Ukraine is breaching international standards with new laws regarding NGOs

Protest is mounting in Ukraine over two draft bills which would impose discriminatory and excessive demands on NGOs receiving international grants. Prominent human rights activists believe them to be in clear violation of international standards on freedom of association. 

As reported, President Petro Poroshenko’s Press Service announced on July 8 that he was tabling a package of draft bills which would cancel a highly contentious norm targeting anti-corruption NGOs and investigative journalists.  That law, signed into force by the President in March, required that such anti-corruption watchdogs present e-declarations, like the public officials whose corrupt dealings they often expose.  It was widely condemned both within Ukraine and by Ukraine’s international partners.   

Concern was expressed from the outset about the amendments Poroshenko was instead proposing to the Tax Code, and this has only escalated.

The Human Rights Ombudsperson Valeria Lutkovska, the Ukrainian Helsinki Human Rights Union and Kharkiv Human Rights Group have issued a joint statement condemning the two bills now introduced.

Draft bill No. 6674 proposes amendments to the Tax Code, No. 6675 amendments to various legislative acts, with both purportedly aimed at “ensuring public openness regarding the funding of the work of civic organizations and use of international technical aid”.

The amendments would mean that NGOs above a certain (fairly modest) annual income would have to submit annual financial reports to the State Fiscal Service, with these being posted on the latter’s official web-site.  The reports would need to include the same information about any individual entrepreneurs who entered into contractual relations if the entrepreneurs had an annual income of 50 times the average subsistence level for able-bodies individuals.

The appeal calls such requirements clearly discriminatory and an unnecessary extra burden on NGOs and individual entrepreneurs.  The lack of clarity as to what information must be disclosed, and the purpose of such disclosure are also in breach of the Law on Personal Data Protection.

There is absurdity in the fact that some of the data now demanded is already regularly provided in accordance with the Tax Code in its present form.  There will be a doubling up of information submitted, yet even this will not save an NGO or entrepreneur from sanctions if the information is not submitted a second time.

The sanctions are, for Ukraine, serious since the NGO would face exclusion from the Single Register of Non-profit-making Institutions and Organizations, with this resulting in being charged tax as though profit-making organizations, as well as other steep fines.

It is particularly disturbing, they point out, that any sanctions would be imposed by the State Fiscal Service without a court ruling and without any protocol regarding an administrative offence having been drawn up.  This, they note, is a breach of Clause 9 of the Fundamental Principles on the Status of NGO’s in Europe, which stipulates that “Any act or omission by a governmental organ affecting an NGO should be subject to administrative review and be open to challenge in an independent and impartial court with full jurisdiction”.

It is to be welcomed when NGOs voluntarily publish their annual reports, with this informing the public and ensuring transparency.  It is the public who are entitled to determine the effectiveness of an NGO’s activities.  The state’s role is to promote freedom of association, and these proposed amendments, they warn, are in breach of international standards regarding such freedom and discriminatory.

Other civic activists, for example, from the Kharkiv Institute for Social Research, the Kharkiv-based ‘Public Alternative’ NGO and others have also issued a statement calling the bills “A blow to the independence of civic organizations’.

This view is shared by Vitaly Shabunin, Head of the Anti-Corruption Action Centre, who wrote in Ukrainska Pravda that “the proposed norms introduce an additional form of tax reporting for NGOs and give fiscal authorities total manual control over the activities of non-profit-making organizations”.

“In the hands of an unreformed fiscal service, such an instrument can become an effective way of blocking the work of organizations that are critical of the government”, he warned.

In the vast majority of cases, Ukrainian civic organizations provide vital humanitarian, legal and consultative services that members of the public are not given by the authorities.  The government should be helping such NGOs, not imposing suspect and discriminatory restrictions.