was received.

This apathy or inactivity could have several negative consequences. The first of these is the potential reluctance of governments to follow through with the current legislative initiatives. NGO law reform may be politically unpopular in the current regimes and as such, pushing the issue when no one is appreciative may be not only a waste of time for politicians but dangerous to their political life. Also, although international organizations push for reform, the absence of cohesion among local NGOs leaves government officials doubtful of their own reform efforts. In addition, governments may opt to promulgate laws for the purpose of appeasing the international community and may do so without input from the NGOs or technical experts. This would result in the adoption of laws that are declaratory and void of real change. And lastly, the fact that NGOs disagree among themselves on the issue of reform only diminishes the grass-roots momentum for positive change.

Another reason for NGO apathy or resistance stems from their unfamiliarity with self-regulation practices. It is assumed that the trade-off for deregulation of the NGO sector is implementation of self-regulation on behalf of the NGOs. It has become clear that NGOs do not fully understand self-regulation and its attendant responsibilities. With self-regulation, NGOs would be legally responsible for open books, ethical considerations such as fiduciary responsibilities, and conflict of interest requirements -- elements of NGO management that have been only superficially applied in Central Asia. For example, during the promulgation of the new NGO law in Kyrgyzstan, certain NGOs petitioned to block the law’s adoption. Their arguments were based on the law’s requirement for open books and conflict of interest provisions. Despite the fact that the newly adopted law is considered to be the most progressive of its kind in the FSU, opponents claimed that these new requirements would harm the NGO sector.

Although these arguments in Kyrgyzstan were seemingly unfounded, some of the fears exhibited by the NGO community throughout the region have merit. For instance, NGOs allege that adoption of a new law could legally require re-registration of all existing NGOs -- a time-consuming and expensive process. In Uzbekistan, where the adoption of the new law was proclaimed a major step forward by the government and NGO community, the law’s silence on re-registration leaves room for argument that all NGOs need to be re-registered to comply with the new organizational legal forms set forth in the new laws.

In respect to this problem, one can only hope that over time the traditional biases of NGO leaders will fade in the context of a more meaningful legal setting. Government initiatives and hearings have begun around the region and are a good start to this process. Still, NGOs will need to be more open to compromise and realize that deregulation of their activities fairly places increased responsibility on them and their organizations. For their part, international organizations may need to focus on increased resources to promote methods of self-regulation to NGOs and incorporate these topics into their reform efforts.

G. Implementation -- The Problem with New Laws

As was mentioned above, some of the governments are actively addressing NGO law reform. These approaches are coming from the highest levels of governments in their quest for international respect. Uzbekistan, for example, adopted a new law on NGOs that received international acclaim. Kazakhstan and Kyrgyzstan have also carried out minor reform initiatives. Kyrgyzstan now maintains the most progressive NGO law in the region and Kazakhstan has adopted unorthodox measures in their Tax Code to promote NGO activity. Unfortunately, the failure to actively implement these laws could render the achieved reforms worthless.

Currently, there are at least two major problems occurring with the implementation of new NGO legislation in Central Asia. The first problem is that there is deliberate institutional reluctance in implementing new laws. A good example of this is in Turkmenistan where the adoption of a new Civil Code and its progressive provisions remains unimplemented. In fact, representatives from the Ministry of Justice have acknowledged that they will not implement these reforms, and have claimed that their Ministry is obliged only to follow the ambiguous provisions of the 1992 law, On Public Associations. This attitude has been noted by the in-country representatives of the OSCE, but remains a difficult situation to remedy. It is assumed that the reluctance is based on the Ministry's desire to maintain its traditional extensive control over NGOs.

Another form of non-implementation is present in Uzbekistan where representatives of the Ministry of Justice have acknowledged the new NGO law but are lacking the technical support needed for its implementation. In fact, some of these representatives have requested specific training from international organizations to solve this problem of a lack of technical expertise. However, this latter problem can be addressed with continued technical assistance from international organizations. Deliberate reluctance to implement the new laws is, on the other hand, more resistant to external pressures. This reluctance may diminish only with an internal change in institutional philosophy.

The legislative framework for NGOs in Central Asia is in the process of reform. The focus of this reform is aimed at abolishing the Soviet process of regulating NGOs and its outdated legal forms. But even as the former framework is exchanged for a more contemporary one, the concept of NGOs is still subject to traditional perceptions. For reform efforts to continue, governments and legislatures need to rethink the regulation in terms of the legal basis of NGO existence instead of attempting to design legislation to control NGO activity.

