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9. Freedom of association

[1]

1. Review

In 2013, the significant modifications in the legislation took effect; they improved the legal regulation of associations to an important degree, including social associations and charities. However, their implementation was not completed; the amendments to other laws in connection with the adoption of these laws were not developed and submitted to the parliament. As a result, there remain many inconsistencies, particularly in tax legislation, legislation on trade unions, etc., which slowed down the introduction of new legislation in administrative practice.

The new law "On public associations"[2], which the NGOs had been developing and promoting, came into effect as of January 1, 2013. In general, the new law on public associations meets European standards and practice of the European Court of Human Rights. It also tackles the problems identified in the judgment of the European Court of Human Rights Koretsky and others vs. Ukraine. Specifically, part 10 of article 12 of the new law clearly defines the grounds for refusal to register an association. Moreover, it contains no restrictions concerning the territory of the association, the possibility of the involvement of volunteers, and possibility to independently determine their activities.

It will be possible to fully assess it only early in 2014, when the generalized statistics will become available. However, in the meantime we can say that the number of refusals of registration has already been reduced by about a half (though most likely this is due to the introduction of procedures for the return of documents for revision, which officially (but in fact it did exist) did not exist before); the number of inspections of NGOs also dropped about five times, and the liquidation of associations juridically almost disappeared.

 The implementation of the law goes a hard way, because it includes some new approaches to regulation that require additional explanation. There are also some problems related to unclear transitional provisions to this law.[3]

On September 10 People's Deputy V.Sushkevych submitted to parliament a bill no. 3225 on amendments to the Law of Ukraine "On Public Associations" (on support of all-Ukrainian public associations)[4]. The project concerns the legal requirements regarding termination of the activities of NGOs, which function in the form of separate legal entities. The law requires that these centers go on functioning without the status of a legal person; otherwise it is necessary to register an association of such entities. According to the author of the project, the new law “impairs the condition of their further functioning, because it “destroys” the decades-old territorial structure of local centers of all-Ukrainian non-governmental organizations.” Then in his letter of explanation he argues: “For example, the all-Ukrainian organizations of veterans, invalids since the 90s of the twentieth century organized their territorial structures from an oblast down to a village or a district in a town. Some of the NGOs formed their territorial structures at the time of Soviets (former republican organizations of the all-Union NGOs). Today, the number of their local centers is about 1,500. Most of them have been registered with the status of a legal person.” Such position has the right to exist and is well grounded. It seems that with such rigid approach the state intervened in the autonomy of associations in the aspect of their own definition of the structure of their organizations. In point of fact, it will be difficult for the state to justify the need for compulsory liquidation of public associations that do not fulfill the requirements of the new law on the modifications of their structure, and such actions of the state can be regarded as a disproportionate interference with freedom of association.

The new law “On Charity and Charitable Organizations" came into force on February 3, 2013[5]. According to many experts, this law is in line with international standards on freedom of association, positive experience of regulation in other countries and is also a major step to improve the situation with freedom of association.

The regulation of political parties remains unchanged. To a large extent, the law on political parties does not meet international standards, but the parties have learned to get along with many of its provisions. However, in certain instances it leaves it to the government to exert pressure on parties, for example, in the case of changing party cell leader, expulsion from the party and so on. In previous annual reports on human rights, we have repeatedly described similar cases, although during 2013 we fixed none of them.

   In general, the current environment is favorable for the establishment and activities of associations. There are no significant financial constraints on the reception of funds or expenditures.

In Ukraine, there remains responsibility for participating in unregistered public organizations. To solve this problem, people's deputies V.Patskan, A. Shevchenko, B.Beniuk and I.Lutsenko submitted a bill no. 3661 of November 21, 2013 on amending the Code of Ukraine on Administrative Offences (about NGOs)[6]. However, it has not been considered by Parliament yet.

2. Establishment and activities of associations

Under the new law, the creation of public associations and charities has been greatly simplified. A lot of bureaucratic requirements of statutory documents and restrictions on the purpose of their activities and associations were x-ed out. However, it is difficult to say with some accuracy how these legislative changes have been implemented in administrative practice. Here is some general information on registration and failure to register the association.

