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Civil Society Law Expert Meeting Nessebar, Bulgaria 2-5 June 2010 Interesting Developments in the NGO Legislation in Azerbaijan M.Guluzade, ICNL.

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Presentation on theme: "Civil Society Law Expert Meeting Nessebar, Bulgaria 2-5 June 2010 Interesting Developments in the NGO Legislation in Azerbaijan M.Guluzade, ICNL."— Presentation transcript:

1 Civil Society Law Expert Meeting Nessebar, Bulgaria 2-5 June 2010 Interesting Developments in the NGO Legislation in Azerbaijan M.Guluzade, ICNL

2 Main novelties since 2009 Increase of fines for NGOs; Increase of fines for NGOs; Adoption of Law on Voluntary Activity; Adoption of Law on Voluntary Activity; Numerous changes to NGO law in June 2009; Numerous changes to NGO law in June 2009; Housing Code of October 2009; Housing Code of October 2009; Presidential Decree of December Presidential Decree of December 2009.

3 Increase of fines for NGOs Amendment to Article of the Administrative Code increased the fine for failure of NGOs to submit a copy of a grant contract to the Ministry of Justice from 50 AZN to amount of from 1000 to 2500 AZN (approximately USD$1240 to $3100). Such a penalty is disproportionate to the violation. For example, the failure of commercial entities to submit a timely tax report may result in a fine of 40 AZN (approximately USD$50) (Tax Code, Article 57).

4 Adoption of Law on Voluntary Activity The Law on Voluntary Activity entered into force on July 27, Before the adoption of this law, the legislation of Azerbaijan did not contain the notion of voluntary work, and even contained sanctions for use of labor without a labor contract.

5 Why Law on Voluntary Activity is important? Gives a definition of volunteer; Gives a definition of volunteer; Allows foreigners and stateless persons to be a volunteer in Azerbaijan; Allows foreigners and stateless persons to be a volunteer in Azerbaijan; Enumerates areas where volunteers can work; Enumerates areas where volunteers can work; Contains rights and duties of volunteers and host organizations; Contains rights and duties of volunteers and host organizations; Requires written contract with volunteer, etc. Requires written contract with volunteer, etc.

6 Changes to NGO law -1 In June 2009 more than 20 changes to NGO Law were submitted to the Parliament. In June 2009 more than 20 changes to NGO Law were submitted to the Parliament. Many of the changes were restrictive. Many of the changes were restrictive. What was proposed: What was proposed: 1) Restrictions on the right of foreigners to found NGOs and to serve as managers of branch offices. 1) Restrictions on the right of foreigners to found NGOs and to serve as managers of branch offices. 2)The prohibition against NGOs generating more than 50 percent of their income from foreign sources. 3)The prohibition against foreign organizations opening branches or representative offices, unless Azerbaijan has entered into an international agreement with the organization’s home state. 3)The prohibition against foreign organizations opening branches or representative offices, unless Azerbaijan has entered into an international agreement with the organization’s home state.

7 Changes to NGO law -2 4)Restrictions on informal NGOs and sanctions on NGO managers and individuals for “speaking or acting” on behalf of an unregistered NGO. 5) Ambiguous and discretionary grounds for denying registration—including a prohibition against registering an NGO whose name would “mislead the population”. 6) High minimum capital for establishment of foundations— 50,000 manat (approximately USD$62,500); 7) Prohibition against NGOs generating more than 50 percent of their income from economic activities;

8 Changes to NGO law -3 8) New burdensome reporting requirements and sanctions for NGOs, such as a requirement to submit an audited financial report, and possible liquidation if reports are not submitted on time; 9) Powers of the Ministry of Justice (MoJ) to send surveys to relevant bodies to check the activity of NGOs; 10) Requirement for an NGO to have branches and representations in at least 1/3 of administrative territorial divisions of Azerbaijan in order to qualify for a republican organization; 11) Requirement that the activities of regional NGOs cover three or more local subdivisions of the Republic of Azerbaijan; 12) Implicit indication that MoJ has powers to control whether NGO observes the legislation;

9 Changes to NGO law -4 13) Requirement to submit a registry of members to MoJ; 14) Requirement to inform the MoJ in case of any change into the registry of members; 15) Retroactivity of the law, including a requirement that many NGOs must re-register or face possible liquidation through a court, etc.

