China’s Foreign NGO Law, Unraveled
Updated: Feb 4, 2019
China's new law “Administration of Activities of Overseas Non-Governmental Organizations within the Territory of China.”
On April 28th, 2016, China had adopted a new law “Administration of Activities of Overseas Non-Governmental Organizations within the Territory of China” (“Foreign NGO Law”). Foreign NGO Law will become effective on Jan. 1, 2017.
The introduction of Foreign NGO Law has brought wide concerns to and criticism from international community. The criticism mainly focuses on constrains effecting Foreign NGO’s activities, funding of NGOs and on Ministry of Public Security and its agencies as the administrative authority.
See “Understanding China’s Foreign NGO Activities Law” – by Chris Mirasola on LawFare.com, “China tightens its grip on foreign NGOs” – by James Griffiths and Steven Jiang, CNN, “China passes new laws on foreign NGOs amid international criticism” – BBC, “China passes law imposing security controls on foreign NGOs” – Tom Phillips, the Guardian, amongst many others.
In recent years, China’s economy development has attracted more and more foreign NGOs to conduct various activities in China. By and before the adoption of the Foreign NGO law, there had been about 10,000 foreign NGOs actively engaging in different activities with no profit motive, such as social, scientific, medical, charity activities. These activities are acknowledged to have been a great help for China’s social development.
Recalling Mao’s famous comment “Make the Past Serve the People and foreign things serve China” is a reminder of the fact that the permitted activities under the law are exactly those that benefit China. And those that are excluded, are injurious to the national security and political stability of the PRC.
Before the new Foreign NGO law, there was no nation-wide law regulating foreign NGOs. Yunnan Province, the province next to Tibet, was the first province having interim provisions to regulate the foreign NGOs. Later, Sichuan province also had issued similar regulations. But these legislative activities were limited to regional areas and were tentative experiences prior to a nation-wide legislation process.
Because it was recognized that to regulate NGOs would bring international concerns, the nation-wide legislation process for foreign NGOs had been long and the Chinese government had been cautious in issuing it to regulate foreign NGOs’ activities. The Foreign NGO Law had gone through 3 drafts before its final promulgation. It appears that the final draft has accepted criticism from international community and made some adjustments to loosen the applicability; for example, foreign schools, hospitals, natural science and engineering research institutions and academic organizations are excluded from the definition of Foreign NGO. Further, there is an extension to register certain emergency situations, such as disaster relieves and emergency rescue. Plus, there are certain “buffers” in the requirement for recruiting NGO members… The definition of a “Foreign NGO” is very prescribed, and defined. That definition is based on the actual activities of the NGO, which may not be the same as its mission or statement of purpose.
China’s Foreign NGO law precludes activities that might endanger national security, damage national interest and other illegal activities as well as political activities. One may assume this means activities such as public policy activities, human rights, … amongst other activities (check China constitutional law). A detailed understanding of the Law will illustrate the definitions of such activities.
In Article 1, Foreign NGO law states the purpose of the regulation is to regulate and provide guidance for foreign NGOs’ activities in China, in order to protect their lawful interest and promote exchange and cooperation (in activities that benefit the development of social welfare (Article 3). However, Foreign NGO Law further states that foreign NGOs shall not conduct any activities that are illegal or criminal in nature (Article 5). It does not specifically state what activities are illegal and (particularly) criminal in nature because the definition of illegality and crime usually are defined by other laws, such as Criminal Law. In short, Foreign NGO Law is to provide a general guidance for foreign NGOs, what they can do and can’t do as well as requirements for purposes of administration.
Read together with other laws, China does not allow any person to conduct illegal and criminal activities (particularly) through a NGO vehicle, no matter whether domestic or foreign NGO.
Definition of Foreign NGOs
Foreign NGO Law define a “foreign NGO” as a lawfully established overseas non-profitable, non-governmental social organizations such as foundations, social groups and think tanks (Article 2). It clearly excludes lawful exchange and cooperation activities conducted between foreign schools, hospitals, research institutes in natural science, engineering and technology or academic organizations and their counterparts (cooperation organizations) in China, as long as those are lawful (Article 53).
Based on this definition, the scope of foreign NGOs is very wide. The law states the activities shall be those to benefit the social welfare, such as activities related to economy development, education, science and technology, culture, medication, sports, environmental protection, helping poverty and disaster rescue (Article 3). The scope of foreign NGOs is a general and inclusive term, not specific to detail.
Filing and Administration Requirements
To lawfully conduct activities in China, foreign NGOs are required (1) to file a record if for temporary activities, (2) to register as a representative office if for long term activities, (3) to file annual activities planning report, (4) to be funded through proper channels, and (5) to do annual auditing for its financial reports.
The first controversial part is the filing requirements. It is criticized that filing for temporary activities is almost impossible due to the time constraint. However, since the filing is through China counterpart, and the disaster relief and emergency rescue has longer term (within 1 year) to file the record, that worry could be unnecessary.
