On the 28th of July, at the “Registration of Overseas NGOs in China” Workshop held in Beijing by China Development Brief, the Director of Jingshi Law Firm Dr. Zhang Lingxiao gave a presentation on the Overseas NGO Management Law, providing detailed answers to questions regarding the preparation of documents required for registration, the application procedures and examples of violations of the rules, among other topics. Below is a transcription of the PowerPoint from Dr. Zhang’s presentation.
Q1. How does an organisation prove that it is an Overseas NGO?
- Proof of legal establishment– issued by the official body of the relevant overseas registration department.
- Proof of Non-profit status – submitting the relevant certification as required under the specific circumstances of individual countries, such as registration with the Charity Commission in the United Kingdom.
Q2. In a situation where there there are multiple units responsible for supervising the same field of work, how is the specific supervisory unit determined?
According to the reply given by the Overseas NGO Office of the Ministry of Public Security, such a situation is to be negotiated by multiple operational units. Ultimately, the responsible unit is to be decided based on the nature of the main field of concern.
Q3. What documents are required for proof of legal establishment? Are original documents needed or are photocopies accepted?
Documents for proof of legal establishment are issued by the official registering body at the time of registration and include items such as a business license and other documents. Generally speaking, original copies of important documents are not needed; official documents or photocopies will be sufficient.
Q4. What are the requirements for the submission of the constitution?
The purpose of submitting the constitution is to assess whether the operations of the overseas NGO are related to the public good. The constitution must be submitted in full, and cannot be taken out of context.
Q5. What should the “Establishment of Overseas NGO Representative Office Registration Authorisation” contain?
To take the requirements of the Beijing Public Security Bureau as an example, the Registration Authorisation should be issued by the Head Office of the Overseas NGO, and must include two parts:
Firstly, the authorisation from the Head Office to set up a Beijing Representative Office. It must show that the Head Office agrees to set up a Beijing Representative Office and authorises the Beijing office to exercise some of the authority of the Head Office. State as clearly as possibly the location of the office, do not simply write ‘In China’ or ‘nation-wide’.
Secondly, the names of the proposed Chief Representative and of the representative staff. There is no need to write the names of all the employees. The Authorisation must be signed or stamped by the person in charge at the Head Office. The Authorisation does not need to be notarised, but if it is in a foreign language it must be translated by a qualified translation organisation.
The two parts of the Authorisation can be put in two separate documents, but when submitting on the relevant website they should be combined into a single PDF document.
Q6. How can an organisation prove that it has existed for more than two years abroad and conducted substantive activities?
- Financial audit reports from the last two years issued by a third party, in accordance with the requirements of the host country.
- Annual reports from the last two years signed by the person in charge.
Q7. What is accepted as proof of identity for the Chief Representative? What form should the proof of a lack of criminal record take?
- Accepted identity documents include mainland China ID cards, foreign ID cards, passports, Hong Kong, Macao or Taiwanese corresponding documents, etc. Overseas documentation must be notarised.
- Regarding the proof of a lack of criminal record, the Chief Representative can sign a fixed-format certificate of a lack of criminal record.
Q8. What must be included in the “Proof of residence” materials for the proposed Representative Office?
- Property rights certificate – to prove existence of the house.
- Leasing contract – to prove a leasing relationship.
Q9. What are the specific requirements for the “Agreement documents of the professional supervisory unit”?
- Official documents.
- A statement to “agree to be the professional supervisory unit of the Beijing Representative Office of XXX Organisation”, or a similar wording.
- The contact person and contact phone number for the professional supervisory unit; must also be stamped with the official seal of the ministerial unit or bureau-level unit with the right to examine and approve foreign affairs.
Q10. Which of the documents required for the application of a Representative Office must be notarised?
The documents required to be notarised are the “three certificates, one constitution”: supporting documents and materials for the legal establishment of the Overseas NGO, certification materials to prove that the Overseas NGO has existed for more than two years and conducted substantial activities, the identification of the foreign Chief Representative and the constitution of the Overseas NGO.
The specific procedure of notarisation varies from place to place, but all must be certified by the PRC embassy or consulate in the host country.
Q11. Is it necessary to translate all foreign documents?