10 What was voted for by Parliament Only foreigners and stateless persons who permanently reside in Azerbaijan may establish NGOs. Only foreigners and stateless persons who permanently reside in Azerbaijan may establish NGOs. Foreign NGOs operating in Azerbaijan may only operate in Azerbaijan on the basis of an agreement negotiated with a government agency. Foreign NGOs operating in Azerbaijan may only operate in Azerbaijan on the basis of an agreement negotiated with a government agency. Public associations must establish a registry of members. Public associations must establish a registry of members.

11 What was voted for by Parliament NGO charters may not provide for appropriation of powers of state and local self-governing bodies, and may not assume functions of state control and inspection. NGO charters may not provide for appropriation of powers of state and local self-governing bodies, and may not assume functions of state control and inspection. NGOs and their managers may be held liable for failure to submit reports to authorized government bodies. NGOs and their managers may be held liable for failure to submit reports to authorized government bodies. A foundation must provide minimum required capital (endowment) of ten thousand manats (about 12, 500 USD). A foundation must provide minimum required capital (endowment) of ten thousand manats (about 12, 500 USD).

12 What was voted for by Parliament Deputies of branches of foreign organizations whose manager is a foreigner can be only a citizen of Azerbaijan Deputies of branches of foreign organizations whose manager is a foreigner can be only a citizen of Azerbaijan Introduction of new but undefined financial reporting requirements. Introduction of new but undefined financial reporting requirements. Over 80 per cent of all ICNL’s recommendations were taken into account. Over 80 per cent of all ICNL’s recommendations were taken into account.

13 Housing Code  In October 2009 new Housing Code was adopted. Some of its provisions on renting premises can be used as a tool for harassment of NGOs. Because office space is quite costly, many NGOs rent private flats. According to the Code, residential space can only be rented to persons who ‘live on legal grounds’ in that premises. This means that if a flat owner wants to rent out a flat to an NGO s/he would need to apply for a change of status from ‘residential’ premises to ‘non- residential’. This change is allowed only for residential premises located on the 1st floor or on the 2nd floor where the 1st floor is already non-residential.

14 Housing Code  Change of status to non-residential premises means additional costs, paper work, and higher bills for electricity, phone, gas, etc. In addition, the new Code protects the rights of neighbors, and complaints that a premises has too many people coming and going may present problems for NGOs. The concern here is that such provisions can be manipulated by authorities to harass unwanted or out-of-favor NGOs.

15 Decree of December 2009  In December 2009 President issued a Decree that prohibited operations on non-registered grants.  NGOs have to submit a copy of their grant contract to the MoJ within 30 days since signing the contract (Grant Law).  MoJ registers grants within 7 days.  There is a fine for failure to register a grant.

16 Evidences of positive approach to NGOs No single NGO was ever fined for having a volunteer before adoption of the Law on voluntary activity; No single NGO was ever fined for having a volunteer before adoption of the Law on voluntary activity; Grant registration is conducted even without notarized copies; Grant registration is conducted even without notarized copies; Council for State Support to NGOs was established under the President; Council for State Support to NGOs was established under the President; Public funding is available and it increases year by year (in 2009 about 2 mln Azn per round, total 199 NGOs (out of 489 NGOs) received funding of 1,115,090 Azn (about 1,400,000 USD) during 1st round in 2010). Public funding is available and it increases year by year (in 2009 about 2 mln Azn per round, total 199 NGOs (out of 489 NGOs) received funding of 1,115,090 Azn (about 1,400,000 USD) during 1st round in 2010).


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