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Home > Brief News > 2015

2015

The Overseas NGO Management Law of the People’s Republic of China (Draft) (Second reading)

CDB has translated the second draft of the Overseas NGO Management Law of the People’s Republic of China. The draft has been released online on the NPC website for public consultation. See here for more details. 
 
 
CONTENTS
Chapter 1. General Principles
Chapter 2. Representative Offices
Chapter 3. Temporary Activities
Chapter 4. Regulation of Conduct
Chapter 5. Favorable Policies
Chapter 6. Supervision and Management
Chapter 7. Special Regulations
Chapter 8. Legal Responsibility
Chapter 9. Supplementary Provisions
 
Chapter 1.General Principles
Article 1. This law is designed to standardize and guide all activities carried out by overseas NGOs within China, and to protect their rights and interests, while promoting exchange and cooperation.
Article 2. This law concerns overseas NGOs carrying out activities within China. ‘Overseas NGO’ refers to non-profit, non-government social organizations that have been established outside of mainland China.
Article 3. Overseas NGOs that work in fields such as economic, education, science and technology, health, culture, sports, environmental protection and charity may carry out activities that legally develop public welfare.
Article 4. Overseas NGOs that conduct legal activities within China will receive the protection of the law.
Article 5. Overseas NGOs that conduct activities in China must operate according to Chinese laws; not threaten China’s security or national and ethnic unity; must not harm China’s national interests, societal public interests, or the legal rights of other groups and citizens; and must not disrupt public order and morality. Furthermore overseas NGOs must not conduct or fund for-profit activities or political activities. They also must not illegally conduct or fund religious activities.
Article 6. Overseas NGOs that conduct activities in China must do so in the name of a legally registered representative office(代表机构). Unregistered representative offices that wish to conduct activities must obtain a temporary activity permit (临时活动许可) in advance. It is prohibited for overseas NGOs that are unregistered or have not legally obtained a temporary activity permit to conduct activities within China, or commission domestic Chinese individuals, legal persons, or organizations to conduct activities within China.
Article 7. The Public Security departments of the State Council and provincial level public security authorities are in charge of the registration and management of overseas NGOs that conduct activities in China. The relevant departments of the State Council and provincial level governments, as well as organizations authorized by the State Council or provincial level governments, are the Professional Supervisory Units (业务主管单位)of overseas NGOs conducting activities in China.
Within the scope of their professional capacity, the relevant departments of the State Council and local governments at the county level or above are responsible for the management of overseas NGOs. The state will establish mechanisms to manage overseas NGOs and be responsible for researching, coordinating, and resolving significant problems.
Article 8. The state will establish information management and statistical systems to collect data about overseas NGOs.
Article 9. The state will commend those overseas NGOs that provide outstanding contributions to the development of Chinese public welfare.
Chapter 2. Representative Offices
Article 10. Overseas NGOs that meet the following requirements may apply to establish a representative office (代表机构) in China:
(1) The NGO was lawfully established outside of mainland China;
(2) The NGO is independently able to assume civil liability;
(3) The NGO’s aims and scope of activities are beneficial to the development of the public welfare sector;
(4) The NGO has been existent for a continuous period of at least two years outside of mainland China and has conducted substantial activities during that time.
(5) Conditions covered by other laws or regulations.
Overseas NGOs may only establish one representative office within China.
Article 11. Overseas NGOs that apply to establish a representative office must have received the consent of a Professional Supervisory Unit (业务主管单位).
Article 12. Overseas NGOs must apply to register a representative office from the registration management authorities within 30 days of formally identifying and getting approval from a Professional Supervisory Unit. To apply for a registration permit for a representative office, overseas NGOs must submit the following documents to the registration management authorities:
(1) A completed application form;
(2) Documentation and other evidence that the overseas NGO meets the conditions set out in Article 10, Section 1 of this law;
(3) Identification documents for the chief representative of the proposed overseas NGO representative office, a CV and a check that shows that he or she has no criminal record;
(4) Documentation that states the address of the overseas NGO’s proposed representative office.