Unlike other foreign representative offices, Foreign NGO Law has adopted higher standard for annual reports from foreign NGO’s representative office for auditing and examination purpose, including its annual activity planning, year-end annual report and annual working report. Other foreign representative offices do not need to provide annual activity planning report and are not required to publish working report (Article 31).
To make sure the funding is through a legitimate source, Foreign NGO Law strictly limits the sources of fund. Funds are only from (1) fund lawfully transferred from other countries; (2) saving account interest in China; (3) other funds lawfully obtained in China. Representative office of foreign NGOs is not allowed to take donation, and its funds have to be deposited in a special account and can only be used for defined purpose.
Usually in China registration of social organizations or non-profit organizations is part of functions on Ministry of Civil Affairs and its agencies. But Foreign NGO Law designates Administer of Public Security and its provincial agencies as the registration authority. This could be interpreted to security concerns on foreign NGOs’ activities in China. Foreign NGO law elevates the registration authorities to national and provincial level, which is contrary to the practice for foreign company/representative office’s registration that is usually at municipal city level. This elevation indicates Chinese government is sensitive to the administration of foreign NGOs and wants to make sure the registration, reviewing documents is consistent and under central management.
In China, a police officer is concerned about more than public security and criminal investigation. They have responsibilities in other administrative roles, for example, residential registration, issuing driver license, traffic control, and border control. So to take additional administration role for foreign NGO can be understandable even though it is unusual from normal practice. But this indicates that Foreign NGO Law is security oriented legislation in principal objective.
Foreign NGO Law also provides relevant ministries and their provincial agencies are the regulatory bodies for NGOs’ business activities. Those agencies mean the government branches with administrative functions corresponding NGOs’ activities, for example, if the activities of an NGO are about education, then the regulatory body is Ministry of Education, and so on…
Even though both registration administration and regulatory supervision are elevated to national and provincial level, still, the county level of relevant authority can monitor foreign NGOs’ activities.
Unlawful Activities as Listed under Foreign NGO Law
Except to comply other laws and regulations in defining illegality and crime, Foreign NGO Law particularly lists some activities that are unlawful:
Conducting and funding profitable or political activities. So no political activities for foreign NGOs in China; Illegally conducting or funding religion activities. Foreign religion organizations do not allow to set up representative office in China, but are allowed to participate in lawful religion activities (see Provisions on the Administration of Religious Activities of Aliens Within the Territory of the PRC, 1994);Conduct temporary activities without filing record; Setting up the branches without complying rules (not explained in Foreign NGO Law);Receiving donation; Developing new members without complying rules (not explained in Foreign NGO Law).
Proper Understanding of Foreign NGO Law
As introduced previously, Foreign NGO Law was adopted under the circumstances where there had been no law in China to regulate foreign NGOs’ activities and “where there were certain foreign NGOs having done illegal activities in China to endanger China’s national security”. To read Foreign NGO Law as a whole, on the one hand, Chinese government still supports foreign NGOs activities if they are beneficial to China’s social development; on the other hand, Foreign NGO Law sends a clear message that political and other illegal activities are not welcome in China.
Foreign NGO Law regulates foreign NGOs’ activities from the beginning to the end, including their entry to China (through registration process), funding (through funding monitoring mechanism), membership recruiting (not allowed with exception), branch setting up (not allowed with exception) as well as daily activity monitoring (through county level public security authority). Compared with other regulations related to foreign representative office, Foreign NGO Law has higher standards for administration purpose. This indicates politics and national security oriented approach in legislating foreign NGOs. Even so, Foreign NGO Law keeps foreign NGOs’ beneficial activities intact so there shall not have big concern for legitimate activities in China.
Through Foreign NGO Law, China provides general guidance for what foreign NGOs can do and can’t do; it also gives the local government a legal ground how to administrate foreign NGOs activities. This has double effects for both sides. Although this will impose on foreign NGOs more duties for compliance, it will not impact their legitimate activities in China.
Designating Ministry of Public Security as the administration authority under Foreign NGO Law serves the legislation purpose of monitoring foreign NGOs’ activities. But Chinese government understands voice from the international NGO society, so to upgrade regulatory bodies to provincial/national level would make foreign NGO case more seriously handled. Practically, the law does NOT give police officer any power to intervene foreign NGOs legitimate activities.
Some articles argue that Foreign NGO Law give unlimited power for police officer to intervene in foreign NGOs’ activities. This is not true. Political activist who most frequently make this claim should not use certain incidents happened in China to indicate the overall profile of police officer’s behavior in China.
As this is first time for China to introduce national law to regulate Foreign NGOs’ activities, there is still a long way to go to accumulate the administration experience. More detail measures to implement this law will be introduced by different regulatory agencies; more interpretation on some terms used in Foreign NGO Law is needed for further clarification. Unless there is real case, at this moment, no necessary to suspect Chinese government capacity to probably handle the foreign NGO issues. So properly to read Foreign NGO Law, those who are doing or attempt to do some political activities or illegal activities should understand this law before any further engagement; those who are doing supported activities in China, then there should have no worry but just follow the rule like any other foreign entities.