Law chokes Chinese NGOs' foreign funding
| Beijing
Sitting in a bare office behind an anonymous steel door, Yu Fangqiang feels under siege.
His small nongovernmental organization, Yirenping, has enjoyed remarkable success in helping HIV and hepatitis B sufferers fight discrimination by Chinese employers, universities, and government departments. For this challenge to the authorities, though, the group is paying a high price.
Last year, police raided Yirenping鈥檚 Beijing office and confiscated all its publicity material and legal aid brochures 鈥� hence the empty bookshelves. In March, officials subjected their accounts to an unusually prolonged investigation and warned them of more to come.
Now, new government regulations are starving Yirenping and other controversial NGOs of funds.
鈥淚 am very worried about our future,鈥� says Mr. Yu, Yirenping鈥檚 chief coordinator. 鈥淚鈥檓 afraid we may have to close.鈥�
NGOs tied up
He is not alone. At a recent meeting of around two dozen NGOs here, none reported having been able to comply with regulations announced on March 1 by the State Administration for Foreign Exchange (SAFE) requiring legally notarized grant agreements before they can receive money from foreign foundations.
For Yirenping, that means they have received no money since November from the US Congress funded National Endowment for Democracy (NED) that keeps them alive.
The 14 activists working for Yirenping are keeping its three offices open 鈥渂y borrowing money from friends on a personal basis,鈥� says Yu. 鈥淏ut we can鈥檛 go on doing that forever.鈥�
鈥淲e are very concerned about how these regulations affect the operation of our grantees in China,鈥� says Jane Riley Jacobsen, an NED spokeswoman.
The SAFE circular said the new rules were 鈥渇or the purpose of 鈥� facilitating the receipt and payment of donations in foreign exchange.鈥� So far they have had the opposite effect, and some observers suspect political motivations behind the regulations.
鈥淭hey want to keep a closer watch on NGOs鈥� foreign relations 鈥� and get better control over the NGO sector and civil society,鈥� says Sarah Davis, head of Asia Catalyst, a New York-based organization that supports Chinese NGOs.
Rules unclear
Not all NGO鈥檚 have been hurt by the new rules. Some receive their grants through Chinese banks that have not yet begun enforcing the regulations. Others, registered with the Civil Affairs Bureau, have had their grant agreements certified by Chinese notaries.
But Yirenping, like almost every other activist group in China working on politically sensitive issues such as Aids or citizens鈥� rights, has not been able to register with the Civil Affairs Bureau and functions instead as a private company. Nor has it been able to find a Chinese notary ready to certify its grant agreement with the NED.
The rules do not specify how or where grant agreements should be notarized, and SAFE has not clarified the question. (The agency did not respond to questions this reporter put in a fax to them.)
鈥淚鈥檝e put in untold numbers of hours of research鈥� trying to work out what the regulations demand, says an NED official working with Chinese grantees, who asked not to be named because of the sensitivity of the issue. 鈥淭hese are loosely written rules with multiple interpretations possible.鈥�
The NED, taking legal advice in China and the US, has concluded that its agreements with Yirenping and other Chinese grant recipients should be notarized by the Chinese embassy in Washington, and is still gathering the required documentation.
鈥淭his route is open and transparent and dictated by law,鈥� says the NED official. 鈥淲e will follow every step necessary to see where that takes us.鈥�
One problem with this approach, however, is that 鈥渓egally speaking,鈥� it gives the Chinese embassy control over which NGOs receive funding by choosing which grant agreements it will notarize, points out Anthony Spires of the Centre for Civil Society Studies at the Chinese University of Hong Kong.
Yu has his doubts too. 鈥淲e are still not close鈥� to getting notarization agreed, he points out. 鈥淎nd we are still unsure whether they will actually be able to do it.鈥�
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