(5) Documentation that lists the funding sources of the overseas NGO.
(6) Documentation that shows an agreement from a Professional Supervisory Unit to supervise the overseas NGO’s proposed representative office;
(7) Any documentation and material required by other laws or regulations.
The registration management authorities that review the application of overseas NGOs to establish a representative office in China, may commission experts to conduct a review if deemed necessary. The registration management authorities must issue a decision within 60 days after receiving an application. 
Article 13. The registration management authorities must give a certificate of registration for those overseas NGOs’ representative offices that they approve and make public announcement of that registration. Registration information must include:
(1) Name;
(2) Address;
(3) Scope of activities;
(4) Location of activities;
(5) Chief representative;
(6) Professional Supervisory Unit;
(7) Duration of residence.
The representative office of an overseas NGO will use their registration certificate to obtain an organizational code, register for taxes, get an official seal, and establish a bank account at a bank in mainland China. They must file copies of the above documents with the registration management authorities.
The representative office of an overseas NGO does not have the status of a legal person.
Article 14. The registration management office will not give approval to an application from a overseas NGO to establish a representative office if:
(1) The provisions stated in articles 3, 5, and 10 of this law are not met.
(2) Truthful circumstances are hidden or false information is provided in the application process
(3) The chief representative candidate has a criminal record;
(4) There are other outstanding issues related to other laws or regulation
Article 15. An overseas NGOs’ representative offices can receive approval for a maximum of five years. If, when the registration period has expired the NGO wishes to continue activities in China, they must apply for a new registration. This new application must be delivered to the registration management office within 60 days before the expiration of the existing registration, after getting approval from its Professional Supervisory Unit.
Article 16. When the representative office of an overseas NGO wishes to alter their registration information, they must apply within 30 days of getting approval from their Professional Supervisory Unit.
Article 17. The representative office of a overseas NGO may be publically de-registered by the registration management authorities if:
(1) The overseas NGO closes its representative office in China;
(2) The overseas NGO ceases operations;
(3) The representative office fails to complete a new registration application before the existing duration of residence ends;
(4) The overseas NGO has its registration certificate withdrawn in accordance with law;
(5) The activities of the NGO are no longer permitted due to other reasons;
If, after an overseas NGOs’ representative office has been deregistered, there are related outstanding issues or legal liability, the overseas NGO will bear responsibility.
Chapter 3 Temporary Activities
Article 18. Overseas NGOs without a representative office in China that wish to carry out temporary activities in China should first secure a temporary activity permit. The duration of a temporary activity can not exceed one year.
Overseas NGOs that wish to conduct temporary activities in China must cooperate with state authorities, mass organizations, public institutions, and social organizations (hereafter referred to as the Chinese partner organization (中方合作单位).
Article 19. Overseas NGOs that wish to conduct temporary activities must first obtain the approval of a Professional Supervisory Unit. However, state authorities or units that have been approved by the Public Security departments of the State Council (国务院公安部门) as the Chinese partner organization may also go through approval procedures according to national regulations.
Article 20. Overseas NGOs must apply for a temporary activities permit within 30 days of receiving approval from the Professional Supervisory Unit or relevant department. Applications for a temporary activities permit must include:
(1) A completed application form;
(2) Documentation showing that the applicant overseas NGO meets the requirements stipulated in Article 10, section 1 of this law;
(3) A written agreement between the overseas NGO and the Chinese partner organization;
(4) Proof of funding sources and the bank account of the Chinese partner organization (中方合作单位);
(5) Approval documents provided by a Professional Supervisory Unit or relevant department;
(6) Other documentation required by other laws or regulations.
The registration management authorities may arrange for experts to review the application of an overseas NGO to conduct temporary activities, if deemed necessary.
Article 21. Overseas NGOs may arrange for a Chinese partner organization to assist in dealing with the Professional Supervisory Unit and registration management authorities.
