[1]

1. General review

Although the significant changes to the legislation have entered into force in 2013 and they substantially improved the regulation of public associations and charity organizations, their implementation has not been completed by the end of 2014 yet. The amendments to other laws related to the adoption of these laws have not been developed and submitted to parliament. This is the reason there are so many inconsistencies, particularly in the tax laws, laws concerning trade unions, etc., which have slowed down the implementation of the new legislation to administrative practice.

In addition, there are many problems in the implementation practice of the new legislation, since the officials who provide registration, often try to apply the old methods to the new law, ignoring its basic principles. This explains a rather large number of documents returned for revision or big amounts of refusals to register public associations. Implementation of the law does not go easy, because it contains some new approaches to the regulation that require additional interpretation.

During Euromaidan, on January 16, 2014, amendments to the Law on Public Associations were adopted in order to limit the freedom of association. In particular, the concept of “foreign agent”[2] was spread, the rights of which were limited, and responsibility of organizations for extremist activities was established. These changes have been criticized by human rights[3] and international organizations because of violation of human rights. They were abolished on January, 28 and later in February after the regime change[4], so they did not to take effect fully.

On the 5th of July the changes to the Law “On Public Associations”[5] (concerning support of activity of Ukrainian national citizen associations) came into force. Changes concern previous law requirements regarding the termination of the activities of public associations’ chapters, which exist in the form of separate legal entities. The law required such a chapter not to be a legal entity or the association to be registered as an association of legal entities. It seems that using such a strict approach the state intervened in the autonomy of associations as to their own definition of their structure. In fact, it would be hard to the state to justify the need of compulsory liquidation of associations that do not fulfill the requirements of the new law as to the change of the structure and the following state’s activities can be regarded as disproportionate interference with freedom of association. That’s why these changes may only be welcomed.

The regulation of political parties remains unchanged. The law on political parties mostly does not meet international standards, but the parties learn to get along with many of its provisions. In some cases, this enables authorities to implement pressure to parties, for example in case of change of party organization leader, the exclusion of a person from party members and other situations. We have repeatedly described similar cases in previous annual reports on human rights, although in 2014 we did not observe them.

Generally, advantageous environment for the establishment and activities of associations is kept. There are no significant financial restrictions on receiving or spending funds. Terms of associations’ registration have improved significantly.

In late 2013 — early 2014, the Ukrainian Center for Independent Political Research conducted a monitoring of the new law on associations[6]. As a result of the polling of the representatives of public associations, 79% of which addressed on the matter of registration of new public association (with legal entity status), 11% noted changes as to the constituent documents and 10% submitted documents as to the changes in governing bodies, the following results were received:

— 38% of the representatives of public associations that participated in the polling noted that they did not face difficulties while preparing documents and during their filing;

— Among those who have experienced difficulties, 64% noted that it was difficult to prepare a Statute that would meet the requirements of the law, 28% reported difficulty in preparing other documents, 32% faced incomprehensibility of the filing order, 8% noted other difficulties;

— 88% of respondents noted that the process of registration procedures was successfully completed. 10% faced the fact that their documents were sent back for revision, 2% faced the difficulties when the documents they submitted were left without consideration;

— the most common obstacles of successful registration, according to respondents’ answers, were the following: the Statute did not comply with other laws (57%); the documents were filed not in full (28%); errors and inaccuracies in other documents (15%).

The responsibility for participation in an unregistered public association still exists in Ukraine. The Parliament of the VII calling refused to consider the law draft aimed at liquidation of such responsibility, and this project has not been registered in the new parliament yet[7].

2. Creating and operation of associations

Creating associations and charity organizations was significantly simplified under the new law. Many bureaucratic requirements for statutory documents and restrictions on the establishment of goals and activities of associations were eliminated.

The registration terms were significantly reduced, too. Earlier the registration of the new organization took at least a month, but according to the law the new organization should be registered within 7 days. Although these terms are violated in half of the cases, in general they are much smaller.

An important innovation is that if the documents were improperly filed, the representative of the public association gets legal opinion on the results of the examination. This conclusion is given once, that means that if a public association eliminates all these drawbacks mentioned in conclusion, the registering authority should register a public association. This option prevents speculation on the part of officials and multiple returns of the documents.

