The Civil Society Law

On 24 May 2017, the law regulating Civil Society Work by Non-Governmental Organizations and Other Associations was finally ratified and published in the Official Gazette, six months after having been approved by parliament back in 29 November 29 2016 (the “Law”).[1] Substantively, the law altered six main areas: jurisdiction, scope, establishment, funding, government discretionary power, and penalties. First, the Law now has jurisdiction over all legal entities, regardless of their legal status, which engage in civil society activities.[2] Second, the Law expanded the scope of prohibited NGO activities including those pertaining to political parties, syndicates, and politics as well as conducting opinion polls or field research without prior approval.[3] Third, the law undermines the constitutional right to establish NGOs by mere notification.[4] Fourth, it requires notification of the competent authorities at receiving local funds, and in addition  requires prior approval for collecting local donations, transferring funds abroad, or receiving foreign funding.[5] Fifth, it gives the government greater discretion in interfering with NGO board of directors’ selection as well as gives the administration the right to apply for a court verdict dissolving the NGO on the grounds of minor infractions.[6] Lastly, the law heightens penalties for certain NGO violations to include up to five years in prison. It also introduces a new body – the National Agency for Regulating Foreign NGOs (the “Agency”).

The New Civil Society Law

• Jurisdiction

The Law extends its jurisdiction, which formerly exclusively covered non-governmental organizations and associations, to now cover all entities that engage in civil society activities. The Law defines “entities” as those bodies that engage in civil society activities, regardless of their legal status. Meanwhile, it defines “civil society activities” as all non-profit-seeking activities that are practiced with the purpose of developing society in one of the fields specified in an entity’s bylaws. The Law then prohibits that any entity engages in civil society activities, or any activity that pertains to NGOs, without abiding to this law while also explicitly stating that any activities pertaining to NGOs carried out by any legal persons shall be supervised by the competent authorities as mandated in the law, even if no registration procedures have been commenced. Accordingly, whereas before the violation manifested itself in not acquiring the NGO status while engaging in NGO activities, now, additionally, an entity need not have the legal status of an NGO and still be held liable for a larger range of procedural violations established by the Law. The ramifications of this may include that a non-NGO entity engaging in a plurality of activities, some of which may be construed as civil service activities, may need to attain a license from the competent authority – which is not identified in the law – to engage in those specific activities. Moreover, it may also be required to get approval from the competent authority to open a bank account, be subject to foreign funding and foreign contract restraints and to the competent authority’s inspection of records and premises, as well as be liable for harsher penalties that could go up to 5 years in prison.

• Scope

The extended jurisdiction of the Law must be seen in conjunction with the now expanded scope of prohibited NGO activities. The prohibition now includes any activities that are political in nature, that harm national security, public order, public morality, or public health. Moreover, activities that are going to result in the disruption of national unity, national security, public order, or public morality as well as those that invite people to defy or breach laws or executive regulations are also prohibited. Additionally, it loosened the language prohibiting political party and syndicate activities such that it now prohibits all activities that fall within political party and syndicate scope of work as opposed to limiting it to activities exclusively done by political parties and syndicates.[7] It also prohibits more innocuous activities such as funding or supporting or promoting a candidate’s election campaign, providing financial assistance to political parties, granting educational or professional certifications, and conducting or disseminating opinion polls or field research without presenting it to the Agency or acquiring the relevant license, as the case may be. Lastly, the Law requires that NGOs achieve their goals according to the State’s plan, development needs, and priorities – which harks back to language used in the infamous Law No. 32 of 1964.[8]

• Establishment

Article 75 of the Constitution safeguards citizens’ right to establish NGOs by mere notification. The Law, however, seems to distinguish between establishing NGOs and between NGOs attaining legal status where it states that while NGOs will automatically attain legal status by mere notification while they will be established by notification accompanied by other requirements.  For an NGO to be established, it needs to submit its bylaws which must contain certain information specified in the law to the competent authority which is then required to register an abbreviated version of those bylaws in the freshly minted NGO database. However, in order for the competent authority to register the bylaws, it requires a protracted list of documents and requirements to be submitted by the NGO-to-be and it allows for the executive regulations to mandate additional requirements. By way of comparison, the old law had a closed list of 3 requirements whereas the new law has an open list of 9 requirements. Moreover, the Law inflated the circumstances under which the competent authority may reject the registration request of the NGO-to-be. To illustrate, whereas the old law stated that the competent authority may reject the request if it discovered violations to the article in the law that itemizes specific prohibitions (article 11), the new Law allows the competent authority to reject it if there were violations to the criminal code or any other law, if the registration requirements were incomplete, or if any information was incorrect. The process was otherwise unchanged where the competent authority was mandated to decide on the registration request within 60 days – with one exception. The new Law omitted a critical clause that mandated that the request be considered accepted if the competent authority did not reach a decision within the allotted time. This has the dual effect of doing away with the competent authority’s incentive to respond within the allotted time as well as leaving the status of the NGO-to-be unclear, in the event of the competent authority’s silence.

• Funding

The Law for the first time distinguishes between two types of local access to funds: collecting donations and receiving funding without defining either in the Law. As for receiving funds, the Law requires notifying the competent authority of receiving such funds. As to collecting donations, which was the term used in the old law, it maintains the same requirement of attaining the competent authority’s approval, only now it is 30 days instead of 15 days prior to commencing the collection.[9] The responsibility then falls on the competent authority to notify the Agency. As to foreign funding, whereas the old law prohibited NGOs from receiving funds from or granting them to any entity abroad or any foreign entity represented in Egypt without prior approval of the Minister of Social Affairs, the new Law requires the NGOs to notify the Agency of receiving funds within 30 days of receiving them. The Agency then reserves the right to deny the funds within 60 days of being notified, during which time the NGO is required not to spend the acquired money. Critically, however, the Law instated an unconventional principle whereby it explicitly states that if the Agency does not respond within the allotted time, the acquired funding is considered denied. Moreover, an NGO is not allowed to send funds abroad without the written approval of the Agency. This, however, does not apply to books, publications, scientific and artistic magazines, and membership fees. If the competent body discerns any violations to these funding rules, it may suspend the NGO’s activities for no more than a year or else file with the competent court for its dissolution, or for deposing its board of directors or board of trustees.

