NGOs

 

On 20 July 2012 the President signed Federal Law No. 121-FZ amending certain legislative acts regulating activity of non-commercial organizations acting as foreign agents.

The Law introduces the definition of a foreign agent: a non-commercial non-governmental organization (NGO) is considered a foreign agent if (i) its financing comes from foreign sources (e.g. foreign states and/or citizens, international and/or foreign organizations, Russian entities which are financed from abroad, etc.) and (ii) it performs political activity in the Russian Federation (which is defined by the Law as organizing and carrying out political actions aiming to influence state authorities in their decision making and change their state policy except activities in the areas of science, culture, art, public health, social support and protection, protection of maternity and childhood, sport, protection of plants and animals, charitable activity and volunteerism).

All existing NGOs which fall within the described parameters are to apply to be registered as foreign agents in the special Register of Foreign Agents (most likely to be maintained by the Ministry of Justice). Failure to apply for registration as a foreign agent may result in holding up the NGO’s activity. Persistent failure to report on the NGO’s activities may result in a criminal liability of up to two years’ imprisonment.

The Law imposes additional state reporting requirements on NGOs-foreign agents; these are also subject to unscheduled check-out (review) on the additional grounds introduced by the Law. The regular reporting obligations include, in particular: (i) reports on activities and staffing of their management bodies – every six months; (ii) information on the amount of received financing, the purposes of income spending and the disposition of property – quarterly; and (iii) audit reports by Russian auditors – annually. If the received financing equals to or exceeds RUB 200,000, it is subject to control by the Federal Service for Financial Monitoring.

The new rules do not apply to NGOs of state-owned corporations, state or municipal budget NGOs, employers’ unions, duly registered commercial chambers, and religious organizations.

The Law amends, in particular, Federal Law No. 7-FZ “On Non-commercial Organizations” and Federal Law No. 115-FZ “On Countermeasures with Respect to Laundering Revenue Derived from Criminal Activity and Terrorism Financing” and the Russian Criminal Code.

The Law will enter into force on 21 November 2012.

For further information please contact Igor Ostapets or Irina Dmitrieva in the Moscow office of White & Case, tel + 7 495 787 3000 .

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