Article 22. The registration management authorities must issue a decision within 30 days of receiving an application to carry out temporary activities. If approval is given, a temporary activity permit will be issued.
Information that is required in the application for temporary activities includes: the overseas NGOs’ Chinese name, the name of the Chinese partner organization, the activity they are applying to run, the regional scope of the activity, the duration of the activity, and the funding for the activity.
Chapter 4. Regulation Of Conduct
Article 23. If an overseas NGO has established a representative office in China, all of that NGO’s activities that take place in China should be managed by the representative office.
The representative office of an overseas NGO must operate activities using their registered name, and within the operational boundaries that have been approved.
Unless otherwise regulated for by the State Council, overseas NGOs and their representative offices must not establish any branch office in China.
Article 24. The representative office of an overseas NGO must submit an activity plan that details the projects that they intend to run and how they intend to use their funding in the coming year. This plan should be submitted to the Professional Supervisory Unit before November 30th every year. After it has been approved, the representative office must submit it to the registration management authorities for filing within 10 days.
Before overseas NGOs begin a project they must submit their registration documents, temporary activity permit, and a description of their project to municipal level and above (under which administrative districts are established) public security authorities who administrate the district in which the project will be carried out.
Article 25. Overseas NGOs that run projects in China must not make additional conditions that require Chinese partner units or the project’s beneficiaries to break Chinese laws and regulations, or disrupt public order or morality.
Article 26. Funding for activities run by overseas NGOs in China can include:
(1) Money that has been legally raised abroad;
(2) Interest gained from deposits made in Chinese banks;
(3) Other money that has been lawfully acquired within China.
Overseas NGOs in China must not use funds that come from other sources, other than those described above, for their activities in China.
Unless otherwise approved by the State Council, overseas NGOs and their representative offices in China must not conduct fundraising activities or accept donations in China.
Article 27. The representative office of an overseas NGO must use the bank account that was filed with the registration management authorities to handle money inside of China.
Overseas NGOs that run temporary activities in China must use their Chinese partner organization’s bank account to handle funds in China. A separate account record should be kept to ensure the money is solely dedicated to these temporary activities
Overseas NGOs must not use alternative methods to give or receive funds inside of China, other than those described above.
Article 28. Overseas NGOs must use funds according to the operational scope that was approved when they registered their representative office or as described in their agreement with their Chinese partner organization.
Article 29. The representative office of a overseas NGO shall manage their finances according to Chinese accounting law and employ accountants that have been legally certified in China to manage its accounting. A Chinese accounting firm must audit the financial records and the results made public.
Article 30. Overseas NGOs that run activities in China must make bank transfers in accordance with China’s existing regulations that deal with overseas exchange.
Article 31. The representative office of an overseas NGO must legally make a tax registration, tax declarations, and pay taxes.
Article 32. If the representative office of an overseas NGO wishes to recruit staff or volunteers in China, they must commission a local overseas affairs service unit, or other unit as designated by the government, to carry out their employment matters
The representative office of an overseas NGO must file information about their staff and personnel arrangements with their Professional Supervisory Unit and the registration management authorities.
Overseas NGOs that conduct temporary activities in China must not directly recruit volunteers. If they do require volunteers they must do so through their Chinese partner organization.
Article 33. Representative offices of an overseas NGOs and overseas NGOs conducting temporary activities must not openly or covertly recruit members within China.
Article 34. The representative office of an overseas NGO should have a chief representative. They can also recruit up to 3 other representatives if needed.
A person cannot serve as chief representative or representative if:
(1) They have limited or no capacity for civil conduct;
(2) Possess a criminal record;
(3) Have been the chief representative or representative in the representative office of an overseas NGO that has been deregistered or had registration certificates withdrawn within the last 5 years;
(4)They fail to meet the conditions of other laws or regulations.
Article 35. Overseas personnel must not account for more than 50% of the total number of staff employed at a representative office of an overseas NGO. Staff employed at one representative office of an overseas NGO cannot simultaneously work at the representative office of another overseas NGO.