Depending on whether the host country’s embassy or consulate requires the submission of translated documents at the time of authentication, we can distinguish two categories of situations:
The first category includes host countries such as the USA, where the embassy does not require the provision of Chinese translations to certify documents. After obtaining the certification, the Overseas NGO is required to find a qualified translation organisation in Mainland China in order to translate all the documents (including the Notarisation). A qualified translation organisation is one that can stamp the material with the file number.
In the second category, if the host embassy does require Chinese translations at the time of certification and has approved the translations in order to certify, then the registration authority will also approve them.
In both situations, the notarisation must be translated. Material written in Traditional Chinese must be accompanied by Simplified Chinese and signed by the person in charge; these need not be notarised. Material in Hokkien or Cantonese must be accompanied by the Mandarin version of the materials, which must be notarised.
Q12. Is there a way to remedy the situation if the registration authority makes a decision not to grant registration?
There are no provisions in the Overseas NGO Management Law for this issue, but we believe an organisation has the right to try to remedy the situation. Therefore, the Overseas NGO can apply for reconsideration by the administration. Alternatively, according to the rules of “Administrative Procedure Law”, the Overseas NGO can refuse to accept the decision made by the registration authority and file an administrative lawsuit; however, the principles of equality and reciprocity must be applied.
Q13. Is the Overseas NGO required to submit the original proof of establishment every time it carries out a temporary activity?
The first time that the notarised proof of establishment is submitted shall continue to count, and it need not be resubmitted for other activities carried out within a year’s time. Upon first submission to a foreign province or city, the authenticity and timeframe of the submitted materials should be verified by means of a contact mechanism. A photocopy can be collected to show eligibility.
Q14. Which agency provides the material to prove the source of funding for a Temporary Activity project?
Regarding proof material for the source of funding for a Temporary Activity, it is up to each donor to explain the circumstances under which donations have been made and to provide certifications. The donor needs to sign the documents, and all foreign language material must be translated.
If the Overseas NGO is fully funded, the organisation must issue a statement along the lines of “all funding is financed by our organisation”. If the Overseas NGO and the Chinese partner each contribute 50% of the funding, they must each make a statement on the contribution. In both cases, the Chinese partner is required to provide a bank account number and the name of the bank of deposit. They must also issue a statement explaining that “this account will be used for all of this activity”, the account is for “special funds” etc… This statement may be issued separately or attached to the Chinese partner’s funding certification. Even if the source of funds is already stated in a written agreement between the Overseas NGO and the Chinese partner, the material proving the source of funding for a Temporary Activity project will still need to be submitted for filing.
Q15. If there is more than one Overseas NGO or Chinese partner involved in the same activity, which organisation should issue the proof of funding?
It is up to the organisation with the most funding to issue proof of the unified source of funds, and state the funding situation of the other organisations. For example, if there are three Overseas NGOs contributing 1,000,000, 300,000 and 200,000 respectively, then the Overseas NGO contributing 1,000,000 shall issue the certificate, and state the funding situation of the other two organisations.
Q16. Which agency examines and approves social organisations without a competent PSU, comprised of a cooperating Chinese partner unit and Overseas NGO, registered in the Ministry of Civil Affairs?
Social organisation without a competent PSU registered in the Ministry of Civil Affairs shall be approved and issued with the relevant documents by the department with the right to approve foreign affairs.
Q17. Can regional Representative Offices operate across regions?
In accordance with the provisions of the “Guidelines on Registering a Representative Office and Filing to Conduct Temporary Activities for Overseas NGOs”, when an Overseas NGO establishes a registered Representative Office, they can opt for an area of activity within the provincial administrative district, or at a higher division, but the chosen area of activity must correspond with the actual situation of the Representative Office’s business scope and activities.
Q18. Why can branches not be set up in Mainland China? What are the exceptions?
- According to the explanation of the relevant personnel in the National People’s Congress Law Committee, since there are no restrictions on the number of Representative Offices to be established by Overseas NGOs, it is of little significance to set up branch offices.
- An exception will be made for foreign natural science academic institutions where the academic department has already set up a branch in China. These established branches will be approved.
Q19. Why can an Overseas NGO not fundraise in China? Can they passively accept donations?
