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August 27, 2019

How China Regulates Foreign Non-Governmental Organizations

The many, many hoops that foreign groups have to jump through to operate in China—and why Beijing changed the laws in 2017.

The entrance to the Beijing Public Security Bureau Overseas NGO Management Office in Haidian District is located on a quiet residential street just a few blocks away from a seven-story commercial complex on the Third Ring Road. The office itself is brand-new—everything is in pristine order, from the polished transaction windows in the reception area to the condition of the inevitable black imitation leather couches in one of the private meeting rooms. At the time of my visit, nearly two years following the passage of the “Law of the People’s Republic of China on Administration of Activities of Overseas Non-Governmental Organizations in the Mainland of China” (“ONGO Law”) in January 2017, it was also completely empty.

Taking up the second floor of what could otherwise be any other police station in Beijing, the office itself is a tangible reminder of one of the key features of the ONGO Law: When it comes to managing the affairs of foreign non-governmental organizations (NGOs) seeking to work in China, the Ministry of Public Security (MPS) (公安部, gōngānbù) is very much in charge. This is a significant departure from a previous 10 years of practice, when the Ministry of Civil Affairs (民政部, mínzhèngbù) was tasked with monitoring and reporting on the doings of foreign NGOs. In the ensuing bureaucratic negotiations before and during the drafting of the ONGO Law, perhaps unsurprisingly, the MPS came out on top—and foreign NGOs found themselves subject to unprecedented levels of police supervision and oversight.

“In the beginning, the general consensus was that as long as you’re not doing anything wrong, playing by the rules, working on a non-threatening topic like poverty alleviation, you’d be fine,” says Jessica Batke, a senior editor at ChinaFile who previously spent eight years at the U.S. State Department’s Bureau of Intelligence and Research. “You would have more hoops to jump through, but overall, work could still go on. The first sign that something was going to be fundamentally different about this law was when the police were named as the main implementing authority. Suddenly that consensus was no longer so certain.”

At the time the law came into effect in January 2017, increased MPS involvement was deemed a necessary and practical measure to ensure foreign NGOs were not in a position to “harm China’s national security interests and some other illegal criminal activity,” in the words of Hao Yunhong, then-director of the Foreign NGO Management Office under the MPS. (Given that the current homepage of the Overseas NGO Management Office links directly to an article accusing foreign groups of funding and supporting “violent rioters” in Hong Kong, there is evidence that attitude is still very much alive and well.) However, others insisted that since the MPS was in charge of other types of foreign exchange, this arrangement was only logical, and to the benefit of the “development” of foreign NGOs.

Nearly three years into implementation of the ONGO Law, it is difficult to make a strong case for this latter argument. According to data taken directly from the MPS, foreign NGOs’ efforts to register representative offices have slowed to a trickle. Further, the number and range of foreign NGOs that have been able to formally sponsor or organize a one-off activity or event, or to use the technical term, carry out a “temporary activity filing” (临时活动备案, línshí huódòng bèiàn), remain limited. To understand why, in this week’s SupChina Signal, we’ll explain exactly how the ONGO Law works, the major obstacles it presents to a range of groups, and what this suggests about China’s preferred style of international exchange and cooperation.

What organizations are impacted by the ONGO Law?

Given its roots in national security legislation, the scope of the ONGO Law is purposely broad. Since the release of the initial draft of the law, many have criticized its vague and imprecise language, which in theory sets the same requirements and restrictions on human rights groups as it does trade associations. This lack of specificity begins withArticle 2 of the law itself, which defines foreign NGOs as “not-for-profit, non-governmental social organizations lawfully established outside mainland China, such as foundations, social groups, and think tank institutions.” This definition leaves plenty of room for interpretation—and as a result, plenty of room for doubt. Out of an abundance of caution, even professional and trade associations not traditionally thought of as “NGOs” in the U.S. sense have sought to register in accordance with the law. The potential scope of the coverage of the law is therefore enormous; depending on which figures you prefer, all of the between 1,000 and 6,000 NGOs active in China prior to passage of the law—and any number of organizations who meet the broad criteria set out by Article 2—are subject to the law. This includes, of course, groups in Hong Kong, Taiwan, and Macau, which for the purposes of this legislation are considered “overseas” (境外, jìngwài).

A qualified exemption is provided for “foreign schools, hospitals, natural science and engineering technology research institutions or academic organizations” that engage in “exchanges or cooperation” with peer organizations of the same type in mainland China (Article 53).

What is considered an “activity” under the law?

Foreign NGOs seeking to do anything in China involving organizing an event or even simply sending funding are required to pursue one of two courses of action to legally register their actions:

  1. Register a representative office (代表机构, dàibiǎo jīgòu)
  2. “File” a temporary activity (临时活动备案, línshí huódòng bèiàn)

What exactly constitutes an “activity” under the law is, once again, quite broad; substantial discretion is left to the police department responsible for implementation. Specifically, Article 3 provides that “NGOs may conduct activities beneficial to the development of the public welfare in fields such as economics, education, science, culture, health, sports, and environmental protection, and for areas such as poverty relief and disaster relief.” Beyond this, and listing the types of activities that NGOs may not engage in, such as for-profit, religious, or political activities (Article 5), the law is silent.