• Government Discretionary Powers

As pertains to the composition of an NGO’s board of directors, the Law allows the competent authority, or anyone with vested interest, to notify the NGO to remove any candidates it has deemed to not fulfil the nomination criteria. This is as it was in the old law. What changed is the procedures taken in the event that the NGO does not comply with the competent authority’s request to remove said candidates. In the old law, the competent authority then had to raise the issue in front of one of the dispute resolution committees established by law, which are headed by a court of appeals’ judge and are mandated with examining and settling disputes between the competent authority and the affected NGO. The committee would then issue its decision within 10 days and the either parties could dispute the decision in front of the competent court. This changed, however, such that the competent authority has the power to forcibly depose him and the affected party may dispute the decision in front of the competent court. The competent authority may also file a request to the competent court to depose the board of directors in the event that the board commits any one of a long list of infractions. This includes minor ones such as changing headquarters without notifying the competent authority or not engaging in serious programs for a year. More severely, the competent authority may request the court to dissolve the NGO if it commits a separate list of violations. In both cases, while the court decides, the competent authority may issue a decision suspending the contested activity.

• Penalties

The Law escalated penalties for existent violations and created new ones. In the old law, the maximum penalty was imprisonment of no more than a year and/or a fine that did not exceed EGP 10,000. Now the maximum penalty is imprisonment for no more than 5 years and/or a fine that does not exceed EGP 1000,000. Among other things, this penalty is applicable to any member of an NGO or any entity that engages in NGO activities that receives foreign funding or collects donations in violation of the procedural rules. The court may additionally mandate that the culprit pay twice the amount he has received, sent, or collected as part of the penalty. Significantly, this penalty is also applicable to any bank or financial intermediary that assisted or engaged in such transactions. This penalty is also applicable to anyone who establishes or administers an entity, regardless of its legal status, that engages in civil society activities without adhering to the rules as explicated in the law. In which case, the court may also decide, in addition to the fines, to shut down the entity’s headquarters and confiscate its money. New violations include penalizing any administrative units, other than the competent authority and the Agency, who grant licenses to practice civil society activities, any NGO that changes locations without notifying the competent authority, as well as anyone who conducted or participated in field research or opinion polls in the realm of civil society without attaining prior approval. The Law also holds liable managing directors of the relevant entities for any infractions committed by these entities, if it is proven that he knew about it and has facilitated the commission of the crime.

• The National Agency for Regulating Foreign NGOs

The Law establishes a new body, the National Agency for Regulating Foreign NGOs. The Agency is managed by a board of directors composed of the head and 10 members, 3 of which are representatives of security apparatuses. The Agency is primarily responsible for regulating foreign NGOs by approving their establishment requests and licensing them to give and receive funds. In addition though, it supervises NGO and other entities’ spending to monitor whether any infractions have been committed. To that end, it has the power to examine the bank accounts of all relevant entities.

Conclusion

Overall, the Law creates a more restrictive environment for NGOs as well as other entities who were formerly not subject to its jurisdiction. This is assessed to be one of the more problematic aspects that might directly affect companies who are, for instance, engaged in Corporate Social Responsibility activities. The Law also affects banks as they are held accountable for any funding violations committed by NGOs or other entities engaged in NGO activities. This is particularly pertinent as the Law left undefined critical aspects pertaining to funding issue, specifically not defining the difference between receiving funds and collecting donations. This may well be clarified in the executive regulations, which are expected to be issued within two months of the Law’s publication.   [1] Law No. 70/2017 Regulating Organizations and other Associations Engaged in Civil Society Activities, Official Gazette, Issue No. 20 (bis) (f), 24 May 2017. [2] Law No. 70/2017 Regulating Organizations and other Associations Engaged in Civil Society Activities, Art. 4 & 27. [3] Law No. 70/2017 Regulating Organizations and other Associations Engaged in Civil Society Activities, Art. 13-14, 88(e). [4] Egyptian Constitution (Amended), Official Gazette, Issue No. 3 (bis) (a), 18 January 2014, Art. 75; Law No. 70/2017 Regulating Organizations and other Associations Engaged in Civil Society Activities, Art. 2 & 8. [5] Law No. 70/2017 Regulating Organizations and other Associations Engaged in Civil Society Activities, Art. 23-24. [6] Law No. 70/2017 Regulating Organizations and other Associations Engaged in Civil Society Activities, Art. 34 & 43. [7] Law No. 70/2017 Regulating Organizations and other Associations Engaged in Civil Society Activities, Art. 13; Law No. 84/2002 on Civil Society Organizations and Associations, Official Gazette, Issue No. 22 (bis) (a), 5 June 2002, Art. 11. [8] Law No. 70/2017 Regulating Organizations and other Associations Engaged in Civil Society Activities, Art. 14; Law No. 32/1964 on Private Organizations & Institutions, Official Gazette, Issue No. 37, 12 February 1964, Art. 2 & 12. [9] Law No. 70/2017 Regulating Organizations and other Associations Engaged in Civil Society Activities, Art.23; Ministry of Social Affairs Decision No. 178/2002 enacting the Executive Regulations of Law No. 84/2002 on Civil Society Organizations and Associations, Egyptian Gazette, Issue No. 244 (cont.), 23 October 2002, Art. 57.