- According to the provisions of the Charity Law, only charitable organisations that have been qualified for public fundraising can fundraise. Overseas NGOs and their Representative Offices do not conform to the relevant provisions of the Charity Law and cannot engage in fundraising.
- There is no clear provision in the law for the passive acceptance of donations. Some people believe you cannot accept donations but citizens, corporations and others in ownership of property have the right to free disposal of property; thus, if the law forcibly stipulates that Overseas NGOs cannot accept funds there arises a legal controversy.
Q20. Why can an Overseas NGO not develop a membership? What are the exceptions?
- According to the explanation of the relevant personnel in the National People’s Congress Law Committee, Overseas NGOs in China do not qualify as legal entities and their temporary activities are short-term activities; therefore, developing membership is not in keeping with the rules of Chinese law.
- However some Overseas NGOs have developed a membership in China, mainly the Foreign Society of Natural Sciences whose membership consisted of Chinese experts, scholars and scientists. This is an existing state of affairs. Additionally, the Chinese government supports scientists and scholars to join foreign science institutions, so these are exceptions to the State Council’s rule.
1. Minor violation – qualified but not within the rules
Example: Overseas NGO A has successfully established a Representative Office in Chinese province B, to run competitive activities and increase the innovative capabilities of students in province B.
Scenario 1: Now, a university in province C partners with the Representative Office of NGO A to develop an activity on universal copyright and related legal knowledge.
Scenario 2: Whilst conducting activities in province B, the Representative Office of NGO A asks each participating student to pay a contestant fee, generating high profits.
Scenario 3: A month after the establishment of the Representative Office of NGO A, the registration authority discovers that documents were counterfeit at the time of registration.
In light of the three cases mentioned above, NGO A must assume what kind of legal liability?
Legal liability 1: The public security organ of the municipality shall issue a warning or give orders to cease activities for a stated period of time.
Legal liability 2: The unlawful effects and illegal gains shall be confiscated.
Legal liability 3: In serious circumstances, the registration certificate shall be revoked and a ban imposed on the Temporary Activity.
Legal liability 4: Within 5 years of the date of revocation and ban, no further Representative Offices or Temporary Activities shall be established in China.
2. Relatively serious violation – unqualified but still carrying out activities
Example: Overseas NGO D has appointed Chinese citizen E to act as its agent in China, funding E to recruit staff in China to launch a campaign for the protection of small animals and to develop substantive activities.
Question 1: Overseas NGO D has not registered a Representative Office or filed a Temporary Activity. What kind of sanction will it face for funding the actions of Chinese citizen E?
Question 2: Can Chinese citizen E accept the appointment and funding of NGO D? What legal liabilities must they assume?
Legal liability 1: The public security organ of the municipality shall issue a ban on or give an order to cease the illegal activity.
Legal liability 2: The unlawful effects and illegal gains shall be confiscated.
Legal liability 3: The directly liable personnel shall be issued with a warning; in serious circumstances, they shall be detained for a maximum of 10 days.
Legal liability 4: Within 5 years of the date of repeal, revocation and ban, no further Representative Offices or Temporary Activities shall be established in China.
3. Serious violation – endangering national security and interests
Example: Overseas NGO F establishes a Representative Office in China and develops a programme in Chinese universities to promote the mutual exchange of learning between talented individuals at universities in China and abroad.
Scenario 1: Over a sustained period of time, the Representative Office of NGO F disseminates false statements from the foreign media about the Chinese government in their activities, leading the university students astray and causing an adverse social impact.
Scenario 2: NGO F is involved in economic exchange with Chinese university professors, steals Chinese national secrets and incites the professors to organize students to carry out political activities that undermine national unity.
In the above situations, what kind of sanctions will NGO F face?
Legal liability 1: The registration certificate shall be revoked or a ban imposed on the Temporary Activity.
Legal liability 2: If it does not constitute a crime, the public security organ of the municipality shall detain the directly liable personnel for a maximum of 15 days.
Legal liability 3: If it does constitute a crime, in addition to the punishments mentioned above, the directly liable personnel shall be held criminally responsible.
Legal liability 4: The organisation may be included in the ‘unwelcome list’; no further Representative Offices or Temporary Activities shall be established in China.