(European Centre for Not-for-profit Law) In December 2018, the Dutch Ministry for Legal Protection published a draft Act on Transparency of Civil Society Organizations (CSOs) and opened it for consultations. The draft Act requires all CSOs to publish overviews of donations that amount to or exceed 15,000 EUR a year, which are to include the names and places of residence of the respective donors. The failure to do so may result in criminal liability under the Economic Offences Act, potentially leading to fines, community service or detention. These proposed reporting and disclosure requirements raise serious concerns with respect to the right to freedom of association, and the donors’ rights to privacy, including the protection of personal data.
As part of its mandate to help promote enabling environments for CSOs in their respective countries ECNL reviewed the draft Act for its compliance with international standards, including those set out in the ICCPR and ECHR, and in EU Law. It also considered EU Directive 88/361 concerning free movement of capital and recommendations of the Financial Action Task Force, as the draft Act invokes the fight against money laundering and terrorism financing as one of its aims. The analysis was developed in close cooperation with Dutch law experts and CSOs, including the Human Security Collective, as well as with the Donors and Foundations Network in Europe (DAFNE)/the European Foundation Centre (EFC) and Data Protection Support and Management (DPSM).
The main concern with respect to the draft Act is its wide scope, as it affects all CSOs, and many donors, including private individuals, whose names and places of residence would be published as soon as the donations that they make over the course of a year reach the annual threshold of 15,000 EUR. If the draft Act is passed as is, this could lead to a significant decrease of individual donations for CSOs and will affect CSOs’ ability to do their work. There is little public information as to why this is necessary, and how such sweeping obligations would enhance the fight against serious crimes such as money laundering, terrorism financing or the incitement to hatred or prevent ‘undesirable behaviour’ of CSOs – another aim of the draft Act cited in the Explanatory Memorandum. While the draft Act anticipates that some organisations may be exempt from the reporting and disclosure obligations, it does not clarify under which criteria or process. Also, introducing measures that would affect so many CSOs and individuals supporting them, would appear to be a disproportionate approach. Instead, identifying concrete risks in the sector and introducing proportionate and targeted measures to address those risks may be a more adequate and effective approach.
Below, please find some key issues that ECNL raises in its analysis of the draft Act:
1. The draft Act would, if passed, violate the right to freedom of association of CSOs, as it would greatly reduce their ability to receive and disburse funding, and conduct their work.
2. The draft Act would violate the right to private life and data protection of individual persons donating to CSOs, whose names and places of residence would be part of overviews that would remain public for seven years as soon as their yearly contributions reach a threshold of 15,000 EUR.
3. The new reporting and specifically the disclosure obligations set out in the draft Act would not be compliant with EU law provisions on the free movement of capital.
4. The fact that the draft Act contains many unclear provisions, notably as to when a CSO would be exempt from the reporting and disclosure obligations, or when threats or the safety of an individual donor may allow CSOs to not publish his/her name and place of residence is problematic from an international law point of view. Those applying the law will not be able to tell what kind of consequences it will have for them and may render financial planning and the implementation of activities more difficult.
5. The proposal of the draft Act to declare violations of its provisions as economic offences, and thereby criminalizing the failure to submit or publish information may be disproportionate.
We have submitted our detailed comments to the Ministry of Legal Protection as part of the public consultations:
- ECNL Submission on the Dutch Draft Act on Transparency of CSOs Feb 2019
- Note of Data Protection Support and Management on privacy and data protection issues arising from Dutch government proposals on non-profit funding disclosure
- The draft Act on Transparency of Civil Society Organisations (in Dutch)
- The Explanatory Memorandum on the draft Act on Transparency of Civil Society Organisations(in Dutch)
- DAFNE/EFC comments on draft Dutch act on transparency of civil society organisations of the Netherlands
- Submission of Justice & Peace Nederland, Mensen met een Missie, Nederlands Helsinki Comité, Human Security Collective, Wo = Men Dutch Gender Platform (in Dutch)
We will upload further information, as it comes through in relation to this draft Act.
European Center for Not-for-Profit Law (ECNL) | The Donors and Foundations Network in Europe (DAFNE)/The European Foundation Centre (EFC) | The Human Security Collective | Data Protection Support and Management (DPSM)