General information about registration / refusal of registration of public associations[7]

 

2011[8]

2012[9]

9 mos. 2013[10]

Total

Registered:

 

Public organizations

1 887

1 913

2 475

46 286

Centers of all-Ukrainian and international NGOs

163

31

480

9 858

Structural formations of political parties

1 162

947

282

162 763

Political parties

15

 

 

201

Charitable institutions

579

558

41

6 976

Offices of all-Ukrainian and international charitable institutions

11

14

-

528

Branches and offices of all-Ukrainian and international charitable institutions

29

42

-

502

Legalization:

 

Trade unions (independent)

80

84

38

1 203

Associations of trade unions

1

-

1

281

Organizational units of all-Ukrainian trade unions

627

857

372

76 610

Organizational units of trade unions with some other status

69

91

20

3 911

Legalization through set-up notification:

 

Public organizations

280

631

548

7 297

Centers of all-Ukrainian and international public organizations

724

783

314

9 575

Grassroot party organizations

2 904

1748

651

119 289

refusals of registration / legalization

764

710

330

 

refusal of registration (approval, taking note of) of changes

435

547

348

 

In 2008-2009, the number of refusals of registration of NGOs was about 1,200 per year. But at the same time more organizations were recorded: about 3,000 per year, which is significantly more than for the period from 2011 to 2013.

These data show that the number of refusals of registration of public associations has dropped dramatically. However, today there is no statistics on the number of documents returned as requiring improvement. Previously such return of documents was not required by law, although it was a common practice, and now the new law opens the opportunity and the Registration Service uses it quite often. Obviously, this is a kind of refusal to register. Therefore, it is necessary to specify that it is impossible to determine the final total of refusals and current data are rather relative.

It should be noted that the number of refusals of registration is still very high. The new law on associations has very narrowly defined grounds for refusal of registration. There are serious doubts that it is a question of 330 organizations the activities of which conflict with the Constitution of Ukraine and directly threaten its values. According to the registration service, the chief organizational difficulties are connected with determination of the name and founders of the organization. It appears that it is necessary to improve this procedure, as is clearly evident that the grounds for refusal of registration of the organization are interpreted in a fuzzy way. Especially when we remember that in fact the decision to refuse to register equates to a ban of the organization, because the participation in such organization entails administrative liability.

There is still a considerable discrepancy among data on the number of NGOs that provide the State Registration Service and the State Statistics Service. The latter as of 01.10.2013, indicated the presence of 76,575 NGOs, 29,463 trade unions and their associations, charitable organizations 14,729 and 19,194 political parties and party cells.[11] These figures are considerably higher than those by the registration service mentioned above.

During registration the entry into the Register of nonprofit organizations and assignment of non-profit status is an important step. This frees the organization from paying income tax. This status is granted by the State Tax Service on a point of order. In fact, it is a necessary additional step of registration because without it the association operates as a company and is greatly limited in financial activities. On September 11, 2012 the site of the State Tax Service of Ukraine published the Draft Resolution of the Ministry of Finance of Ukraine “On approval of the Regulations about the Register of non-profit institutions and organizations” specifying the reordering of assignment of the non-profit status to NGOs. Experts believed that this project could pose a threat to public organizations. In particular, it failed to clearly define the time frame for assignment of non-profit status to NGOs. On January 14, 2013 it was approved by the Ministry of Finance of Ukraine[12]. However, the project underwent changes and did not contain significant drawbacks, though it did fail to specify the time limit for taking a decision on the application for registration as non-profit organizations that could potentially be a problem for the organization.

Another potential problem is the lack of changes to the Tax Code, a part on public associations. Prior to the adoption of the Law of Ukraine “On Public Associations” there was an active Law of Ukraine “On Public Associations”, under which an association of citizens comprised two types of organizations: public organizations and political parties. The current law on public associations defines two distinct concepts: public organizations and public associations. Given this, the term “public organization” has been significantly narrowed, which from now on does not include the notion of “public association” as a union of public organizations.

 However, the Tax Code operates exclusively with the term public organization. Therefore, in practice, the unions of public associations may run into problems with their inclusion in the Register of nonprofit institutions and organizations and ascribing to paragraph b) of article 157.1 of the Tax Code, although prior to the entry into force of the new law on public associations they did have such opportunity. It is vital for many of the non-profit association to lay a claim to this very aspect of non-profitableness because it allows them to receive donations and not to tax them and use them on socially important objectives under paragraph b) of article 157.1 of the Tax Code. The same are the problems with implementation of the first and second parts of article 154.1 of the Tax Code by the public unions of public organizations of disabled people.

To solve this problem, people's deputy of Ukraine V.Patskan filed the bill no. 3695 of November 27, 2013 about amending the Tax Code of Ukraine (concerning NGOs)[13]. However, it has not yet been considered.

The problem is not in the clear differentiation by the registration service of public associations from religious organizations that undergo registration under another procedure and have a different legal status. In particular, the Registration Service in its statistics even separately shows that it has registered 414 non-governmental associations of religious orientation. It is not quite clear what is their actual distinction from religious organizations. This very fact caused a topical conflict in recent years.