Article 36. Overseas NGOs that conduct temporary activities in China must do so using the name that was approved on their temporary activities permit.
Once a project has concluded, overseas NGOs and their Chinese partner organizations must submit reports to their Professional Supervisory Unit and the registration management authorities. The report must include a description of the activity and its use of funds, and must be submitted within 30 days of the cessation of the activity.
Article 37. The representative office of an overseas NGO must submit an annual work report to their Professional Supervisory Unit. After the Professional Supervisory Unit has given its feedback, the report must be sent to the registration management authorities by March 31st     for annual inspection.
The annual work report must include an accounting report, audit reports, and descriptions of the activities and changes to staff or organizational structure. 
Article 38. Individuals, legal persons, and organizations in China must not be hired by, accept financial support from, or represent or covertly represent, overseas NGOs that have not legally registered a representative office or obtained a temporary activities permit..
Chapter Five. Favorable Policies
Article 39. Relevant departments at all levels of government must enable overseas NGOs to carry out lawful activities in China.
Article 40. The registration and management authorities together with relevant departments, shall stipulate areas of work and project directory that overseas NGOs can work in, publicize Professional Supervisory Unit Directory to guide the activities of the Overseas NGOs.
Article 41. Relevant government departments at the county level and above must provide policy advice and activities guidance to overseas NGOs in accordance with the law.
The registration and management authorities shall set up online information service platforms to make public the process of overseas NGOs applying for representative offices or temporary work permits.
Article 42. Overseas NGO representative offices shall enjoy tax benefits and other favorable policies in accordance with law.
Article 43. Fees cannot be charged for the annual inspection of overseas NGOs’ representative offices.
Article 44. Overseas chief representatives and other expatriate representatives of an overseas NGO’s representative office, may use the organization’s registration certificate, documents proving the representative’s status, and other materials to apply for work permits in accordance with law.
Chapter Six. Supervision And Management
Article 45. Overseas NGOs conducting activities in China shall be supervised and managed by Professional Supervisory Units, public security authorities, and relevant departments.
Article 46. Professional Supervisory Units will perform the following supervision and management responsibilities:
(1) Provide advice on setting up a representative office, changing registration status, carrying out temporary activities, and implementing new projects;
(2) Provide advice on the annual inspections of the representative offices of overseas NGOs;
(3) Guide and oversee representative offices of overseas NGOs and overseas NGOs with temporary permits to ensure that they carry out activities legally;
(4) Assist public security authorities and other departments in investigating and punishing illegal activities by overseas NGOs and their representative offices.
Article 47. Public security authorities will have the following supervision and management responsibilities:
(1) Register representative offices of overseas NGOs;
(2) Approve overseas NGOs to carry out temporary activities;
(3) Carry out annual inspections of the representative office of overseas NGOs.
(4) Oversee activities carried out by overseas NGOs and their representative offices’ and investigate and punish illegal activities.
Article 48. National security departments, diplomatic and overseas affairs departments, fiscal department, financial supervision and management departments, the customs, tax authorities, departments in charge of overseas experts and other relevant departments shall supervise and manage overseas NGOs and their representative offices according to the law and their respective responsibilities and area of work.
Article 49. When performing their supervision and management responsibilities, the public security authorities may legally take the following measures:
(1) Enter the Chinese offices and venues of activities of overseas NGOs to carry out on-site inspections;
(2) Question organizations and individuals involved in the investigation, and request an explanation of related issues;
(3) Access and copy documents and materials related to an investigation, and seal and keep documents and materials that might be removed, destroyed, hidden, or tampered with;
(4) Close down or seize venues, equipment, or properties related to an investigation.
Article 50. Public security authorities may access the bank accounts of organizations or individuals related to an investigation. If the approval of a person in charge of a public security authority at the municipal level and above (under which administrative districts are established) is gained, bank accounts related to illegal activities may be frozen with permission from a court. The bank accounts can also be frozen according to the Criminal Procedure Law of the People’s Republic of China, if they are related to suspected criminal activities.