While questions of application are less ambiguous in the case of large-scale, public events, where it is almost certain the law will be rigorously enforced, it is less clear what this means for small, private meetings, exchanges, or events. The language of the law does not provide more detailed guidance. The likely intentional end result of this legal language is to force NGOs to choose between three options:

  1. Applying for official permissions for literally any kind of engagement
  2. Quietly implementing smaller-scale events without permission
  3. Opting not to work in China at all

What does compliance with the ONGO Law require?

Both of the formal avenues for legally conducting NGO-related activities in China place a significant operational burden on the foreign NGO in question. First, in order to register a representative office, the foreign NGO must identify—and, crucially, be accepted by, which is far from automatic—a government department sponsor responsible for monitoring and supervising its work. This sponsor, also called the “professional supervisory unit” (PSU) (业务主管单位, yèwù zhǔguǎn dānwèi), must be at the provincial or higher level of government administration, and oversee work in the same substantive area that the NGO itself works in. For example, an environmental NGO may choose to seek out the relevant bureau of the Ministry of Forestry. (The MPS recently released an updated official list of recognized PSUs, available here.) After securing the cooperation of a PSU, the foreign NGO must then formally apply for registration from the local MPS. Assuming the NGO meets specific criteria and is able to satisfactorily submit the copious amount of notarized, authenticated, and translated paperwork involved in this process, then and only then may it begin regular operations. Every year, it must submit a work plan to its PSU and the MPS for review.

With regards to a temporary activity filing, the process is much the same, with a few key differences. Rather than approach a PSU, the foreign NGO must secure the agreement of a Chinese partner organization, which in turn is responsible for submitting the formal application for the activity to the MPS and for any other relevant permissions based on the activity type, e.g., a performance license for a live music event. Financial and activity reports are required, and no temporary activity may last for longer than one year or be automatically renewed.

Both of these processes require a great deal of time, money, and, most of all, insider knowledge about navigating Chinese bureaucratic procedure. Without a presence on the ground or solid local contacts, identifying the right PSU or Chinese partner organization can be difficult, if not impossible. Since a PSU or Chinese partner organization will ultimately be held responsible for the work of the foreign NGO, and is required to take on significant administrative duties to properly monitor and work with the foreign group, there are few incentives to take on such a role. In the event of a rejection or delays, there is realistically very little that can be done, and the law itself contains no formal mechanisms for challenging a refusal or forcing a PSU to enter into a partnership—at which point registration may simply be impossible, if no suitable substitute can be found.

Failure to comply with the provisions of the law may result in loss of legal status in China, seizure of assets, detention of staff, and a ban on future efforts to work in the country for five years. No appeals process is provided in the law.

What has this meant in practice for foreign NGOs in China?

As the statistics demonstrate, the road to registration or temporary activities has been a difficult one for many groups. Tellingly, as Jessica Batke explains, the monthly average of new office registrations had dropped to a rate of only two to three per month, though only 484 offices have been registered in total—for reference, there are over 1.5 million NGOs registered in the U.S., and thousands of foreign-funded groups. In addition, while 1,963 temporary activities have been recorded, only approximately 570 unique organizations have carried them out—meaning there are a significant number of “repeat customers,” as Batke calls them, responsible for most of the activities, suggesting some groups are choosing to operate exclusively through temporary activities rather than register a representative office. The question remains, however: Given the high priority that has been placed on this law by central authorities in China, why are so many groups still encountering issues?

“What you see now are two sets of problems,” Batke responds. “The first is the one that everyone anticipated: Certain groups were simply going to be cleared out. If you’re looking at the law when it was passed in 2016, it was pretty obviously intended to prevent select organizations [that worked on politically sensitive issues] from operating altogether. The second, unanticipated problem is that there would be so many practical barriers to foreign NGOs establishing a presence, even when they are working completely within the bounds of the law. This is due to a wide range of reasons. When things get implemented at the local level, there’s always going to be a variety of implementation, and combined with logistical, financial, and knowledge barriers, there’s plenty of room for things to go wrong. Not having someone on the ground is a pretty fundamental issue, for example—you can’t just show up, find a partner, and apply.”

Once again, this fact compares unfavorably against standard practice in other countries. When Chinese NGOs seek to implement activities in the U.S. or even in Hong Kong, for example, legally speaking, they are treated exactly the same as local NGOs, regardless of the source of their funding. With very few exceptions, there is no separate body of law governing their registration or management. If organizations are able to file the necessary paperwork correctly, there are few meaningful barriers to formal incorporation as a tax-exempt nonprofit organization.

Finally, while statistics abound regarding the number of groups that have been successful in their efforts to work legally in China, an important set of numbers is still missing: How many groups have failed, given up, or been forced to compromise their missions as the price of legal registration. As of this writing, there remain entire provinces that have yet to host a temporary activity, and officially listed PSUs that have yet to accept a single foreign NGO. In a setting where rejection is rarely put into written records by authorities, and few NGOs are willing to openly discuss their experiences, it is impossible to say what the chilling effect of the ONGO Law has been in practice.

This issue also extends to groups that have registered but must have their annual plans reviewed by government authorities. As Batke explains, “People may or may not be altering their missions in China based on what they think they can actually achieve.” And this, indeed, is perhaps the most difficult question posed by the passage of the ONGO Law: At what point is the price of engagement simply too high?

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Siodhbhra Parkin is currently a Fellow at PILnet: The Global Network for Public Interest Law. A former Fellow at the Yale Law School Paul Tsai China Center, she also spent three years at the American...

This article was first published by SupChina.