What is controversial about Egypt’s NGO law?

On August 22, Washington decided to withhold almost $300 million from Egypt over what it deemed a “controversial NGO law,” referring to a new law that passed on May 31 to regulate the work of civil society organizations.

Three weeks after the decision, the US department of State has yet to issue a statement citing Washington concerns over the new legislation. Over the coming days, Egypt Today will run a series of in-depth articles discussing the newly approved NGO law, which was approved by President Abdel-Fatah Sisi six months after its ratification by the Parliament, and which regulates over 48,000 NGOs in Egypt.

The purpose of the new law

Egypt is not the only country in the world that seeks to legally regulate the work of civil society. Well-established democracies, such as the United States and the majority of European countries, have laws that govern civil society and allow the state to monitor and supervise NGO work. The new NGOs law gives a one-year time span to comply with the new terms or organizations will have to suspend their activities and shut down.

Despite the fact that civil society and non-governmental organizations work voluntarily and contribute to charity efforts, they have been abused in more than one instance by illegal groups for political gains, according to a study released by the Liberal Democracy Institute (LDI), an Egyptian think tank. The United States and European countries have suffered at the hands of these groups; a case in point being the outlawed Muslim Brotherhood and its Palestinian branch, Hamas.

According to the LDI report, the U.S. Federal Bureau of Investigations (FBI) released several documents proving the violations committed by many NGOs affiliated with the Brotherhood and Hamas.

Egypt is still trying to recover from the impacts of the Muslim Brotherhood’s one year in power. The Muslim Brotherhood began as a charity group, before branching into the political arena. Most of the Brotherhood’s violent affiliates were recruited and trained as militias through the so-called “charity organization,” owned and operated by the MB since the early 2000s.

“The Egyptian state needed to regulate the work of similar groups under the rule of law in a way that allows the state to supervise civil society and charity work. The old NGO law had too many loopholes that allowed illegal activities to be practiced by illegal groups, which seek receiving funds and execute destruction and disorder,” reported the LDI study.

The LDI report stipulated that before its ratification in November 2016, the House of Representatives took enough time to study and discuss all the articles of the approved NGO law; the Parliament spent 18 months studying that law, taking into consideration opinions and recommendations by Egyptian and foreign legal experts and statesmen.

In November 2014, Egypt’s latest Universal Periodic Review at the United Nations Human Rights Council received a high number of recommendations about issuing a new NGO law. Under such domestic and international pressures, issuing the new law was at the top of the Parliament’s priorities, when it first convened in 2015. However, since the approval of that law, Egypt has received much observation and criticism.

“Most of the criticism of the new NGO Law revolved around a particular point. Under the old NGO Law no. 84/2002, Egyptian NGOs had [a difficult] experience with filing an infinite number of governmental documents to acquire legal registration. In some cases, the government bureaus took (several) months, if not years, to respond to the NGOs regarding the status of their registration.

As a result, a provision in the new NGO Law to provide documents upon establishment to the respective government authority raised concerns. . . . However, the provision in the new NGO Law to submit documents to the government upon establishment, does not contradict with the constitutional right of the association to acquire legal personality upon notification,” said the LDI report.

Rather, it is a routine procedure that shall follow the acquirement of the legal personality, with the purpose to establish a clear relationship between the government and the new association.

In addition, the new NGO Law states that the government authority has to complete the documentation procedure with the new association within a maximum period of sixteen days,” LDI continued.

The second controversial point is new regulation imposed by the law on foreign funding of local NGOs. The new law makes it obligatory to make foreign funding for any Egyptian NGOs a transparent process and subject to government approval.

The new law establishes a new body called "The National Authority to regulate NGOs Operations."

Advantages of the new NGO, according to Article 16, include:

• Exemption from paying registration fees of contracts of all kinds, such as property contracts and mortgage, where the association is a party, as well as all pertaining ratification fees.

• Exemption from taxes and stamp duties, whether they are currently imposed or shall be imposed in the future, on all kinds of contracts, authorizations, written and printed forms, official records, and other similar documents.

• Exemption from all property taxes for all buildings owned by the association, provided that the association uses these buildings for achieving its stated purpose, and the association may not change the nature of the activity without acquiring the approval of the relevant minister.

• Acquiring a discount of 30 percent on rail transport fees of equipment and machines related to the association’s activities.

• Exemption from taxes and fees due to custom authorities, imposed on exported equipment, machines, tools, production utilities, and vehicles related to the association’s activities, as well as the gifts and aids the association receives from abroad, upon a decree by the competent prime minister, based on a recommendation from the relevant minister and a review by the Minister of Finance, provided that the exported utilities are necessary for the main activity of the association.

The association may not dispose of utilities, before five years after their export, without a prior decree from the relevant minister in agreement with the Minister of Finance, unless the association has paid the due custom fees and taxes.

The new NGO Law encourages foreign NGOs to work in Egypt. Unlike the old NGO Law no. 84/2002, it has devoted two full sections to explain the fine details of how a foreign NGO or its representative office may register, operate, and receive funds for its projects.

The new NGO Law also allows foreign communities living in Egypt to establish their own bond or association as a foreign NGO, to defend the community’s interests and offer not-for-profit services to the members of the community.

The new NGO Law has resolved the problem of approving foreign funds that local NGOs suffered under the old law and creates a new mechanism for the new law governing the establishment, operation and funding of NGOs under one umbrella instead of different entities and ministries.