China’s New Nonprofit Law and the Growing Trend Impacting International Philanthropy

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Chinese legislators just passed disturbing legislation granting police broad authority to supervise foreign nonprofits.  The Chinese law requires all foreign nonprofits to register with the Ministry of Public Security and authorizes the police to search nonprofits’ offices and summon their representatives at will.  China has joined Russia and India in citing national security concerns as ostensible grounds for adopting increasingly hostile laws to US and other foreign nonprofits operating in their countries.

Since the 9/11 terrorist attacks, US mission organizations, disaster-relief groups, and other humanitarian nonprofits have needed to implement numerous safeguards to ensure charitable assets do not fall into the hands of, or incidentally support, terrorists.  Such anti-terrorism measures are amply warranted.  But the changing legal and political landscapes in Russia, India, and China present entirely different challenges for nonprofits engaging in humanitarian or mission work in these countries.  The new regulations in these three countries are forcing US nonprofits to develop new and creative legal solutions to protect the ongoing humanitarian and mission work in these countries.

For example, following President Putin’s re-election in 2012, Russia adopted what is commonly known as the “Foreign Agent Law” which requires nonprofits that receive foreign donations and engage in "political activity" (a broadly defined term) to register and declare themselves as “foreign agents.”  Once registered, the nonprofits are required to disclose their status as “foreign agents” on all official fundraising and other communications and are subject to a number of other hostile provisions.  In 2015, Russia enacted an additional law which bars any nonprofit that the Russian Government determines is “undesirable” as a threat to the constitutional order and defense capability, or the security of the Russian state.  NGOs that do not cease all operations are subject to substantial fines and jail time.

Over the last few years, the rise of India’s Prime Minister Modi and the Bharatiya Janata Party (BJP) has significantly increased hostility to US nonprofits engaged in humanitarian work in India, particularly Christian organizations.  The BJP cancelled the licenses of approximately 10,000 NGOs operating in India and is aggressively taking other measures to limit foreign involvement in Indian NGOs.  Any Christian organization “whose purpose is conversion” is also being targeted for closure. 

China’s new law controlling foreign nonprofits is not set to take effect until January 1, 2017.  On its face, however, it appears even more hostile and expansive than its Russian and Indian counterparts.  For example, nonprofits are not allowed to “endanger China’s national unity, security, or ethnic unity,” and they “must not engage in or fund religious activities.”  Accordingly, US and other foreign nonprofits continuing humanitarian and mission work in China should closely monitor how the law’s implementation will impact their current operations.  As in Russia and India, the changing legal landscape will likely require many nonprofits to proactively develop increasingly complex and creative legal systems to ensure compliance with these legal challenges.  The legal and political developments in these three countries create a disturbing trend that adds a layer of legal complexity to US philanthropy overseas, beyond the anti-terrorism considerations still pressing and evolving since 9/11.