This is an abridged translation of the talk given by an official of the NGO Management Office of Beijing’s Public Security Bureau on the occasion of CDB’s forum for Overseas NGOs, held in Beijing on the 6th and 7th of November 2018. Some parts have been omitted for the sake of brevity and clarity.
By the end of October 2018, 418 overseas NGOs had established representative offices in China. Out of those, 146 NGOs established their representative offices in Beijing, accounting for 35% of the national total. There were 1024 filing for temporary activities, 248 of which took place in Beijing, accounting for 23.8% of the national total. Beijing ranks first in China both for the amount of NGOs registered and for filings.
Looking at national and regional distribution, out of the 146 NGOs registered in Beijing, 52 come from the United States, 17 from Hong Kong, 12 from each of Germany, Japan, and Korea, and 41 from Switzerland, the United Kingdom and other 16 countries and areas. From the point of view of the field of work, 65 are related to the economy, 18 to environmental protection, 4 to education, 12 to poverty alleviation, 8 to culture, 8 to health, 5 to technology, 3 to sports, and 13 are in other fields.
When it comes to the cooperation partners in filings, the top three Chinese cooperation partners are the Peking University Education Foundation, the China Association for NGO Cooperation and the Tsinghua University Education Foundation.
The speaker from the PSB giving his talk
Interpretation of the rules and regulations
Chapter II Registration and Submitting Documents for the Record
Article 9 An overseas NGO engaging in activities in the mainland of China shall, in accordance with the law, register an established representative office. Where an overseas NGO has not registered an established representative office but needs to carry out temporary activities in the mainland of China, it shall submit documents for the record to this effect in accordance with the law. Where an overseas NGO has not registered an established representative office, nor submitted documents for the record stating that it intends to carry out temporary activities, it shall not carry out or covertly engage in any activities, nor shall it entrust or finance, or covertly entrust or finance, any organization or individual to carry out activities in the mainland of China on its behalf.
Lots of people have misunderstandings concerning article nine in chapter two.
For example, if the activity area is limited to Beijing, Tianjin and Hebei, how to set up activities in Shanghai?
Some NGOs think that the way to deal with the problem is to submit documents for a temporary activity in Shanghai.
However, this is impossible. NGOs without representative offices need to submit documents, while NGOs which have already registered need to find their professional supervisory unit (PSU) to change their area of activity, which means adding Shanghai to their area of activity.
So, we returned lots of documents from NGOs who wanted to file for temporary activities in Beijing, but who had registered their representative offices in other provinces.
There are two ways to solve this problem. The first is changing the area of activity where they originally registered, and the second one is establishing a new representative office and including the place where they want to carry out activities.
Article 10. Overseas NGOs that meet the following requirements may apply to register and establish a representative office in China according to the scope of their work and the location and needs of their activities.
(1) The NGO was lawfully established outside of Mainland China;
(2) The NGO is independently able to assume civil liability;
(3) The NGO’s aims and scope of activities as stipulated in the organizational charter are beneficial to the development of the public benefit sector;
(4) The NGO has been in existence for a continuous period of at least two years outside of mainland China and has conducted substantial activities during that time;
(5) Conditions provided by other laws or regulations.
NGOs which haven’t registered representative offices need to pay attention to article ten, especially the five rules within it. If any of these five rules is violated, that NGO can’t register a representative office in China.
The problems are mainly associated with the following two articles: “The NGO is independently able to assume civil liability” and “The NGO’s aims and scope of activities as stipulated in the organizational charter are beneficial to the development of the public benefit sector”.
“Able to independently assume civil liability” refers to who will be the legal subject if legal disputes happen in China. If the overseas NGOs does not have the ability to independently bear civil liability, they cannot establish a representative office in China. Thus, they need to issue a certificate to prove their legitimacy, and their ability to bear civil liability.
As for the “organizational charter”, we have had lots of NGOs bring their material to us, and everything else was in order, they had even found their PSU, and they were just waiting for our agreement so they could go to their PSU and get a stamp. But we found that in their charter there were no purposes and no descriptions of benefit to the development of the public benefit sector. So, it didn’t work.
