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27 January, 2012  ▪  Yulia Mykhailiuk,  Alina Pastukhova

Hurdles for NGOs

Ukraine’s public organizations are hampered by outdated legislation and red tape

In Ukraine, 17% of the population belong to various associations, but a mere 2% are really active – but their activity produces results. For example, campaigns and hearings initiated by citizen associations made it possible to save Starokyivska Hora from builders. Moreover, in the place of a foundation pit which the builders had already dug in the Peizazhna Aleia landscape park, a public garden was made thanks to the efforts and money of the Kyiv Landscape Initiative. It has already become a favorite recreation destination for both children and adults.

Unfortunately, stories of this kind do not always have a happy ending. For example, the residents of the Berezhniaky district in Kyiv decided to join forces in 2000 to defend the public garden and the shores of Lake Telbin from builders, but they got tangled up in red tape: the Justice Ministry rejected their application to set up an NGO because its statute defined its goal to be the representation and defense of the interests of community members. The effective legislation limits the functions of NGOs to the defense of ideas of their members. The disgruntled citizens were forced to take the issue to court but lost there as well. They appealed to the European Court of Human Rights which upheld their case on April 3, 2008. Even though they failed to save the shores of Lake Telbin from construction (three huge houses were built there), the case known as Koretsky et al. vs. Ukraine provided an impetus to revise outdated legislation on NGOs.


It is much more complicated in Ukraine to set up an NGO than a business venture. Tetiana Yatskiv, deputy head of the Civic Advocacy Center, says that NGO registration is overregulated by current laws which fail to reflect modern realities. Different governments have submitted bills “On Non-Government Organizations” to parliament but they have been withdrawn each time a new prime minister has taken office.

One of the key problems is the complicated and time-consuming registration procedure: 7-23 documents (depending on the status) are required for the NGO, while a mere four are needed to register a business company. Considering the headaches associated with the process, many law firms do not even take on such cases. The services of the few that do are rather expensive. The joke in the legal circles is “Will trade: one NGO for two limited liability companies and one privately owned company.” According to the Justice Minister, nearly 60% of those who want to set up an NGO fail to complete the registration procedure. This greatly impedes the progress of civil society and self-organization.

Red tape prevents NGOs from performing one of their key functions – defending the interests of the community. They promote ideas of and provide services only to their members, and the activities of human rights, environmental, and social organizations for the good of social groups is illegal.

Another problem is the unjustified limitations due to territorial status. Other legal entities can freely operate across all of Ukraine, but NGOs may only do so only within the territory defined in their statutes. Thus, an NGO registered in Lviv cannot legally organize an event in, say, Ternopil.

Unlike all European and some CIS countries, in Ukraine only its citizens have the right to create NGOs. Foreign nationals, persons without citizenship and legal persons do not have this right, which greatly limits opportunities for real civilized dialogue between business and authorities.


Countries with conducive conditions have many times more NGOs than in Ukraine. For example, in Estonia, an NGO can be registered via a web portal and paid for electronically. Estonia has 201 NGOs per 10,000 people, while Ukraine has just 17.

Polandand many other countries have a simplified form of NGOs – associations. It takes three people to found an association. A newly-created association reports to a local authority, and if it does not receive a denial within 30 days, it is assumed that it is allowed to operate. In Ireland, most citizens choose the form of non-corporate associations that operate on the basis of a written or oral agreement about joint activities, sometimes have statutes and do not require registration. In France, both physical and legal persons (at least two) can found an NGO. In order to register an organization as a legal entity, one has to submit only the statute and an application. No fee is charged. In Hungary, courts register NGOs but apply a simplified procedure and grant permits within a day.

In Germany, which is considered a country with the most effective system of social security, 60% of the services paid from the budget are provided through NGOs. The government invites bids from government institutions, privately owned companies and NGOs. The latter win owing to higher quality of services and lower cost.

The Ukrainian government also offers financial incentives for NGOs. For example, NGOs received UAH 185 million in grants, but unlike Germany, the procedure was not transparent and no bids were invited.

Curiously, punitive measures for operating NGOs without legal registration have been preserved only in post-Soviet countries, such as Russia, Belarus, Tajikistan and Turkmenistan. In particular, under Uzbek laws, the guilty party may be fined by an amount equal to 50-100 times the average wage.


In late April, bill No. 7262-1 on NGOs was placed on the agenda of the Verkhovna Rada. It is sponsored by a group of MPs representing the BYuT, NU-NS and the Party of Regions and is seemingly geared toward improving conditions for NGOs. NGO representatives were also involved in drawing it up and are now lobbying for it in parliament. The Council of Europe has been insisting for several years now that a law of this kind should be passed. However, its passage does not necessarily mean an easier life for NGOs .

Not only the opposition is interested in having this law. Chief of the Presidential Administration Serhiy Lovochkin is said to be pushing for it in order to demonstrate the “democratic character” and “quality work” of the government, which can utilize this law to boost its image in the West, while at the same time making it a meaningless paper in reality.

Bill No. 7262-1 contains a number of novelties. First, the registration system will be made easier for NGOs and will take up to three working days regardless of the NGO’s status. Ukrainian citizens, foreign nationals and persons without citizenship can be NGO founders under this bill. Both physical and legal persons, excepting government bodies and government-funded agencies, will have the right to found these organizations and hold membership in them.

Second, NGOs will be permitted to act not only in the interests of its members but also to defend other people who will turn to them for help.

Third, the division of NGOs into local, national and international will be dropped. This will permit them to define the territory covered by their activities and freely operate across the country.

The bill also offers a new conception for legalizing NGOs to help avoid the time-consuming and burdensome procedure of double registration. The Justice Ministry will accredit branches of foreign NGOs registered in compliance with the laws of other countries, will confirm their status as all-Ukrainian NGOs and will keep a unified register.

However, the forms of responsibility have been radicalized. Warnings, fines, suspension of certain types of activities and overall suspension envisaged in current legislation will not be applied. Instead, infringements will lead to closure or forced disbandment.

As it shows its readiness to liberalize conditions for NGOs, the Party of Regions seems to have found a way to “minimize the negative consequences” of the new law. The  Party of Regions claims it is elaborating a document to control the way NGOs are financed. They promise to regulate the procedure for receiving grants. They are even considering the Russian option of banning foreign grants for NGOs. Public members view this initiative only as a way to cut the financing for the organizations whose activities may damage the government's image. After the Orange Revolution, the flow of funds on projects to build and defend democracy nearly dried out but can be resumed now. Evidently, the government is acting preemptively to keep this kind of financial assistance from reaching Ukrainian NGOs.

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