Final NGO Law Raises More Questions Than It Answers

On April 28, the Standing Committee of the National Peoples Congressannounced the anticipated and contentious "Overseas NGO Domestic Activity Management Law" had passed its third reading and would go into effect. The full text of the law, subsequently released shows that since the second reading in April 2015, limited attempts were made to assuage the outcry that ensued, ultimately leading to Obama raising the issue to Xi Jinping during Xi's State visit in September. Despite the changes made before its passage however, the new law signals remarkably different, and in some cases hostile, conditions for foreign NGOs in China.

The centerpiece of the law is its requirement for all foreign NGOs in China to firstly secure a "professional supervisory unit" as its local sponsor from an approved list that is yet to be published, and secondly register with the Ministry of Public Security (MPS), to whom they will be required to disclose their plans and finances, prior to commencing operations in China. These requirements apply to all NGOs, legally registered in overseas jurisdictions that seek to conduct operations in China, a number estimated at more than 7,000.

Despite opposition during the review process, trade associations were not exempted from the new law. A carve-out was included for "schools, hospitals and natural science or engineering technology research or scholarly organizations", although language in the law is vague about how the exemption would work, and does not explicitly state that such NGOs would be exempt. For the majority of NGOs (USITO included) that fall under the new law, assessing the best path to compliance and its attendant costs will be of paramount importance over the coming months. The law is scheduled to go into effect on January 1, 2017.

Overall, the restrictions introduced in the NGO Law are indicative of the strong, prevailing trend towards re-asserting tight control over civil society, that have emerged in recent years. This same trend is evident in content and publishing restrictions, curbs on the Internet and social media as well as tightened, ideological control over traditional media. Notably, in this case, MPS is directly responsible for administration which could prove challenging for many NGOs seeking to comply, but also suggests that implementation remains an open question with room to maneuver and engage as MPS currently lacks the experience, structure or inter-agency relationships required to manage 7,000+ NGOs.