Some NGOs make some minor mistakes when they submit their material. All overseas material needs to have passed through the notarization and certification process abroad, and a lot of organizations have not done this. In addition, all foreign materials need to receive a certification from the notary’s office that the translation is consistent with the original.
Moreover, lots of organizations called us and asked: “Where can we find the information of the PSUs?”
The information of the PSU is on the overseas NGOs affairs’ service platform, which is on the platform of the ministry of public security. It has the directory of PSUs at the ministerial and commission levels, and you can also find a link for Beijing (including a directory of PSUs in Beijing) on the platform. You can find the information of different PSUs according to your needs.
Article 16 Overseas NGOs that have not established representative offices but need to conduct temporary activities in the mainland of China shall do so in cooperation with State organs, people’s organizations, public institutions and social organizations (hereinafter referred to as “Chinese partners”).
Article 16 expresses the following meanings:
First of all, only NGOs that haven’t had representative offices can set up temporary activities, while NGOs that have representative offices cannot.
Secondly, when setting up temporary activities in China, NGOs need to cooperate with the four above mentioned groups of organs and organizations. The cooperation partners can’t be individuals or enterprises, they can only be the four types mentioned in the article.
I will explain the four organs and organizations clearly to you. “State organs” are bureaus (委办局) under the government. “People’s organizations” are social organizations which don’t need to register with the Ministry of Civil Affairs. For example, large-scale and national organizations, such as the China Disabled Persons’ Federation, the All-China Women’s Federation, the All-China Federation of Industry and Commerce, the China Writers Association, and the Associations for Science and Technology at the municipal level. “Public institutions” refer to public institutions with a registered certification, for instance centers and schools under ministries and commissions. “Social organizations” are domestic social organizations which are registered with the Ministry of Civil Affairs.
Article 17 Chinese partners of overseas NGOs conducting temporary activities shall handle examination and approval procedures in accordance with State regulations, and submit to local registration authorities the following documentation and information for their records 15 (fifteen) days before temporary activities commence:
(1) Documentary and material evidence of the legal establishment of the overseas NGO;
(2) A written agreement between the overseas NGO and its Chinese partner;
(3) Relevant information including the name, purpose, location and duration of temporary activities;
(4) Evidence of costs and funding sources as well as the bank account details of the Chinese partner;
(5) Approval documents obtained by the Chinese partner;
(6) Other documentation and information specified by laws and administrative regulations.
In emergency situations, such as disaster relief and rescue operations, where an overseas NGO needs to carry out temporary activities in the mainland of China, the timeframe for filing records mentioned in the preceding article shall not apply; however, the duration of temporary activities shall not exceed 1 (one) year. Where there is a need to extend this deadline, documentation and information shall be re-submitted for the record.Where registration authorities believe that the temporary activities on record do not conform to the provisions of Article 5 of this Law, they shall immediately notify the Chinese partner to cease temporary activities.
This article contains specific regulations for setting up temporary activities. I will explain this article word by word.
The first sentence gives a clear definition of the cooperating subject. The Chinese cooperation partners need to go through examination and approval procedures according to the law, which means that all the process of filling is undertaken by the Chinese cooperation partner. Overseas NGOs only need to provide the related materials which are required by the Chinese cooperation partner, and file with the registration management organ at the location 15 days before the activity starts.
Chinese cooperation partners must pay attention that the 15 days are prescribed by law, so we don’t have the authority to modify it. Thus it is important to avoid mistakes over this inflexible rule, because a lot of refusals have happened as a result.
“In emergency situations, such as disaster relief and rescue operations, where an overseas NGO needs to carry out temporary activities in the mainland of China, the timeframe for filing records mentioned in the preceding article shall not apply.” Emergency means something that breaks out suddenly. When sudden-onset disasters happen, the Chinese cooperation partner will not be limited by the 15-day regulation. However, if the situation is not urgent, it is not permitted to submit the documents only three to five days in advance. This condition only takes action under special situations like disaster relief and rescue.
