Venice, 15.03.2019 – In the wake of recent challenges to the independent functioning of associations and non-governmental organisations (NGOs), the Council of Europe’s constitutional legal experts today adopted a report on standards with respect to foreign funding of non-governmental organisations (NGOs) in Council of Europe member states.
Over the last four years, the Venice Commission has been critical of misinterpretations of european standards – both with and without intent – to discourage foreign funding of NGOs on political grounds.
Council of Europe Secretary General Thorbjørn Jagland requested this new report, which may lead to a recommendation from the Committee of Ministers of the Council of Europe.
The report stresses that the right of associations to seek financial and material resources is protected as an “inherent part” of the right to freedom of association and that this concept has been confirmed already in international instruments, including Article 11 of the European Convention on Human Rights and Article 22 of the International Covenant on Civil and Political Rights.
Furthermore, funding, both domestic and foreign, is seen as an “important condition” for associations to exist and to exercise their functions and fulfil their missions in an independent way, the experts stress.
Previous opinions adopted by the Venice Commission acknowledge that required transparency of NGOs to prevent the financing of terrorism and money laundering are the most commonly invoked motives used by governments for reporting and disclosure obligations. Such obligations can be legitimate and acceptable for stricter controls on NGO funding, according to the report.
The experts also note how Central and Eastern European countries in particular have proven “sensitive” to external political influence and, for this reason, the process of nation-state building or liberalisation leads to “particular regulations” concerning the foreign funding of associations, NGOs and political parties.
But any restrictions on freedom of association, including restrictions on foreign funding, can be considered as pursuing legitimate purposes, only if they aim to avert a real, and not only hypothetical, danger, according to the report.
The report draws a distinction between “reporting obligations” and “public disclosure obligations” for NGOs. While the former can be used to satisfy the legitimate aim of combating terrorism financing and money laundering, the latter cannot, because it is not the public’s duty to combat crime, in particular terrorism financing and money laundering, which require specific instruments at the disposal of the state authorities. Consequently, the obligation to make public the information about the source of funding (public disclosure obligation) does not appear to be a relevant measure to pursue the legitimate aim of combating terrorism financing and money laundering.
However, the report considers that “public disclosure obligations” may be imposed concerning the financial sources of entities formally engaging in lobbying activities. In this case, the public disclosure obligation may be seen as pursuing the aim of ensuring the transparency of the political influence exerted by lobbying groups on the process of formation of political institutions and on the political decision-making process. Nevertheless, “lobbying activity” should be clearly defined in the legislation and be clearly distinguished from ordinary advocacy activities of civil society organisations, which should be carried out unhindered.
Restrictions can only be based on a prior risk assessment indicating plausible evidence of a “sufficiently imminent threat to the State or to a democratic society”, they write. Abstract “public concern” and “suspicions” about the legality and honesty of financing of the NGO sector – without pointing to a substantiated risk analysis concerning specific involvement of the NGO sector in the commission of crimes – cannot justify the restrictions to this right, they conclude. “Any claimed legitimate aim for restricting foreign funding should thus be case-specific and evidence-based.”
Furthermore, any sanctions imposed on associations in case of a violation of obligations stemming from legislation on foreign funding also must be proportionate. In particular, irregularities regarding the fulfilment of reporting or disclosure obligations cannot be qualified as “serious misconduct” which would justify the dissolution of the NGO concerned.
The report – to be published latest 19 March – also examines discrimination against foreign-funded associations, including for instance, “virulent campaigns” against associations receiving foreign funding.
Recommendations made to prevent discrimination and uphold the right of NGOs to source funds, both foreign and domestic, for their independent activities include the following:
– States must create an enabling environment in which associations can effectively operate and facilitate access of associations to funding, including foreign funding, in order to achieve their aims;
– Reporting obligations may be considered to pursue the legitimate aim of preventing terrorism financing and money laundering by enhancing transparency as regarding financing of such activities, but public disclosure obligations are not suitable for this purpose;
– Any reporting obligations should be based on a prior risk assessment concerning the specific involvement of the NGO sector in the commission of crimes such as terrorism financing and money laundering;
– The authorities should ensure that the overlap of additional reporting/disclosure obligations with other already existing measures does not create an environment of excessive state monitoring; in the fight against crime, priority should be given to already existing instruments (banking laws, anti-terror legislation) before resorting to new cumbersome reporting obligations;
– States should refrain from imposing negative labels on foreign-funded associations which may stir distrust of the public in those associations and have a chilling effect on their legitimate activities;
– State authorities should refrain from conducting negative campaign against civil society organisations receiving foreign funding, such as portraying them as acting against the interest of the society;
– Legal provisions concerning the funding of associations and any limitations implied therein should be clear, precise and certain, and should be interpreted and applied in a manner that enhances the effective exercise of the right to freedom of association to ensure that the enjoyment of that right is practical and effective, and not theoretical or illusory.