The most “appealing” drawback is lingering the terms of processing of documents submitted by postal mail. Practically, it looks like this: public association sends documents and representatives of registration bodies take them from the post office with delay. This “delay” can take about several weeks or even months.[8]

The new law established a comprehensive list of documents for registration of a new public association or amendments to the existing one. However, there are disadvantages while registering public association: the list of documents certifying the ownership structure of the founders is not defined. It is not known whether the statute of the legal entity- founder of the public association is enough or whether it is necessary to add an extract from the Companies House Register. [9]

The Register of the Public Organizations was created for the first time. It made the list of public organizations and public unions[10]. The register contains information about the activities of associations, founders, governing bodies and contact information. However, there are several disadvantages that make it impossible to obtain the available information about the association. In particular, the search parameters limit the amount of found information on associations to 500 entries, the search is not configured to search look associations by the year of formation/registration, there is no search criteria for the presence of legal status of a public association. It is also worth noting that some areas have problems while exchanging data between registers of public associations and Companies House registers when entering information on changing the location of public associations and changes in the governing bodies.[11]

District Administrative Court of Kyiv on June 27, 2014 granted the petition of the PA “Road Control Ukraine” to Sviatoshynskyi district administration of justice in Kiev[12]. The resolution in the form of an order on the registration of public association by the Svyatoshynsky district Department of Justice in Kiev was adopted on December 25, 2013. Thus, information on the registration of public association was to be added by the registrar to the Register of associations no later than on December 26, 2013. However, this was not done. The court found the omission of the registrar unlawful.

Many disputes arise about the names of the associations.

Kyiv Administrative Court of Appeals on May 22, 2014 dismissed the appeal of public association “Ukrainian Aviation Association” AOPA-Ukraine”.[13] It appealed the actions of Solomianskyi district administration of justice in Kyiv on registration of the PA “AOPA”. The Court found that “the plaintiff’s reference that legal entity name — PA ”AOPA Ukraine” is identical and is similar to its name — public association “Ukrainian Aviation Association “AOPA-Ukraine”, that violates its rights is unreasonable because the presence of identical letters in the proper name do not suggest the complexity of identification of the organizations, as they have a different status and different full name”. This solution is rather strange because of the obvious, in our opinion, coincidence of the names of the two organizations.

Here is some general information on registration and refusal to register associations.

General Information
of the registration/refusal to register associations [14]
[15] [16] [17] [18]

In 2008–2009, the number of refusals in the registration of public associations was about 1200 per year. But at that time much more organizations were registered about 3000 per year, which is significantly more than the period from 2011 to 2013.

These data shows that number of refusals in the registration of public associations significantly reduced. However, now there is no statistics on the number of documents returned for revision. Earlier this return of the documents was not required by law, although it was common practice, and now the new law provided the opportunity and Registration Service uses it quite often. Obviously, this affects the cases of refusal of registration to some extent. Therefore, it is worth mentioning that the total amount of refusals can not be determined and this statistic is quite relative.

It should be noted that the number of refusals to register a public association is still very high. The new Law on associations defined grounds for refusal of registration very narrowly. There are serious doubts that we are talking about 342 organizations, the activities of which contradict the constitution of Ukraine and directly threaten its values. According to the estimates of the registration service most problems the organizations have concern indication of the name and defining the founders of organizations. It seems that it is necessary to improve this procedure because it is obvious that the interpretation of the grounds for refusing to register the organization are far too broad. Especially concerning the fact that the decision to refuse registration is equivalent to the ban for the organization, since participation in such an organization entails administrative responsibility.

The introduction of the organization to the Register of non-profit organizations provide it with non-profit status is an important step during registration. It frees the organization from paying income tax. This status is granted individually by the State Tax Service according to the separate procedure. In fact, it is a necessary additional step of registration since without it a public association acts as a company and may commit very limited financial activities.

