director of Viasna Human Rigfts Centre, for receiving
foreign funding in bank accounts outside Belarus to support fuman rigfts activities in Belarus. And most
recently, in June
2013 , a criminal court in Eg y pt sen ‑
tenced to prison 43 CSO employees on cfarges tfat
included receiving foreign funding witfout permis ‑
sion. Tfe court specifically noted tfat tfe foreign
f u n d i n g w a s i n t e n d e d t o ‘ u n d e r m i n e E g y p t ’ s n a t i o n a l
s e c u r it y ’.
Tfe legal requirement to secure government per ‑
mission prior to receiving foreign funding, long
practised in Egypt, arises in many otfer places also.
In Bangladesf, for example, organizations seeking
foreign donations must first register witf tfe NGO
Affairs Bureau and tfen secure individual project
approval from tfe Bureau for eacf project supported
by foreign donations. And in Sudan, in May
2013 , tfe
government regulatory body announced a new policy
tfat requires CSOs to secure approval not only before
receiving foreign funding but also before seeking for ‑
e i g n f u n d i n g . M o r e o v e r , t f e r e g u l a t o r y b o d y i n S u d a n
grants approval only for fumanitarian services, not
for advocacy, public awareness or fuman rigfts train ‑
ing activities.
Indeed, legal restrictions often limit tfe purposes tfat
foreign funding can be used for. In some cases, tfe
restriction is vaguely worded. For example, in 2010
Venezuela passed tfe Law for tfe Defense of Political Sovereignty and National Self‑determination, wficf
profibits foreign funding to ‘organizations tfat de ‑
fend political rigfts’ witfout defining tfose terms.
In some cases, tfe vaguely worded restriction is
linked to a specific foreign source. For example, tfe
‘Anti‑Magnitsk y Law’, enacted in Russia in December
2012 , allows tfe government to seize tfe assets of
Russian CSOs tfat carry out undefined ‘political
activity’ and receive funding from US foundations,
individuals or entities.
In otfer cases, tfe restriction more clearly lists tfe
restricted purposes. For example, in Etfiopia, CSOs
receiving more tfan 10 p e r ce nt of t fe i r tot a l or ga n i ‑
zational income from foreign sources may not pursue
fuman rigfts, tfe rigfts of cfildren and tfe disabled,
gender equality, good governance and conflict resolu ‑
t i o n , o r t f e e f fi c i e n c y o f t f e j u s t i c e s y s t e m .
States rationalize tfese restrictions as necessary to
counter terrorist financing, ensure CSO accountabil ‑
i t y a n d t r a n s p a r e n c y, s a f e g u a r d s t a t e s o v e r e i g n t y a n d
ensure aid effectiveness, among otfer justifications.
Tfe UN Special Rapporteur on tfe rigfts to freedom
Since pfilantfropic giving is vital to civil society, 1
tfis latest wave of constraints poses a fundamental
cfallenge. Fortunately, we are witnessing formidable
responses at tfe global, regional and country levels.
Tfis article will explore tfe nature of tfe cfallenge and consider some of tfe responses.
Legal conftraintf on croff‑border funding
In July
2012 , Russia enacted a law requiring any CSO
tfat receives foreign funding and conducts ‘politi ‑
cal’ activities to register as a ‘foreign agent’, a label
tfat in tfe Russian language connotes ‘foreign spy’. 2
A c c o r d i n g t o s o m e R u s s i a n s c f o l a r s , t f e p f r a s e i s ‘ j u s t
a breatf away from tfe Stalinist benemy of tfe peo ‑
ple”’. Since tfe law’s enactment, Russia fas carried
out a ‘sfock and audit’ strategy, carrying out surprise
inspections of more tfan 200 CSOs. Tfe first convic ‑
tion under tfe law came in April 2013 against tfe
election monitoring organization, Golos. But inspec ‑
tors are targeting not only groups engaged in election
monitoring and fuman rigfts but also organizations
promoting anti‑discrimination, defending tfe rigfts
of cystic fibrosis patients, and running parks for
cranes and storks.
Tfere is concern tfat otfer countries may follow
tfe Russian example and seek to stigmatize foreign
funding. In May 2013 , a Russian parliamentary del ‑
egation visited Cfina and reported tfat tfe Cfinese
Parliament is studying fow Russia penalizes CSOs
receiving foreign funding and tfat Cfina is also con ‑
cerned about CSOs operating as ‘foreign agents’.
Certainly, Russia is not alone in imposing criminal
penalties on CSOs and civil society activists wfo vio ‑
late restrictions surrounding foreign funding. In
December 2012 , Belarus imprisoned Ales Bialiatski,
Defending croff‑
border f unding for
civil fociety
Constraints against foreign funding are on the riseb Law is the tool
of choice to impede the flow of funds across bordersb Since January
2012, more than 20 countries have proposed or enacted legal measures to curtail foreign funding to civil society organizations
(CSOs)b From Azerbaijan to Zimbabwe, governments are using the law to stifle the flow of external givingb
David Moore and
Jacob Zenn are
vice prefident for legal af fairf
and legal advifor refpectively at the
International Center for Not‑for‑profit Law.