Furthermore, legislative changes need to address the fiscal sphere of NGO existence in order to ensure that NGOs are able to sustain themselves. Without changes in taxation, NGOs will remain reliant on the continuation of grant funds, which are a finite resource. If this hurdle can be overcome, the reform takes on another obstacle -- technical implementation. Without appropriate implementation of the new laws, any reform efforts are meaningless.

In the process of real reform, NGOs also must assume greater responsibilities that would correlate with the deregulation of their activities. In this regard, they must accept the common principles of self-regulation and its attributes in trade for tax and other benefits. But it is difficult to advocate self-regulation with its attendant requirements to a community of NGOs that have a tradition of operating outside the law. Thus, NGOs are sometimes reluctant to commit active support to legal reform efforts. However, without the support of the NGOs themselves, it is hard to justify current reform efforts. In the absence of active reform efforts, a self-sustaining NGO sector will not be realized.

References

1. Central Asia consists of the five republics: Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. Active legislative initiatives exist in every republic with the exception of Turkmenistan.
2. The law was drafted in 1990 just prior to the collapse of the formal Soviet Union.
3. The World Bank's Handbook on Good Practices for Laws Relating to Non-Governmental Organizations (May 1997) in Chapter B, section 1(a), defines an NGO as:
4. "[A]n association, society, foundation, charitable trust, nonprofit corporation, or other juridical person that is not regarded under the particular legal system as a part of the governmental sector and that is not operated for profit -- viz., if any profits are earned, they are not and cannot be distributed as such. It does not include trade unions, political parties, profit-distributing co-operatives, or churches."
5. It still exists in Kazakhstan in the Public Associations Law, Article 7.
6. The countries of Central Asia include Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. Kyrgyzstan has repealed their Soviet public associations' law for a contemporary NGO law. Uzbekistan has also adopted a new law on NGOs, however the old law was not fully repealed.
7. In Kazakhstan, for instance, the Ministry of Internal Affairs adopted an instructional letter in 1998, limiting the right to freely associate and the freedom of speech. Some of requirements listed in this instruction letter are: (1) the obligation of an NGO to inform the Ministry of Internal Affairs and/or the Ministry of Justice of any meetings or public events held by the NGO; (2) allowing officials from the Ministry Internal Authorities and/or the Ministry of Justice to attend any meetings or public events held by the NGO; (3) at their meetings prohibiting NGOs from discussing issues which are not within the goals stated in their by-laws; (4) prohibiting meetings of unregistered NGOs. These rules are susceptible to manipulation and subjective interpretation by the authorities. Furthermore, they are clearly intended to inhibit by prior restraint ordinary discourse within such organizations or among their members.
8. For a comprehensive analysis of the history of applicable international law, see L. Irish, Neglected No More: Recent Decisions of the European Court of Human Rights Relating to the Freedom of Association (1999) available at www.icnl.org...
9. Universal Declaration of Human Rights, Article 20 (1948): "1. Everyone has the right to freedom of
10. peaceful assembly and association. 2. No one may be compelled to belong to an association."
11. International Convenant on Civil and Political Rights, Articles 21 & 22 (1966) (ratified by over 135
12. countries). See also id.
13. Sidiropoulos and Others v. Greece, European Court of Human Rights (57/1997/841/1047) (Chamber
14. decision, July 10, 1998)(available at http://www.icnl.org)(" Sidiropoulos"). See also supra at note 7.
15. In civil law countries, post-registration regulation of NGOs is covered by the general laws of the land, which are set forth in codes like a criminal and tax codes. Generally, in the United States, established non-profit entities are regulated by the Internal Revenue Code and on-going case law.
16. FSU refers to the former Soviet Union consisting of the fifteen republics as it was situated pre-independence. NIS refers to the various republics post-independence.
17. The Kyrgyzstan Ministry of Justice issued a Decree in regards to the control over public associations' activity identified as Decree #52 (approved by the Minister of Justice, May 11, 1999). Decree #52 maintained an inexhaustible list of information that must be made available to the Ministry of Justice such as internal memos, information on property, use of mass media, founders names, addresses and their financial information. The Decree created a wholly expansive jurisdiction of the Ministry's regulating powers into all spheres of NGO activity. This Decree was based on the former law, On Public Associations. Both the former law and this Decree were repealed with the adoption of the new NGO law described in Section C(3).