The public organization “Association of believers of Ukrainian orthodox Greek-Catholic Church” was registered by the Order of the General Department of Justice in the Lviv Oblast no. 115-r dated 17.03.2011 and the certificate of registration of the association on 17.03.2011, no. 1545 was issued. The Governing Center “Patriarchal Curia” of Ukrainian Greek Catholic Church appealed this decision. The Lviv Regional Administrative Court on June 6, 2013[14] adjudicated to dismiss the claim. However, the Lviv Administrative Court of Appeals on October 29, 2013 disaffirmed[15] the court decision and decided to cancel the entry of the public organization “Association of believers of Ukrainian orthodox Greek-Catholic Church”. The Court found that the registration body failed to properly check the legality of the organization name. In particular, it didn’t take into account the availability of the Certificate of trademark and service no. 136637 “Ukrainian Greek Catholic Church”, cl. 41, 45 ( organization of religious gatherings), which had been issued on 25.03.2011. The court also took into account that the activities of this organization leads to exacerbation of interfaith social and religious situation in the region, inciting religious hatred among citizens, which had been expounded in the relevant expert opinion of the Department of Religious Studies of the H.S.Skorovoda Institute of Philosophy of the NAS of Ukraine.

It is really astonishing that neither the registration service nor the court considered the activities of the organization in the light of the law on religious organizations.

3. Inspections of the activities, temporary prohibition of some kinds of activities, and liquidation of public associations

As it was already mentioned, the new legislation on associations had a positive impact on the situation with inspections of the associations by the registration service.

   In 2009, over 9.3 ths inspections of associations were conducted (in 2008 more than 7.3 ths, in 2007 more than 6.5 mln) and 572 notifications were issued (730 in 2008, 550 in 2007). Obviously, the number of inspections kept increasing each year, but with the new law, their number decreased about five times. Accordingly, there are no notifications and virtually no claims to NGOs. It is also good that no public associations were liquidated during 2013.

Total of inspections, notifications and claims on liquidation of public associations

[16]

 

2011[17]

2012[18]

9 mos. of 2013[19]

Decisions to cancel the registration records

1 339

2 482

1 416

Number of inspections of associations (NGOs / charities / structural bodies of political parties) - acts of inspections

7 633

9 378

1 602

Notifications

 

419

320

-

Number of law suits and appeals to the prosecutor by the results of inspections of NGOs

54

49

1

Number of NGOs liquidated by the court by results of control of organs of justice

46

27

-

4. Recommendations

1)     Ensure proper implementation of the provisions of the law "On Public Associations" and "On Charity and Charitable Organizations ". The Ministry of Justice needs to develop, submit to the Parliament and adopt the amendments of the legislation in connection with the adoption of these two laws.

2)     Remove Article 186-5 of the Administrative Code, which establishes the responsibility for heading or participating in the unregistered public associations.

3)     State Registration Service should summarize filing of lawsuits on liquidation of political parties and public organizations and bring it into line with the requirements of article 11 of the European Convention on Human Rights, article 37 of the Constitution of Ukraine and practice of the European Court of Human Rights.

4)     Higher Administrative Court of Ukraine should summarize jurisprudence on claims for liquidation (annulment of the certificate of registration) of political parties and NGOs.

5)     Develop and adopt amendments to the Law of Ukraine "On political parties" to bring it into line with international standards [20].

6)     Registration Service of Ukraine shall include into its statistics the information on the number of returned documents for completion of registration, as well as information about registration of political parties, number of applications for cancellation of the registration of political parties and their removal from the register.

 

[1] Prepared by Volodymyr Yavorsky, member of the Board of UHHRU.

[2] See: zakon2.rada.gov.ua.

[3] See. e.g., "On the status of implementation of the Law of Ukraine "On public associations", http://civil-rada.in.ua/post/1421; "The new "extermination" of the third sector in Ukraine”, http://svsever.lg.ua/ 2013/03/novoe-poboishhe-tretego-sektora-v-ukraine /.

[4] See: w1.c1.rada.gov.ua.

[5] See: zakon2.rada.gov.ua.

[6] See: w1.c1.rada.gov.ua.

[7] According to the State Registration Service of Ukraine for different years: www.drsu.gov.ua.

[8] www.drsu.gov.ua.

[9] www.drsu.gov.ua.

[10] www.drsu.gov.ua.

[11] The number of subjects in the Uniform State Register of Enterprises and Organizations of Ukraine by organizational and legal forms of economic management, http://ukrstat.org/uk/edrpoy/ukr/Uniform EDRPU_2013/ks_opfg/ks_opfg_1013.htm.

[12] zakon4.rada.gov.ua.

[13] See: w1.c1.rada.gov.ua.

[14] www.reyestr.court.gov.ua.

[15] www.reyestr.court.gov.ua.

[16] According to the State Registration Service of Ukraine for different years: www.drsu.gov.ua.

[17] www.drsu.gov.ua.

[18] www.drsu.gov.ua.

[19] www.drsu.gov.ua.

[20] See, inter alia, Guidelines for legal regulation of the activities of political parties, OSCE, www.osce.org