“The duration of temporary activities shall not exceed 1 (one) year. Where there is a need to extend this deadline, documentation and information shall be re-submitted for the record.” The cooperation agreement signed by Chinese cooperation partners and overseas NGOs may be three to five years. If in the first year the filing was carried out according to the law, then is the agreement still valid in the following year? Is it necessary to go back to the overseas NGO management office and file again?
This is needed, because filings for temporary activities are valid at most for one year.
“Where registration authorities believe that the temporary activities on record do not conform to the provisions of Article 5 of this Law, they shall immediately notify the Chinese partner to cease temporary activities.” Until now, we haven’t found any activities not in accordance with this regulation. If we did find one, we would resolutely stop the activities, and carry out the relevant legal process towards the Chinese cooperation organization.
More specifically, five materials are required according to our guideline.
1. Filling Form for Overseas NGOs Conducting Temporary Activities
This form is the same as the form for establishing representative offices, it also necessitates Chinese cooperation organizations to fill it out online, and after it is filled out it will automatically move to the PSU to receive its seal. Writing by hand or printing out the blank form and filling it yourself do not conform to the standard.
2. Certificates and materials to prove that the overseas NGO is legally established
As the municipality with the largest amount of registered overseas NGOs, Beijing provides lots of convenience to overseas NGOs and Chinese cooperation partners. This can be seen from the requirements for certificates and materials to prove the overseas NGO is legally established, which we only ask for once a year. For example, Germany’s Brot fur die Welt cooperates with Chinese social organizations, and they only need to submit their proof or registration material once. If other social organizations cooperate with Brot fur die Welt in the same year, they don’t need to provide the original script of their registration certificates, and only need to provide a photocopy. However, the period of validity is only one year. The documents need to be re-submitted next year, because it is necessary to make sure that certain organizations continue to exist.
3. The written agreement between the overseas NGOs and the Chinese cooperation partner
Lots of Chinese cooperation partners have asked the question: “Are there specific requirements for the written agreement? Is it possible to send us a template.” This agreement is a civil agreement, as long as the agreement contains the time, content and funds of the program, and it doesn’t violate the law there is no problem. When you submit the materials, the original script and photocopy are both required, but we will only keep the photocopy.
4. Certificates for funds, resources and the bank account of the Chinese cooperation partner
If the overseas NGO contributes one million for the temporary activity, they need this document to prove their program and funding situation. In this document, they need to write down the cooperation units and the location of the activities clearly. Whether the full sum is in dollars or RMB, both the representative office and the headquarters need to seal and sign.
If the Chinese cooperation partner also provided funds, they also need a document. Moreover, the Chinese cooperation partner also need to add their bank account in the document. In fact, two documents are needed, which are the overseas NGOs’ proof of funding and the Chinese cooperation partner’s proof of funding. Even if the Chinese cooperation partner does not provide funding, they still need to provide a document stating the activity’s funding amount and their bank account.
5. A document from the Chinese cooperation partner showing approval obtained
It is important to communicate with the department supervising the Chinese cooperation partner, and report to them in advance. Moreover, please pay attention to “the report of the temporary activity must be submitted to the PSB within thirty days of its ending.” This is also part of the law, and must not be forgotten.
Article 19 Each year before December 31, representative offices of overseas NGOs shall submit to organizations in charge of their operations a plan for their activities in the following year, including projects and use of funds, and shall submit the same to registration authorities within 10 (ten) days following approval by organizations in charge of operations. Where it is necessary to alter an activity plan under special circumstances, this shall be told to the registration authority immediately for the record.
As the end of the year is near, two important pieces of work are coming up, the annual work plan and annual report.
