“Region” International Analytical Center (RIAC) in partnership with Human Rights and Enlightenment Public Union
POLICY BRIEF
23 October 2014
Baku, Azerbaijan
Who will be the relevant executive authority: Government or NGO Council?
Additions and amendments were made a few times to the Law of the Republic of Azerbaijan “On Grants” and the Law of the Republic of Azerbaijan “On Non Governmental Organizations (public unions and funds) adopted by the National Assembly (Milli Majlis) of the Republic of Azerbaijan in 1998. Amendments to the latter were made on 21st of December in 2009. Amendments to the Law “On Grant” were made on 15th of February in 2013 and 17th of December in 2013.
However, these amendments made an impact on the general process; it did not lead to the reasonable problems in the activity of NGOs, discrimination of foreign donors. Amendments mainly covered financial accountability, prohibition of donation and funds received without contract. But it is not excluded that amendments made to the Law of the Republic of Azerbaijan “On Grants” at the National Assembly of the Republic of Azerbaijan on 17 October 2014, will make troubles for the activities of NGOs. At the same time, this situation will set serious hindrances to the activity of foreign donors. Additions and amendments have already been adopted by the parliament. They will be applied after the approval by the President of the Republic of Azerbaijan. Principal issues in the new additions and amendments are as follows:
Article 2, Additions to the paragraph 5: “branches and representative offices (branches and representative offices of NGOs of foreign countries undergone state registration according to the agreement provided by the law of the Republic of Azerbaijan “On Non Governmental Organizations (public unions and funds)) of foreign legal entities undergone state registration in the Republic of Azerbaijan shall act as a donor after gaining the right to give grants in the territory of the Azerbaijan Republic. Reference of relevant executive authority on its compliance to the financial and economic reasonability is required in order to obtain the right of giving a grant”.
5.1. “The procedure of the acquisition of the right to give a grant by donors specified in section 5 of this Article shall be determined by the relevant executive authority”.
Article 3, Added to the paragraph 2: “…such recipients shall receive grants from donors specified in Article 2. Section 2 and 4 of this law including donors of non-profit legal entities having branches and representative offices (branches and representative offices of NGOs of foreign countries undergone state registration according to the agreement provided by the law of the Republic of Azerbaijan “On Non Governmental Organizations (public unions and funds)) undergone state registration in the Republic of Azerbaijan”.
Article 4. 4.2 (with Annex)| The procedure for the registration of grant contracts (decisions) shall be determined by the relevant executive authority.
Adopted additions and amendments pose a few questions which are serious and still have unknown answer:
Firstly, which government authority will be determined as the relevant executive authority that is specified in additions and amendments or newly authorized? It is very important. Because any ministry, unfortunately, does not understand the NGO philosophy, NGO approach correctly. If reference about the activities of civil society organizations operating in places is given by the local executive authorities, it will cause serious problems. Because there are still such executive authorities who understand “non-government” word combination as organization acting against the government.
Secondly, it’s not clear if the reference, regarding the compliance to the financial and economic reasonability of the grant of the relevant executive authority, for the purpose of obtaining the right to give a grant, in accordance with the profile of grant, should be acquired from separate governmental bodies or a single one;
Thirdly, on which basis will the procedure of the registration grant contracts (decisions) be determined and which government authority will act as a relevant executive authority; its being a single body is important. Because the separate ministries and agencies being the “relevant executive authority” appropriate to the theme may lead to procrastination and individual approaches. 
Fourthly, will foreign organizations, international donors accept the requirements of the Law; because procrastination, adjustment with “relevant executive authority” for each given grant etc. may lead to their rejection to give grant. It is true that this is currently in compliance with the adopted law. Educational institutions, government agencies, ministries and committees also receive grants, not only NGOs. It causes a danger for the governmental bodies. For example, the government of Azerbaijan has twinning projects with European Union and these are for the adaptation of the working mechanism of the Ministries and agencies of Azerbaijan to European standards. The problem is expected to occur relating to this issue.
There is another important component as well. Each year scholars, students and scientific organizations become the winners of hundreds of grant competitions. What will scholars being the winners of the grants on an individual basis do? The initiative of “Horizon 2020” Scientific Innovations of European Union is being implemented. The budget of this program planned for 2014-2020 is 80 billion euro. It is expected that private sector will allocate 40 billion euro. Total of 120 billion euro is for 28 member states of EU and for the countries included to the New European Neighborhood Policy. Azerbaijan is also included to this Policy. This program already has appointed coordinators more than 20 in the Academy of Sciences and other scientific institutions. It turn out that if there is no agreement, citizens, scientists and organizations of Azerbaijan will be left aside from this huge budget.
Another component is the opening of the representative offices in Azerbaijan and the acquisition of license by all donors in order to give grants. In fact, there are some donors that they don’t want to open a representative office, but also they are not interested in long-windedly correspondence with state agencies. Basically, NGOs of Azerbaijan convinced donors to work with them by negotiating. But, of course, these donors had no special interest for working in Azerbaijan.
Fifthly, how will the appeals and registration process of foreign organization and international donors accepted these requirements be carried out?