Article 51. The anti-money laundering departments under the State Council shall supervise and manage the opening and use of bank accounts by representative offices of an overseas NGOs and by their Chinese partners. They may also conduct anti-money laundering and counter-terrorism monitoring of bank accounts of individuals, legal persons, and organizations in China that receive funding from overseas NGOs.
Overseas exchange management authorities must cooperate with public security authorities on inquiries into overseas exchange transactions related to the activities of overseas NGOs, and provide monitoring information on those transactions.
Chapter 7. Special Regulations
Article 52. Overseas NGOs seeking to found or co-found foundations or societal organizations (民办社会机构) must apply for registration as required by Chinese laws and regulations. Refer to relevant provisions in Chapter 2 for methods of registration. 
Article 53. The foundations or societal organizations founded or co-founded by overseas NGOs must not:
(1) Conduct activities that violate Article 5 of this law;
(2) Conduct activities in the name of overseas NGOs, or represent or indirectly represent overseas NGOs in carrying out activities within China;
(3) Carry out activities with overseas NGOs in the name of their Chinese partners without permission;
(4) Conduct fundraising activities
Article 54. Articles 49, 50 and 51 of this law apply to the supervision and management by public security authorities and relevant departments, of foundations and societal organizations founded or co-founded by overseas NGOs.
Chapter 8: Legal Responsibility
Article 55. If overseas NGOs applying to set up a representative office in China provide falsified materials or use other methods to conceal the truth, and if overseas NGOs and their Chinese partner organizations applying for temporary activity permits provide falsified materials or use other methods to conceal the truth, the registration and management authority may impose a fine of no more than 200,000 RMB; In serious cases, the registration and management authority may revoke the registration certificate or temporary activity permit.
Article 56. Public security authorities of municipal level and above (under which administrative districts are established) shall give warnings or orders to stop activities within a given period to representative offices of overseas NGOs, overseas NGOs carrying out temporary activities, or their Chinese partners; confiscate illegal assets or unlawful gains; impose fines of no more than 200,000 RMB; and in serious cases, revoke registration certificates or temporary activity approval documents if any of the following situations is found:
(1) Information is not submitted to be put on file kept by the registration and management authorities in accordance with articles 13, 24, and 32 of this law;
(2) Falsify, fabricate, lease, or loan out registration certificates, stamps, or temporary activity approval permits;
(3) Carry out activities exceeding registered scope of operations and regions, and activities beyond the boundaries of temporary activity permits;
(4) Carry out or fund for-profit activities;
(5) Use names in violation of Articles 23, and 36 of this law;
(6) Obtain or use funds in violation of the law;
(7) Set up or use bank accounts in violation of the law;
(8) Accounting is not conducted as required by the law;
(9) Spending plans, accounting and auditing reports are not submitted or disclosed as required by the law;
(10) Conduct fundraising activities or accept donations in China against the law;
(11) Refuse to accept inspections that are required by the law;
(12) Fail to register any changes as required by the law;
(13) Recruit or indirectly recruit members in China;
(14) Set up illegal branch organizations in violation of the law;
(15) Hire staff or recruit volunteers illegally;
(16) Violate other provisions of this law.
Article 57. If any of the following situation occurs, organization shall be banned by the public security authorities at the municipal level and above (under which administrative districts are established). Have illegal properties and gains confiscated; Individual(s) directly in charge be warned , and in serious cases, be detained for up to 10 days and fined up to 50,000RMB:
(1) Carry out activities in the name of overseas NGOs or representative offices of overseas NGOs without registrations or obtaining temporary activity permits;
(2) Continue to carry out activities in the name of representative offices of overseas NGOs when registration certificates have expired and have not been renewed;
(3) Continue to carry out activities in the name of representative offices of overseas NGOs after registration has been revoked, registration certificates have been suspended , or registration has been canceled ;
(4) Continue to carry out activities in China after temporary activity permit has expired or been revoked;
(5) Carry out activities in the name of branch offices of overseas NGOs against the law.
