By Yan Yu and Nick Marro

The 12th National People’s Congress (NPC) Standing Committee, which concluded its recent bimonthly session April 28 in Beijing, passed China’s Foreign Non-Governmental Organization Law, and released a drafts of two other laws for public comment.

Foreign non-governmental organization (NGO) law deliberations began roughly one year ago. The final law made changes to the draft that addressed two of USCBC’s suggestions: to remove limits on the number of China-based foreign representative offices and the percentage of foreign NGO staff organizations can employ. The law takes effect on January 1, 2017.

  • Definition of Foreign NGOs   The term Foreign NGOs, as used in the law, refers to not-for-profit, non-governmental social organizations lawfully established outside of mainland China, such as foundations, social groups, and think tank institutions. It also provides exemptions to the exchanges or cooperation between foreign schools, hospitals, natural science and engineering technology research institutions or academic organizations and their counterparts in China.
  • Public security departments manage registration Public security departments will be responsible for the management of foreign NGO registration. Temporary activity permits are required for foreign NGOs that have not registered but want to initiate activities in China.
  • Elimination of representative offices restriction The final law eliminated the draft’s restriction to one NGO representative office in China.
  • Review of activity plans and work reports The law requires NGOs submit an activity plan for the upcoming year by December 31 to their professional supervisory unit, to eventually be filed with the public security authorities. Work reports for the calendar year must also be submitted by January 31 of the following year. It remains unclear, however, how much approval power these authorities will maintain over NGO activities and events.
  • Limit on number of representatives (expatriate personnel)   Foreign NGOs are limited to employing four representatives—one chief representative and one to three representatives. The final law eliminated the draft’s limit of foreign staff in representative offices to less than 50 percent of staff.

Further USCBC analysis on this law will be forthcoming, particularly on how the law may affect companies’ corporate social responsibility efforts in China through NGOs.

The NPC during this session also released drafts of National Defense Transportation Law and Public Culture Service Protection Law for public comment.

Officials also formally approved the Minamata Convention on Mercury that China committed to in 2013 in Japan. The treaty binds countries to ban the manufacture, import, or export of mercury-added products by 2020.

About the authors: Yan Yu and Nick Marro are business advisory service managers for the US-China Business Council‘s Beijing office. 

Posted by Yan Yu and Nick Marro