The lack of changes to the Tax Code of the associations is also a potential problems. Prior to the adoption of the Law of Ukraine “On Public Associations” the Law of Ukraine “On Associations of citizens” was in force, under which associations of citizens defined two types of associations — public associations (PA) and political parties. The current law on public associations defines two distinct concepts: PA and civil organizations. Taking this into account, the concept of “civil organization” has significantly narrowed ‒ it no longer includes the concept of “social union” as a community organization.

However, the Tax Code operates only the term “Public Association”. Thus union associations may experience problems with their inclusion them to the Register of non-profit institutions and organizations and the inclusion to the paragraph b) of Article 157.1. Though they had the opportunity before the entry into force of the new law on associations. It is vital for many non-profit association to have such a status because it allows them to receive donations and not to tax them and use them for socially important objectives set the clause B) of the Article 157.1 of the Tax Code. Similarly, there is a problem while applying parts one and two of the Article 154.1 of the Tax Code by the civil unions that employ disabled people.

The Law “On Public Associations” provides a possibility for public associations to conduct business without the purpose of profit. That means that a legal mechanism that allows public organizations, for example, to have paid trainings and use obtained funds for authorized purposes of the organization was created. The distribution of the proceeds among the members of the organization in this case is impossible. However, in practice PAs fall into a dilemma: whether to keep charitable status or to conduct business, since the actual changes to the tax code were not made and in the case PA is doing business the tax authorities exclude such an organization from the registry of non-profit organizations.

The problem is unclear practice of the registration service as to the delimitation of public associations and religious organizations that are registered by another procedure and have a different legal status.

3. Inspections of operation, temporary prohibition of activities
and liquidation of public associations

The processes aimed to eliminate unions, that were accused of separatism became the most resonant. This year there a lot of such stories, due to events in the Crimea and the war in the east.

These attempts to eliminate associations that are listed below show the activity of the Registration Service and does not include a similar activity of the prosecutors and tax authorities.

General Information of the Registration Service[19]
[20] [21] [22] [23]

In July 2014 the Ministry of Justice addressed the court to ban the Communist Party of Ukraine (CPU) for unconstitutional activities[24]. The decision of the District Administrative Court of Kyiv as of July 11, 2014 opened the proceedings in the administrative case No. 826/9751/14 and for preliminary hearing for 22 October 2014. The decision of the District Administrative Court of Kyiv on July 24, 2014 attracted to the case as third parties that do not claim independent demands on the subject of the dispute on the side of the plaintiffs the Security Service of Ukraine, All-Ukrainian Union “Freedom”, Radical Party of Ole Liashko, PA “Will-Community-Cossacks”, Ukrainian republican Party. However, on November 5, 2014 the court suspended the proceedings in the case before the entry into force of judicial decisions in the cases:

1)  No. 826/13088/14 on the suit of the Communist Party of Ukraine to the Cabinet of Ministers of Ukraine of invalidation and cancellation of the paragraph 1, subparagraph 1 of paragraph 3 of the Regulation on State Registration Service of Ukraine approved by Resolution as of July 2, 2014 No. 219, in certain parts;

2)  No. 826/13089/14 on the suit of the Communist Party of Ukraine to the Cabinet of Ministers of Ukraine of invalidation and cancellation of certain clauses of the Statute of the Ministry of Justice of Ukraine approved by the Cabinet of Ministers of Ukraine as of July 2, 2014 No. 228;

3)  No. 800/390/14 on the suit of the Communist Party of Ukraine to the President of Ukraine on the abolition of the Regulation on State Registration Service of Ukraine approved by the Decree of the President of Ukraine on April 6, 2011 No. 401.

It’s quite ironic and apparently it was done with the intent to delay the process. CPU filed three virtually identical lawsuits that challenged the authority of the Ministry of Justice and Registration Service to sue on its liquidation. The claims were filed after the lawsuit on its liquidation was filed. And this manipulation with the law was successful.

In the first case the same District Administrative Court on the same day took a decision[25], which completely dismissed the claim of the CPU. On December 12 an appeal proceedings was opened according to the claim filed by the CPU and as at the mid January 2015 the appeal was not still considered.

In the second case on October 15, 2014 the court ruled that the CPU was fully rejected of the claim[26]. On November 18 the appeal of CPU was rejected[27]. The appeal was filed again, but it is was not considered.

