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Registration of Unit of Non-Governmental Organizations in Ukraine (for Lawyer & Law)

Igor Samokhodskyi, a lawyer of our firm has written an article about changes which had been made to the procedure of non-governmental organization unit establishment in Ukraine (due to new Law of Ukraine “On NGO”).

The article has been written on request of analytical periodical “Yuryst I Zakon” and published in issue number 12 (12.02.2013 – 14.02.2013).

Unabridged text of the article is provided below:

Simplified procedure of public initiatives importation

Establishment of a non-governmental organization unit in Ukraine became cheaper and faster.

One of innovations that was brought by enactment of the new Law of Ukraine “On NGO” on January 1, 2013 (hereinafter – the new law) was change of procedure of non-governmental organization unit establishment in Ukraine (hereinafter – the unit).

Generally the new law simplified almost all procedural aspects of the office establishment but there still are some “interesting” points the legislator couldn’t do without and which may cause problems.

The description should be started with the fact that the new law changed name of the procedure of unit establishment. From now on it will be called accreditation of non-governmental organization unit (hereinafter- accreditation) instead of more common and in my opinion more appropriate “registration”. However the change of procedure name did not go along with change of other key aspect which is the controlling authority. Accreditation is among not that many registration procedures that were left under control of the State Registration Service of Ukraine while the majority of registration procedures are now under control of local justice authorities.

It is worth mentioning that there occurred a significant change of term and cost of registration procedures. Since 2013 the accreditation by the State Registration Service will cost only 20 untaxed minimal incomes instead of amount that equals to 500 USD which was previously defined by the Resolution number 145 of the Cabinet of Ministers of Ukraine dated February 26, 1993. Taking into consideration the simultaneous shortage of application review term from 2 month to 20 business days we can see that the State Registration Service will work twice as fast for the amount of money that is 10 times less than the previous one.

Also the potential applicants should be pleased by the fact that when a decision on unit registration denial is made it will be sent within the term of application review (the State Registration Service lost additional 10 days for sending of letter).

At the same time Section 8 of Art. 20 of the Law of Ukraine “On NGO” has significantly narrowed the powers of public officers in regard to making of negative decisions on accreditation of units. From now on accreditation denial may be based only on incompliance of charter documents with Constitution of Ukraine and laws of Ukraine (previously the majority of such decisions were based on incompliance of charter documents with the provisions of by-laws).

As for the documents that are required for the accreditation the changes are also positive but not so significant:

  1. It was defined that applicant should provide “copies of charter documents of a non-governmental organization”. Previously the form of documents was not defined and the term of “charter documents” was narrowed to “charter (regulations)”;
  2. There is no need to provide separate document about management board of the unit. Now it is enough to provide information about manager and his info in decision on establishment of the unit;
  3. Registration of charter (regulations) of local unit is no longer required and is performed in accordance with the decision on establishment.

It also should be pointed out that the new law does not only describe the required documents more appropriately and shortens term of registration but also provides longer term for notification of the State Registration Service about changes in charter documents of the unit or change of manager (20 days instead of 5).

But despite all the positive changes related to establishment of the unit in Ukraine there are some negative aspects which should be mentioned.

The first aspect is that the new law does not contain stipulations about procedure of accreditation certificate duplicate issuance. It is mentioned in the Order of the Ministry of justice of Ukraine number 1745/5 dated 14.12.2012 though the procedure itself is not completely regulated. Because of this fact one may conclude that those who lose their accreditation certificates may face some problems.

Another aspect that should be highlighted is much more important and is related to the fact that on February 3, 2013 the new law “On Charity and Charitable Organizations” entered into force. Article 25 of the law stipulates that accreditation of representative offices and branch offices of foreign charitable organizations must be performed according to procedure stipulated in the law of Ukraine “On NGO” namely the one that was analyzed above.

And this fact would cause no questions if not Section 2 of Art.3 of the new law which contains the following provisions “This law is not applied to relationships in the field of establishment, registration, activities and termination: … 6) non-commercial entities (which are not voluntary associations) established on the basis of other laws”. So the law “On NGO” stipulates impossibility of accreditation of charitable organizations units being regulated by its provisions (based on Art.85 of the Civil Code of Ukraine “non-commercial entities include entities that do not have intention to acquire profit with further division among members”).

Of course while interpreting Section 2 of Art.3 of the new law literally one may conclude that list of relationships of “establishment, registration, activities and termination” which the law is not applied to does not include the term of “accreditation” and therefore there is no issue. But such position can’t stand any criticism due to the fact that such list is the same as in Section 1 of Art.3 of the new law which stipulates the relationships the law is applied to.

Thus the law of Ukraine “On voluntary associations” brought a number of significant changes to the procedure of foreign non-governmental organizations units establishment: shortened the term, lowered the cost, used more appropriate wording while defining required documents and other. But as we can see the legislator couldn’t do it without “fly in the ointment” so application of provisions of the law to charitable organizations is still a questionable matter".

The material is related to firm’s legal support of public and charitable organizations registration in Ukraine.

Analysis of other innovations of the law of Ukraine “On NGO” is available here.

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