18. Note that the analysis is comparing the law against various forms of international authority which together show the law’s shortcomings. However, some of these specific decisions of tribunals and agreements do not necessarily have legal force as to countries of Central Asia. For example, decisions of the European Court of Human Rights do not have application to Central Asia but nonetheless are persuasive authority.
19. One theory is to leave the public association law as a base for all organizations and to adopt specific legislation on every organizational legal form of NGO.
20. It is comparable to implementing regulations of Western countries.
21. Speech at a Joint Meeting of the Houses of Parliament, Astana, March 31, 1999..
22. At the present time, tax benefits in Kazakhstan are regulated by: (1) the Presidential Decree on Taxes and Other Obligatory Payments to the Budget (April 24, 1995); (2) applicable resolutions of the government; and (3) separate international agreements. The Presidential Decree (hereinafter the Decree), having the force of law and approved by the Parliament, is the de facto Tax Code of Kazakhstan.
23. Presidential Decree, amended Article 5 (8).
24. Id. at former Article 34.
25. Kyrgyzstan has adopted a new law on NGOs that specifically states the existence of a right to form an organization with or without the creation of a legal entity. On Non-commercial Organizations (October 1999), Article 6.
26. It is well known that the United States Agency for International Development (USAID) fully intends eventual withdrawal from the Central Asian region by 2003-2004. In fact, USAID has already "graduated" many of its programs in Eastern Europe. USAID's stated philosophy is to facilitate or initiate indigenous programs that will make on-going contributions to the local community. USAID does not intend to provide perpetual assistance in any of the countries where it is presently located.
27. This has been stated many times and even at high-level conferences on taxation such as the seminar, Government and the Tax Culture, Astana, Kazakhstan, November 24^th, 1998, held in Parliament.
28. For instance, the term "charity" is used in the Kazakhstan's Tax Code, in Article 34. But the definition maintains no mechanism for the certification of a charity or charitable activities leaving the determination up to the subjective interpretation of the reader.
29. Id. at Article 34.
30. Such deductions can normally range from 5% to 10% in other countries.
31. The hearing was organized by the Senate Legislative Committee and the American Bar Association whereby NGOs were invited to Astana to give testimony to the Senate Legislative Committee on the current draft. It was held on one day in Astana Kazakhstan on June 25, 1999.
32. Five round tables were held by the Association of Non-governmental, Non-commercial Organizations of Kazakhstan (ANNOK), a national network of NGOs. The round tables took place in five regional cities of Kazakhstan.
33. Kyrgyzstan recently adopted a law "On Patronage and Charitable Activities" (October 11, 1999). This law states that charities do exist in law but fails to create a mechanism for ascertaining "charitable" status. Furthermore, the law does not correlate with any fiscal benefits in the Tax Code. The law may look progressive but in effect, it is unenforceable and unusable by anyone. The law and related comments are available through ICNL.
34. A small group of NGOs, mainly the Kyrgyz Committee for Human Rights, circulated a petition of NGO signatures in order to stop adoption of the new NGO law. The petition cites reasoning that was unfounded. One reason cited was the lack of fiscal benefits to NGOs in the draft law -- something which could only be accomplished by amending the Tax Code and could not technically be incorporated into any NGO law.
35. Although this is still an open question in Uzbekistan, such a position in Kyrgyzstan is not justified. At a recent OSCE governmental conference (December 13, 1999 Bishkek, Kyrgyzstan), the Ministry of Justice and drafters agreed that the wording of the new law clearly could not be interpreted in such a way s to mandate re-registration. To require re-registration, one would have to amend the Civil Code of Kyrgyzstan – a feat as difficult as adopting a new law.
36. There was a large reception held in Washington, DC, at the Uzbekistan Embassy. The ceremony was held on June 28, 1999, and was sponsored by various international organizations. The goal of the event was to acknowledge the progress made by Uzbekistan in the NGO sphere, in particular the adoption of a more progressive law. The adoption of the law was also a positive benchmark in the United States-Uzbekistan Joint Commission Report of May 25, 1999. Nonetheless, which each of these activities, international organizations and diplomatic entities urged appropriate implementation as the next step.
37. The Ministry of Justice requested training from the Parliament drafting center, The Institute for Monitoring Legislation and the International Center for Not-for-Profit Law. This training is to be held in the Spring of 2000 and is sponsored by the United States Agency for International Development.