Article 58. If any of the following situations occurs, the public security authorities at the municipal level and above (under which administrative districts are established) can order illegal activities to be stopped; confiscate illegal properties and gains; warn individual(s) directly in charge, and in serious cases, detain them for up to 5days and issue fines of a maximum of 50,000RMB:
Overseas NGOs without a registered representative office or a temporary activity permit commission or fund individuals, legal persons, or other organizations in China to carry out activities in China.
Foundations or societal organizations founded or co-founded by overseas NGOs carry out activities in the name of overseas NGOs, and work directly or indirectly as agents of overseas NGOs;
(3) Foundations or societal organizations founded or co-founded by overseas NGOs carry out fundraising activities, be involved in, or fund for-profit activities
(4) Individuals, legal persons, or other organizations in China work with overseas NGOs despite knowing that these NGOs have not registered or obtained temporary activity permits.
(5) Individuals, legal persons, or other organizations in China accept authorizations, fund, or work directly or indirectly as agents of overseas NGOs that are not registered or without temporary permits to carry out activities, or help processing funds for overseas NGOs.
Article 59. If any of the following situations occur, overseas NGOs, representative offices of overseas NGOs, and foundations and societal organizations founded or co-founded by overseas NGOs shall be revoked of their registration certificates or temporary activity permits, or banned by registration and management authorities; criminal charges shall be brought against them in cases where crimes are committed; and where violations do not constitute a criminal offense, the public security authorities of municipal level and above (under which administrative districts are established) may authorize detention of no more than 15 days for the person directly in charge and other individual(s) directly responsible:
(1) Subvert state power;
(2) Undermine ethnic solidarity and engage in separatism;
(3) Incite resistance against enforcement of state laws and administrative regulations;
(4) Collect state secrets or intelligence;
(5) Spread rumors, libel, or publish and disseminate other harmful information that undermine state security or harm national interests;
(6)Carry out or fund political activities or illegally carry out or fund religious activities;
(7) Other activities that undermine state security and harm national interests or societal public interests.
Article 60. Overseas NGOs and representative offices of overseas NGOs that are deregistered, revoked of registration certificates or temporary activity permits must not apply to set up offices in China or carry out temporary activities within 5 years from the date of deregistration or revocation.
Overseas NGOs that carry out activities without registering or obtaining temporary activity permits may not apply to set up offices in China or carry out temporary activities within 5 years from the date of cancellation of their activities.
Overseas NGOs violating article 59 of this law must not establish offices or carry out temporary activities in China.
If the registration certificates of foundations or societal organizations founded or co-founded by overseas NGOs are revoked, the overseas NGOs cannot apply to found or co-found foundations or societal organizations in China within 5 years from the date the registration was revoked.
Article 61. Representative offices of overseas NGOs that are ordered to stop operations within a certain period of time, are de-registered , or have registration certificates revoked, shall turn in their registration certificates, official seals, and accounting documents to be sealed and stored by the registration and management authorities. For organizations that are deregistered or whose registration certificates have been revoked, the registration authorities shall publicly announce the cancellation of their documents and official seal.
Article 62. For foreigners violating this law, the public security authorities or state security departments may order their departure within a given period of time, have them repatriated, or deported.
Article 63. State employees who abuse power, are negligent, or corrupt in managing overseas NGOs shall be given disciplinary sanctions if their behavior does not constitute criminal offenses.
Article 64. Where violations of this law constitute a crime, criminal charges shall be brought in accordance with law.
Chapter 9. Supplementary Provisions
Article 65. “Societal organizations” in this law refer to lawfully registered organizations organized by non-state resources, and engaged in social service activities.
Article 66. For Chinese and overseas cooperation in establishing educational institutions, laws and regulations such as the “Law on the Promotion Of Non-public Schools of the People’s Republic of China”
Article 67. This law shall come into force on: _____________

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