In the third case, the Supreme Administrative Court of Ukraine on September 30, 2014 dismissed the claim of the CPU[28]. This decision may be appealed to the Supreme Court of Ukraine, which is known to consider the cases for a long period of time.

At the same time MPs from the Communist Party appealed to the Constitutional Court of Ukraine to interpret provisions which define the grounds for the dissolution of political parties. However, on September 22 CCU refused[29] to initiate constitutional proceedings because deputies did not specify the specific provisions that are unclear and require interpretation[30].

Obviously, litigation in these three cases will drag on for a long time. Also, later it may a long time to proceed with the case on the elimination of CPU.

On May, 13 the District Administrative Court of Ukraine upheld the claim of the Ministry of Justice of Ukraine on the Prohibition of Political Party “Russian block.” [31] On June, 17 the Court dismissed the appeal of the party[32]. On July, 8 the Supreme Administrative Court opens cassation proceedings based on the appeal of the party, but refused to suspend execution of the decision to eliminate the party[33]. According to the Unified State Register of Court Rulings this cassation appeal has not yet been reviewed. The court had proved circumstances of the calls for actions of seizing power in Crimea by the defendant — a political party “Russian block” and recognized the implementation of such appeals as the creation of formation, which helped to seize power.

On April 30, 2014, the District Administrative Court of Kyiv banned political party “Russian Block”[34]. The Court noted that the actions of Aksenov S., as a leader of the party “Russian Block “ were supported by the party, because on the official website of the political party “Russian Block” there was information that highlights the actions of the party “Russian Block” and its leader — Aksenov S., aimed at eliminating the independence of Ukraine, the constitutional order by force, violation of the sovereignty and territorial integrity of Ukraine, the illegal seizure of state power, propaganda of war, violence, incitement of ethnic, racial or religious hatred, attacks on health. On September, 4 the Court dismissed the appeal and the decision of the party[35]came into force.

In general the given decisions on the liquidation of the political parties are quite reasonable and responsible, concerning human rights standards, in our opinion. You could even say that the government spends too cautious policy on associations that oppose the basic constitutional principles, and only in exceptional cases it appealed to file a lawsuit to ban activities.

The Tax Service of Ukraine and its local offices under subparagraph 16.1.3 paragraph 16.1 of the Article 16 of the Tax Code of Ukraine each year submit lots of claims for the elimination of hundreds of PAs through failure to provide tax reports. In particular, pursuant to the paragraph 2 of the Article 38 of the Law of Ukraine “On State Registration of Legal Entities and Individual Entrepreneurs” the basis for the court decision to terminate the legal entity that is not related to the bankruptcy of a legal person, in particular, for the failure, the authorities state Tax Service tax returns, documents, financial statements in accordance with the law. Litigation of the local courts is quite different and contradictory. However, the opinion of the Supreme Administrative Court is unambiguous. The law on associations sets out an exhaustive list of grounds for liquidation of the public association, which does not include failure to submit tax reports[36]. Nevertheless, for many years the courts get hundreds of respective claims from the tax authorities.

4. Recommendations

1. To ensure proper implementation of rules of laws “On Public Associations” and “On charity and charitable organizations.” The Ministry of Justice must ensure the development, introduction to Parliament and the amendment of the law in connection with the provisions of the two laws.

2. To remove Article 186-5 of the Administrative Code, which establishes the responsibility for leading or participating in unregistered public organizations.

3. To amend the Law of Ukraine “On Public Associations”, which includes the list of rights of PAs provided under the Article 21 of this law, the right to represent and protect the rights of its members and other persons at their request, initiate actions on public interests.

4. The State Registration Service should summarize filing lawsuits to eliminate political parties and civil organizations and to bring it in line with the Article 11 of the European Convention on Human Rights, Article 37 of the Constitution of Ukraine and the practice of the European Court of Human Rights.

5. The Supreme Administrative Court of Ukraine should summarize jurisprudence on claims for liquidation (cancellation of the certificate of registration) of political parties and civil organizations.

6. To develop and adopt amendments to the Law of Ukraine “On political parties” to bring it into line with international standards[37].