I have summarized several important questions on how to fill in and submit the form of the annual work plan:
- The content of the annual work plan
- The time to submit the annual work plan
The first question is about the annual work plan. When you carry out an activity there will be an overarching framework. For instance in the field of environmental protection, conducting research about the environment is needed, but the partner and funds also need to be determined. If this big activity can be disassembled into smaller ones it is obviously better, that way we can provide more convenience for the overseas NGO. For every registered overseas NGOs, the management office will allocate a police officer to them, and consult with them about how to disassemble a big activity into a small one. In any case I suggest writing about the activities in as much detail as possible.
The second question is about the time to submit the annual work plan. We will contact the PSU and ask if the related organization has submitted it before December 31st. We will also dispatch a notice that the annual check will start. If we don’t receive the annual plan, we will ask the related department.
Article 22 Overseas NGOs that have representative offices shall manage the funds for use in the mainland of China through the representative offices’bank accounts put on the records of registration authorities. Overseas NGOs carrying out temporary activities in the mainland of China shall manage the funds for use in the mainland of China through their Chinese partners’ bank accounts, implement separate accounting and earmark funds for specific purposes. Overseas NGOs, Chinese partners and individuals shall not use any means except the banks accounts specified in the preceding two paragraphs to receive or make payments of funds for their activities in the mainland of China.
In general, NGOs can only use the account which they submit to us to manage the funds, and can’t use any other accounts.
We have already found out some cases of illegal use of funds in succession, and I will show two examples to you.
Example 1: A foundation transferred funds from its headquarters to its partners directly, without going through the submitted account.
Transferring funds directly to the partner is strictly prohibited. The money must be transferred from the submitted account to the partner’s account, all funds must pass through the submitted account.
Example 2: A foundation already registered their representative office in China, and the consent sheet they signed involved specific usage regulations about fund management. But the funds of the foundation’s Beijing representative office is managed by their chief representative’s private account.
This violates the regulation, because all the organization’s funds in China need to go through the submitted account. If the use of the funds goes against the related regulations, we will find the problem during the annual review.
As for the annual review, the major content includes an annual work report and an audited financial accounting report. Both of them are filled in online, and generated automatically. The PSB, the finance ministry and related departments are still drawing up auditing regulations for the audited financial accounting report, but before the regulations come out, we need to follow the Accounting System of Civil Non-Profit Organizations.
Please feel free to make comments about the imperfections in my speech. And we welcome all of you to the Beijing PSU’s NGO Administration Office to discuss things at any time.
“The full English name and abbreviation of overseas NGOs”
—— More than one overseas NGOs wrote their English name incorrectly when they submitted their documents. And some NGOs even made mistakes about the “certificate of country registration”. We all know that lots of global organizations have branches all over the world. For instance, one foundation was established in the United States, and its headquarter is in the United States, but they have a branch in Hong Kong. All materials they submitted were about Hong Kong, but the country of registration was the United States. This is not correct.
“Time of Registration”
—— When writing down the time of registration, please make sure to check the certificate of registration. Also, when you need to put down a signature, make sure that all the documents, such as the application and the proof of the sources of funding, have the same signature.
“The name of the representative offices”
—— The standard name actually is “The name of the overseas NGO + Country(Area) + Beijing + Representative office”. With lots of organizations’ name, for example “xx Foundation (the United States) Chinese representative office”, according to the requirement, if the overseas NGO’s name doesn’t include a nationality, you need to mark it out with brackets. In some western countries, the registered NGO and registered company are in the same place. For example, can we write “xx Foundation Limited Company (Hong Kong) Beijing Representative Office”? We’d like to do things in accordance with the organization’s wishes as far as possible, and not add “limited company”.
—— The activity fields are many, such as education, poverty alleviation, the environment and health. But NGOs can only choose one major field.
“The signature of the chief representative and the agreement of the PSU”
—— There are two key points I want to reminder you of. The first one is about the form. Writing by hand and printing are both forbidden. Related information must be filled in on the Overseas NGOs information platform. The form will be generated automatically. After the form is generated, you ask your PSU to sign it. The second point is that when you fill in this form, you must get permission form the PSU, because all the information that is related to the registration is in this form. If the PSU does not agree, the form is invalid.
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