On April 28, 2016, the National People’s Congress adopted the Law of the People’s Republic of China on the Administration of Domestic Activities of Foreign Non-Governmental Organizations (hereinafter, the “Law”), which will go into effect on January 1, 2017. The Law is the first piece of legislation on the activities of foreign NGOs in China and fills the previous legal void. The Law covers nonprofit and nongovernmental entities such as foundations, social organizations, think tank institutions established outside of China and regulates their registrations and activities, as well as the supervision and legal responsibilities of such entities.
There are two lawful methods for a foreign NGO to legally conduct activities within the territories of China, namely register and establish a representative organization, or engage in temporary activities after a recordation application has been filed (see Article 9, Paragraph 1 of the Law). Other than the two methods, foreign NGOs may not conduct any activity or effectively conduct any activity within the territories of China and shall not entrust, fund or engage in any activity equivalent to entrusting or funding any entity and individual to commence activities within the territories of China (see Article 9, Paragraph 2 of the Law). Under Article 3, the nature of the activities shall be limited to activities beneficial to the development of public interest enterprises in domains such as economics, education, technology, culture, sanitation, sports, and environmental protection, as well as disaster relief and rescue.
Supervision over foreign NGOs consists of recordation, reporting and supervisory measures, with a violation of any those entailing corresponding legal liabilities. Under the recordation or reporting system, the public security authority under the State Council and public security authorities under the provincial people’s governments are the registration authorities (see Article 6, Paragraph 1 of the Law), while the competent authorities of their business are their competent authorities (see Article 6, Paragraph 2 of the Law). The representative organization of a foreign NGO shall submit to the competent authority by December 31 of each year its activity plan for the following year, which includes project implementation and fund utilization, and it shall apply to the registration authority for recordation within ten days upon the approval of the competent authorities (see Article 19 of the Law). In addition, the representative organization shall submit its work report for the previous year to the competent authority by January 31 of each year and shall submit the same to the registration agency for annual review by March 31 after it has received comments from the competent authority. As for temporary activities, the prior recordation and subsequent reporting regulatory system is used. The Chinese cooperating entity shall prepare the materials and apply to the local registration agency for recordation 15 days prior to the commencement of a temporary activity, and it shall also submit to the local registration agency a written document detailing the circumstances of the activity and the current fund utilization. Concerning the circumstance of the activity and fund utilization.
Under Articles 39 and 43 of the Law, a foreign NGO conducting an activity within the territories of China shall meet the general regulatory framework in Chinese law and submit to the supervision and administration of the corresponding competent authority for the activity so conducted. This Law further regulates illegal foreign NGO actions; if their fund accounts are allegedly involved in illegal activities, a motion may be filed with a people’s court to freeze the accounts after an approval is obtained from the head of the public security agency above the municipal level (see Article 42 of the Law). The anti-money laundering administrative authority under the State Council may also engage in the supervision and administration of the NGOsÕ bank accounts to ensure their compliance of anti-money laundering and anti-terrorism financing laws (see Article 44 of the Law).