First of all, we should note that it is well know from the practice that in most cases mainly, ministries or the Cabinet of Ministers act as a relevant executive authority specified in the law. Specifically, majority of powers are granted to the relevant agency of the Ministry of Justice (Notary and General Registration Department). However, according to the current situation, NGOs may have some serious problems to go through certain procedures in this agency. Until today, NGOs encounter enormous difficulties relating to the registration in the Ministry of Justice. Nevertheless, the registration process in the practice of the other countries is simple. For instance, notification and this process are carried out within the period of 3 days in courts of Georgia. However, this process takes several months in Azerbaijan, in general, sometimes applicant NGO is not registered. In recent years, banks operating in the country caused problems regarding the bank accounts of NGOs. Banks did not allow NGOs to conduct transactions with grant funds in their bank accounts without the notice of the Ministry of Justice. It causes serious problems in the acquisition of notice from the Ministry of Justice and its presentation to the banks. Majority of NGOs cannot get a notice. It is already 3rd month that notices are not granted. Many NGOs have such projects that their first step was implemented; funds were put into bank account for the 2nd step, but second part of the allocated funds had been “frozen” in the bank account as the notice was not given by the Ministry of Justice. Certainly, it would be unfair to blame the Ministry of Justice. The uncertainty of the situation arose put the Ministry of Justice in deadlock.
Therefore, referring to this practice, it is not excluded that there will be serious problems regarding the relevant executive authority specified in additions and amendments. That is why government should clarify the issue of the relevant executive authority and consider the implementation of procedures easier and without confronting bureaucratic obstacles. According to the experts and NGOs, if governmental body performing the administrative activity is elected as relevant executive authority that is specified in additions and amendments and newly authorized, it is not excluded that there will be problems whether about the procedure of the registration of grant contracts (decisions), or about the applications and registration process of foreign organization and donors accepted these requirements. At the same time, if separate bodies are elected whether according to the profile of grant, in connection with the acquisition of reference of relevant executive authority regarding the compliance to the financial and economic reasonability of the grant, for the purpose of obtaining the right to give a grant, in this case it will lead to the problems as well.
But there is another positive practice. It is about the Council of State Support to Non-Governmental Organizations under the President of the Republic of Azerbaijan. Firstly, the Council of State Support to Non-Governmental Organizations understands the NGO philosophy unlike the relevant ministries and institutions, secondly, the main purpose of the establishment and concept of this Council is the development of NGOs; ensure that they turn out to be the partners of the government as well as the implementation of state policy on the formation of civil society.
In this case, issuing the powers (including all procedures relating to grants) of the relevant executive authority specified in the Law to the Council of State Support to Non-Governmental Organizations is more reasonable. Only in this case, civil society may suffer less from the additions and amendments made to the Law of the Republic of Azerbaijan “On Grants” at the National Assembly of the Republic of Azerbaijan on 17 October 2014. In fact, it is the general idea of the NGOs. NGOs unambiguously insisted on this issue in the hearings on the public discussion of the draft law held in the Council of State Support to Non-Governmental Organizations under the President of the Republic of Azerbaijan on October 16.
Therefore, we consider that issuing the powers to the Council of State Support to Non-Governmental Organizations may both increase the interest of foreign donors (their branch and representative offices) in acquiring donor status in the Republic of Azerbaijan with the existing requirements of the Law and provide the continuing of the mission of donor in exchange of these requirements.
At the same time, the power of the acquisition of the reference of the relevant executive authority on its compliance to the financial and economic reasonability should be focused on a single center and given to the Council of State Support to Non-Governmental Organizations. Because the Council of State Support to Non-Governmental Organizations both analyzes the projects implemented by the NGOs and investigates more necessary areas as a donor and announces grant competitions on these areas, allocates funds to the projects of NGOs. Apart from these, the Council of State Support to Non-Governmental Organizations is capable of directing foreign donors, international organizations to the most important areas by exchanging views and practices with them about the development of civil society. Other ministries will have difficulties in demonstrating this approach and will not be interested in these processes because of implementing rather administrative activity.
RECOMMENDATIONS
- It will be more effective, if the Council of State Support to Non-Governmental Organizations under the President of the Republic of Azerbaijan is assigned as the relevant executive authority (exercising the powers of authority issuing the right to give a grant in the territory of the Republic of Azerbaijan, executive authority issuing the reference of relevant executive authority on its compliance to the financial and economic reasonability, the relevant executive authority approving the procedure of the acquisition of the right to give a grant, relevant executive authority approving the procedure of the registration of grant contracts (decisions)) specified in the Law of the Republic of Azerbaijan “On Grants” at the National Assembly of the Republic of Azerbaijan on 17 October 2014;
- Azerbaijan will not be left aside from this process, if simplified mechanisms are determined for the citizens of Azerbaijan, scientists and organizations to benefit from 80 billion euro existing with the initiative of “Horizon 2020” Scientific Innovations of European Union;
- Donors are required to open representative office in Azerbaijan and to acquire license. There are such donors that they don’t want to open a representative office, but also they are not interested in long-windedly correspondence with state agencies. The opening of representative offices by the donors giving small grants does not seem real. Meanwhile, these donors have no priority for directly working with Azerbaijan. We think that it will be more appropriate for donors who give small grants and have no priority for working with Azerbaijan, if simplified mechanisms are applied.