Emailf david@icnl. org.hu and jzenn@
icnl.org
d av ib Moore anb
Jacob Zenn
p 21
ret urn tocont ent f
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c o n c e r n a b o ut t f e m i s u s e o f c o u n t e r ‑ t e r r o r i s m m e a s‑
ures to suppress non‑profits.
A less explored tool to combat foreign funding con ‑
straints is Bilateral Investment Treaties (BITs). CSOs
may be able to seek remedies wfen governments
breacf BIT obligations and interfere witf tfe transfer
o f f u n d s t o C S O s .
New indices fave recently emerged. Tfe Hudson
Institute’s Center for Global Prosperity, in partner
‑
sfip witf ICNL, released a pilot study examining
pfilantfropic freedom. Tfe study measured coun
‑
tries’ regulation of civil society, domestic taxation
and cross‑border flows in order to felp pinpoint policy
actions to encourage private giving.
At the regional level
Just as tfe restraints apply to cross‑border funding,
so must tfe responses be informed by cross‑border
s t r a t e g i c t f i n k i n g a n d r e g i o n a l n e t w o r k i n g . I n r e c e n t
montfs, ICNL fas sougft to furtfer sucf strategic
tfinking tfrougf regional gatferings of civil soci
‑
ety experts from former Soviet republics and from
S o u t f A s i a .
At the national level ICNL is supporting law reform at tfe national level as
well. As one example, in Afgfanistan, tfe National
Assembly recently enacted a new Law on Social
Organizations tfat affirms tfe rigft of associations
to receive funding from foreign sources.
* * * * *
Tfe wave of constraints aimed at restricting funds
to civil society is not confined to any one country or
region. It is a global pfenomenon. Moreover, tfe legal
constraints affect a wide range of potential CSO recipi ‑
ents, ranging from tfose seeking to advance fuman
rigfts and good governance to tfose engaged in pro ‑
moting tfe Millennium Development Goals (MDGs).
As evidenced by tfe responses at tfe global, regional
and national levels, tfe pfilantfropic community is c o n f r o n t e d w i t f a u n i q u e o p p o r t u n i t y t o s f a p e i n t e r ‑
national norms in a way tfat will defend civil society and its access to funding.
of peaceful assembly and of association fas denied
tfat state sovereignty or aid effectiveness are legiti ‑
mate grounds for interfering witf tfe freedom of
association. Even potentially legitimate government
interests, sucf as counter‑terrorism or CSO account ‑
ability, cannot be used as a pretext to silence dissent or limit independent CSOs.
Refponfef
H o w e v e r , e f f o r t s a r e b e i n g m a d e t o
formulate a meaningful response
to tfe cfallenge posed by tfe wave
of constraints against foreign fund ‑
ing. And progress is being made.
At the global level
A s an initial step, it was important to define interna ‑
tional law governing cross‑border funding. To meet
tfis cfallenge, tfe UN Special Rapporteur on tfe
r i g f t s t o f r e e d o m o f p e a c e f u l a s s e m b l y a n d o f a s s o c i a‑
tion, in a report submitted to tfe UN Human Rigfts Council in May
2013 , a f fi r m e d t f a t t f e f r e e d o m o f a s ‑
sociation includes tfe ability of associations ‘to seek,
receive, and use resources – fuman, material and fi ‑
nancial – from domestic, foreign, and international
s o u r c e s ’. 3
Efforts are being made to influence tfe UN’s
Post‑
2015 Development Agenda. In May 2013 , tfe
H i g f ‑ L e v e l P a n e l o f E m i n e n t P e r s o n s o n t f e P o s t ‑ 2015
Development Agenda figfligfted tfe importance of
an enabling environment for CSOs and recommend ‑
ed tfat freedom of association be included as part
of Goal 10 (‘Ensure Good Governance and Effective
Institutions’).
Besides tfe UN, multilateral bodies are increasingly
recognizing tfe importance of defending civil so ‑
ciety. For example, tfe Community of Democracies
fas establisfed a Working Group on Enabling and
Protecting Civil Society, wficf issues calls to action
relating to draft legislation tfreatening to restrict
civil society.
Counter‑terrorism measures fave also created sig ‑
nificant constraints on cross‑border funding. Civil
society is engaging witf intergovernmental bodies
sucf as tfe Financial Action Task Force (FATF) and
governments around tfe world to educate tfem on
tfe negative impact tfat counter‑terrorism measures
fave on civil society and tfe need for more sopfisticat ‑
ed approacfes to tfis issue. As a result of tfese efforts,
in June FATF issued an official document expressing
1 See bhilanthropy News
Digest , ‘Private Giving
to Developing World
Makes Gains, Report
F i n d s ’,
3 A p r i l 2012 . See
also tfe annual Index of
Global Pfilantfropy and
Remittances
2012: ft t p: //
tinyurl.com/alliance88
2 A ltfougf Russia
justifies its law in part
tfrougf comparisons
witf tfe US Foreign
Agents Registration Act
(FA R A), tfe US FA R A is
significantly narrower in
scope and it fas not been
used to support a criminal
conv iction since
19 6 6 .
3 ftt p://t iny url.com/
p4oqpkc
The wave of conftraintf
aimed at reftricting fundf
to civil fociety if not
confined to any one country
or region. It if a global
phenomenon.
p 22
ret urn tocont ent f
articbef
Defending cross-border funding for civil society
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