7. To amend the Internal Revenue Code of Ukraine and to enable the public associations to conduct business according to the Law “On Public Associations” and at the same time keep charitable status.

8. Introduce a legal entity form “social union” to the State classifier of Ukraine, classification of legal forms of management control 002: 2004, approved by the State Committee of Ukraine for Technical Regulation and Consumer Policy as of 28 May 2004, No. 97.

9. To develop and submit to the Cabinet of Ministers of Ukraine a draft bill to amend the Laws of Ukraine “On Public Associations” and “On State Registration of Legal Entities and Individual Entrepreneurs” to ensure registration of PA and their inclusion in the Register of the nonprofit organizations and institutions on the basis of a single window.

10. To amend paragraph 2 of Article 50 of the Code of Administrative Procedure of Ukraine, which includes the associations without legal entity to the list of plaintiffs in an administrative case.

11. To amend the Civil Procedural Code of Ukraine and the Code of Administrative Procedure of Ukraine concerning representation and to identify the relevant documents that can certify the representation.

[1] Prepared by Volodymyr Yavorskyi, Board member of the Ukrainian Helsinki Human Rights Union.

[2] #n364

[3] See, for example one publication among many:

 http://tsn.ua/blogi/themes/law/zakoni-16-sichnya-scho-voni-zminyat-dlya-kozhnogo-ukrayincya-330702.html

[4] http://zakon2.rada.gov.ua/laws/show/767-18/page;

 #n6

[5] #n2

[6] See details here:

 http://ucipr.org.ua/publications/anons-umovi-diialnosti-gromadskikh-obednan-realizatciia-zakonu-ukraiini-pro-gromadski-obednannia-ta-regionalnikh-program-rozvitku-gromadianskogo-suspilstva-u-2013-rotci-avtori-m-v-latciba-a-o-shimchuk-a-o-krasnosilska/lang/www.transparency.org

[7] It is available here: http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=49132

[8] See “The Law “On Public Associations”. A year of work” //

 http://ucipr.kiev.ua/publications/zakon-pro-gromadski-obednannia-rik-roboti

[9] Ibid.

[10] http://rgo.informjust.ua

[11] See “The Law “On Public Associations”. A year of work” //

 http://ucipr.kiev.ua/publications/zakon-pro-gromadski-obednannia-rik-roboti

[12] http://reyestr.court.gov.ua/Review/39700311

[13] http://reyestr.court.gov.ua/Review/39142047

[14] According to the data of State Registration Service of Ukraine for different years:

 http://drsu.gov.ua/show/1443

[15] http://drsu.gov.ua/file/1854

[16] http://drsu.gov.ua/file/10496

[17] http://drsu.gov.ua/show/11918

[18] http://drsu.gov.ua/show/13558

[19] According to the data of State Registration Service of Ukraine for different years.

[20] http://drsu.gov.ua/file/1854

[21] http://drsu.gov.ua/file/10496

[22] http://drsu.gov.ua/show/11918

[23] http://drsu.gov.ua/show/13558

[24] See the text of the claim here: http://istpravda.com.ua/articles/2014/07/9/143697/

[25] http://reyestr.court.gov.ua/Review/41436798

[26] http://reyestr.court.gov.ua/Review/40949465

[27] http://reyestr.court.gov.ua/Review/41517157

[28] http://reyestr.court.gov.ua/Review/41392020

[29] The claim to the CCU is available here: http://ccu.gov.ua/doccatalog/document?id=252493

[30] The resolution of the CCU is available here: http://ccu.gov.ua/doccatalog/document?id=253970

[31] http://reyestr.court.gov.ua/Review/38722605

[32] http://reyestr.court.gov.ua/Review/39270466

[33] http://reyestr.court.gov.ua/Review/39721498

[34] http://reyestr.court.gov.ua/Review/38550801

[35] http://reyestr.court.gov.ua/Review/40430979

[36] See, for example, the decision of the Supreme Administrative Court of Ukraine as of March 20, 2014,

 http://reyestr.court.gov.ua/Review/37968419

[37] See, for example, Guidelines for the legal regulation of political parties, the OSCE,

 http://osce.org/ru/odihr/81988